So posts have been few and far between since I became unemployed. Part of this is lack of  inspiration; part of it is the necessity to pour resources into my next opportunity. There is a necessity in this blogging experience for me though; to share knowledge and enjoy what I’m passionate about business.

Did some thinking and tried to figure out how best to proceed doing what I love, and working it in with what I need to do. I came up with the idea that distracts a bit from the dullness of job-hunting, and it will be the focus of some new content that I’m going to be posting.

The idea: Layout business plans for markets I think would be interesting if I had seed money to do them. It’s fun, light hearted, and who knows could scare up some investors. So I hope you enjoy. Consider these posts a back of the napkin type of planning session, it wasn’t exhaustive, nor is it likely to be grammatically correct.

1^st Business Plan

The Market:

High unemployment rates, companies needing to stand out in the masses, and long term job searches for those hit hardest by economic downturn.

The Problem:

Employers – In the 90’s you’d have to throw a Jag at someone to land the best talent, now all you have to do is look through 10,000 resumes good luck with that.

Job seekers – It used to be you apply to a few opportunities and you’d have an interview. Now you’re having a hard time just getting through the pile of resumes and algorithms to even attract a hiring manager’s eye. Additionally, staring at never ending black and white way too long dissertations on the ideal job candidate avoiding the monotony and not dozing off has become the real challenge.

Proposed product solution:

Create a more exciting interaction point for candidate and employer. Focusing on humor, engaging open communication in a manageable amount of information sharing between prospect and prospector. Catch the buzz, become the type of company young people find cutting edge and willing to jump into. Similar to a Personal Ad providing key job requirements in a way that engages and is quick and to the point.

Primary Target Audiences:

Small businesses – typically harder to stand out in the crowd not able to attract the attention in the same way as market leaders and established players.

Young unemployed people – Huge market of the unemployed, like to do things a little different, often mistrusting of corporations.

Revenue streams:

Click based advertising – relevant ads, adsense etc.

Companies paying to post jobs – small businesses pay for serving jobs on the site.

Writing posts for companies – Helping companies adjust posts to fit with the audience they’re targeting “consulting”

Strengths: Completely unique way of looking at the hiring process, targeting segments that are not well served by competitors, cost, better job seeker experience.

Weaknesses: Going against the grain and traditional thinking. Have to be serious while still being hip and fun. Starting from zero. Many competitors who have better funding. No established relationship with companies who need service.

Opportunity: Small and innovative approach. Low start-up cost. Looking at a niche that is untapped currently. Is the type of product that plays well on Web 2.0 type of audience could make marketing and customer loyalty easier.

Threat: Key players like LinkedIn are quick to add to their service when an upstart comes along. Funding. Not being taken seriously. Backlash from core audience (they can be fickle).

The other day in the comments there was an inquiry into why I’d stopped posting sections of the Creating Value eBook. My core audience of the site is divided between entrepreneurs and business professionals, and the eBook leans very heavily onto the entrepreneur side.

I had decided it would be best to stop  inserting the sections and just get the Creating Value eBook out instead. My goal was to have a more polished product with better formatting some pictures, and flare. Unfortunately, that’s been delayed.

Given the ask though the straight forward solution was just to post the raw eBook here so that the knowledge could at least be shared.

Goal: My hope was with this eBook I could create an easy straight forward set of questions a entrepreneur could ask to begin to understand what their product is and how they should go about selling it. This might be a bit rudimentary for those with extensive Product Management experience but  I think there can still be some value there.

Enjoy

MGMTNow Value Prop eBook

Introduction

I would like to take this time to introduce myself. My name is Gustav and I will also be contributing to the content on the website. You can read more about my accomplishments in the about section of the website. I have been in the background performing much of the marketing for the website.

This article will be one of several in a series devoted to Entry Level Blog Marketing. Much it will be advice of how to market your own blog through my own experiences.

There are two strategies that I undertook as part of an effort to market our blog as a useful resource for branding, marketing, and product management: Google Adwords and Web 2.0 social networking websites.

My Experience

I taught myself Google Adwords while I was a GM at a small single-owner operated pizzeria. I was extremely successfully in marketing our product in an incredibly competitive market (there were over two dozen pizzerias in just a 4 mile radius). In just over 3 months, with a budget of just $150/month, I was able to obtain a return on investment of 9:1. I was able to convince the owner that internet marketing is not only inexpensive but also extremely profitable.

Strategy A: Google Adwords

I applied the same strategy to our blog except the budget was significantly less ($50/month) and our blog was competing for ad space on a continent basis (North America was the geographic range) instead of a local basis with the pizzeria. While I was concerned, I decided to move forward because regardless of the outcome it would provide useful knowledge as our blog moves forward and garners attention.

The first setback occurred when many of the keywords that were relevant to our content were highly competitive and expensive. Words such as ‘branding,’ ‘marketing,’ ‘product management,’ ‘product branding,’ etc. had CPC(Cost-per-click) well over $1.00. Such a high CPC was unfeasible with our budget and made little sense when we have no current revenue stream. It wasn’t worth spending over $1.00 when it is highly unlikely each click will result in a conversion (conversion in our case was defined as an active reader of articles)

The second setback occurred when the keywords that were affordable (around $0.10 to $0.20 CPC) didn’t generate enough impressions to expose us to a large enough audience. With around 20 to 30 keywords per Ad Group we were only generating around 300 impressions in 2 weeks. That comes out to just over 20 impressions per day. When you don’t generate enough impressions, your CTR (Click-through-rate) won’t go up and as a result your quality score for those cheaper keywords will start going down resulting in a higher bid price in order to stay on the front page of results. This led me to believe that Google Adwords is not a good place to start for demand gen on a blog.

Strategy B: Web 2.0 Social Networking

Next, I decided to try the Web 2.0 market or social networking blogs that were frequently used around the world. The social networking blogs on my list included Digg, Reddit, Delicious, Mixx, Slashdot, Stumbleupon, Facebook, Twitter, LinkedIn, and Sphinn. While all of these social networking blogs differ in the content offering, feature set, and business model, they all have one thing in common: users of any of these social networking sites have an opportunity to submit their own content and have it viewed or rated by other users. This sounded like a great opportunity to get some exposure at no cost.

After about 2 weeks of posting to the above aforementioned websites, we had over a 500% increase in traffic to our blog. This was impressive. With just about 15 minutes of work posting to each of the social networking blogs per day and an additional 15 minutes or so participating in other content and articles, we were obtaining some serious ROI.

It should be noted, however, that social networking sites should not be exclusively used for your own personal gain. The whole purpose of them is to develop an active community of members that post content from a wide variety of sources. If you choose to market your blog through these sites, then make sure you return the chance at free advertising by actively contributing to other articles and posting links to other domains. Many of them also implement auto spambots that detect and flag users who use their service exclusively for personal gain so it would be wise to follow my advice. Also make sure the quality of your content is high. People won’t vote up what you submit or visit your blog if they believe there isn’t content there worth looking at. We at MGMT Now strongly believe the business content and analysis we provide will help others make insightful business decisions.

Conclusion

When deciding between Google Adwords and social networking websites for initial blog marketing the answer is simple: Go the no cost way of Web 2.0 social networking. However, once you have a revenue stream and can increase your monthly budget on Adwords to a competitive level, Adwords will prove to be very helpful. Adsense is a great way to generate advertising revenue, but I will leave that to another part of this series.

Being my first attempt at marketing a blog, it is very exciting to see the strategies that work and the strategies that don’t work from my own personal experiences. I take the time to write these articles because I want my readers to benefit much in the same way I have. I believe that everyone with an entrepreneurial spirit has a right to learn how to make a successful presence on the internet.

Imagine for a second you’re an entrepreneur starting a small deli shop in downtown Manhattan. Your identity as a business is based upon using the freshest ingredients picked up daily from local butchers, and farmers markets.

Now imagine you’re a website dedicated to providing users with search results and serving up advertising alongside results. Your mantra is results, results, nothing but search results; ads are required by nature to be non-invasive.

Now the problem these two businesses face are run-away success. How do you scale out these models? How do you keep growing earnings while sticking to the same principles that the company was founded on.

These two companies are in the process of figuring out that the dream has changed for them, and now they need to find a way to grow their brand & offering to account for the new reality.

 

Ubiquitous Coffee

 

The Starbucks Example

When Starbucks started out it was nothing more than a whole bean coffee experience. Their focus was around finding the best beans in the world from all different locations transporting them to Seattle and roasting them to perfection.

A funny thing happened though, a man named Howard Schultz who worked for a maker of espresso machines (if I recall correctly), saw that this little coffee store operation was selling more of his product than Macys a large department store. He bought a ticket out to Seattle to figure out why, and fell in love with Starbucks and the rest is history.

If you really enjoyed this synopsis I strongly encourage you to read Pour Your Heart Into it by Howard Schultz, it is probably the most interesting and thought provoking business book I’ve read. Hands down it’s a must for anyone interested in product management, starting their own business, or is focused on brand identity.

The Starbucks shifts

Prepared drinks: The first shift Howard Schultz wanted to introduce was the latte and other prepared drinks to the US market. This idea came from Howard’s experience in Italy seeing cafés that remained packed throughout all hours of the day, coffee he found was more than a drink it was an experience in life.

Syrups: Another shift was the introduction of flavored syrups, likely installed to disrupt competitors who used this as a differentiator. At first glance it doesn’t appear to mix with Starbucks mission to brew and sell the best coffee bean but we’ll look into that later.

Cold coffee: This shift was just a necessity of driving business during different seasons, and in different regions. When investors are demanding returns for their hard earned money you simply cannot ignore these sorts of opportunities.

Bottled products: Starbucks partnered with Pepsi to create the Frappuccino this created a product to rival soft drinks and take advantage of a different sales channel than Starbucks typically managed.

Packaged Coffee available at Supermarkets: Not everyone had a Starbucks close to them once, not everyone wanted to mail order. Once Starbucks had discovered a technology to keep the coffee fresher longer this was an obvious move.

Franchising: In order to scale further Starbucks franchised into grocery stores, Target, and many other businesses. The key to this expansion was giving franchisees the same level of training as Starbucks employees.

Private label: When Starbucks acquired Seattle’s Best Coffee they utilized is as a sort of private label with which they could attack markets that would otherwise dilute their brand, this led to being able to serve SBC lattes out of McDonalds.

White Label: Similar to private label but the intent here is to use someone else’s premium brand like “Jumping Joe’s Espresso” to sell Starbucks beans without anyone ever knowing the origin of the beans.

Starbucks take-aways:

I’m blown away, and exhausted after rattling off that list and I likely even missed a few different shifts that happened. Throughout all that change they were able to keep their core brand intact and expand upon its meaning by asking themselves the same question every time one of these opportunities came up:

“Does the proposed expansion dilute our core ability to deliver on our promise to bring the very best coffee bean experience to the customer?”

It seems like such a simple question to ask but with proponents on both sides of the issue it is quite complex. When at an impasse Howard Schultz often relied upon were his customers to make the decision for him. He would use a few stores to test a suggestion such as: frozen drinks, or syrups. Usually, the customers would come back with an unequivocal answer, sales would rise dramatically proving the validity of the idea and he’d act on it.

It’s important to keep your identity as a business, but being closed off to bringing in new ideas that are not counter to your mission statement and branding will cripple your ability to grow the business.

Dealing with Venture Capitalists

When going into a deal with Venture Capitalists you need to understand regardless of how great they think your idea is, they will talk it into the ground in order to secure a better price for their investment. Jonathan the proveyer of Element Bars was prettty good about reiterating his value position. However, he missed a lot of opportunities by focusing back on the fundamentals, the sales results, the growth rate, the potential to expand the offering with seed money.

What is the value of Element Bars?

Lets look at their business and the various intellectual properties which they may own.

Business model: Deliver high quality customizable energy bars that meet your nutritional needs and taste.

Slogan: We’ve raised the bar! <—– really thought this was a terrible slogan.

Messaging: Our made-to-order energy bars are chockfull of tasty, whole ingredients and nothing you can’t pronounce. Guarranteed to put fuel in your tank and keep you smiling. <—- Think they bit off a bit more than they needed to and missed having a concise easy to get behind message.

Recipes: Curious whether they even own the recipes for these bars as they’re crowd-sourced. What happens if they wanted to expand into retailers, if they select a user created bar does the user or the company maintain the rights to the recipe?

The Website: Great URL name, very professional, well put together portal. Not much room to move beyond the current product though, no ability to scale out into complementary goods unless you use Element Bars branding in them.

The Process: Having built a process to deliver thousands of customizable orders on demand is a useful skill. That know-how or “trade secret” could be very valuable to bigger players who are looking to move down into customizable product niches.

The ordering Process: This to me is probably the most amazing piece of intellectual property I saw in the product. The idea that i could customize across 5 variables, and then have the nutritional information and bar power key change is very cool. I could see this technology being applicable for anything from recipe sites, to corporate restaurants detailing their menu.

We’ve talked Value now lets talk Challenges

Scaling ~ The most concerning thing about this business for me (and one which the sharks seemed to neglect) is how are you going to scale the product line given the reliance on customization. Its great you build 1 bar specific to 1 person but if you have 10,000 people waiting on their unique bars can you deliver? This really is the difference between small restaurants and fast food chains, there’s  a certain adjustment that the product ofering must undergo to scale out to large audiences.

Is the product offering too narrow? ~ Next we’re talking about a niche product, or rather 3 niches coming together to create an even smaller niche.

Pretty narrow niche to fill

 Competition ~ If you walk into a grocery store you’ll already see a glut of these bars, most of which claim many of the same benefits of Element Bars. How does Jonathan plan to compete with the Power Bars, Cliff Bars, and Luna Bars of the world? How is he going to fight them when he’s not even on the shelves next to them in stores, where the majority of people still do their shopping?

Marketing and growing customer base ~ I’m very concerned about this one, your product is online meaning there isn’t a ton of product placement opportunities for you. You’re relying on people who are dissatisfied with the offerings they see on a daily basis to seek out this product. I see this as a major blocker to expansion.

Suggestions

Hit the Gym ~ If I was Jonathan I would focus on a primary audience to act as my distribution channel: Sports Clubs, Gyms, and nutritionists. His problem is scaling with a customizable product, these businesses are centered around creating health plans for their members. They could order his product customized but paired down to just a few options and keep them onhand as a recommendation to go into their excercise and diet plans.

Force feed them ~ This is probably going to be about as well recieved as Howard Schultz telling Starbucks they should move into preperation of coffee drinks instead of sticking with just whole bean sales (and we saw how well that worked out). I love you customized story, but you need an offering into stores to get the visibility. You could even use it as a trojan horse to drive people to the website for the customized product.

White label ~ Go after companies that want to use your product as a complement to their offering. His process already supports this but make it a priority.

Take Away: Ok this was an incredibly long post. I was pretty dissapointed on both sides of the negotiating table. In the end Jonathan did make a deal (it was unclear whether he got to keep the 4% royalty or whether it went off the table when he negotiated to 30% stake). In the end its a reality TV show so anything you see, you have to be sceptical of. For me I’d probably have invested on the condition I be granted the IP for the customization on the website for use outside of the energy bar marketplace.

Most people don’t understand intellectual Property or how to value it, use this to your advantage.

So last week I posted the first part of the eBook which centered around the inception or “idea phase”. This week we move on to the next phase in the process:

The Rationale

We now should now know what the problem we’re trying to solve is. This brings us to the next question that must be asked about the new product offer.

Why should anyone care?

This step is all around validation, its trying to find the true value in the offer.

Sticking with our Okonomiyaki example here were a couple values I saw:

• Okonomiyaki is a wonderful dish that is quite popular in Japan.
• There is demand in America from food-goers around tasting exotic foods.
• The glut of Teriyaki and low end Chinese restaurants doesn’t represent the best foods available from Asia.

So I’m in the process of finalizing a eBook and the concepts contained therein were a focal point of a discussion with a friend who is looking to start his own business. I felt now would be a good time to make some of the content available on the website.

Inception “The Idea”

So here’s the thing I hear this all the time “I want to find an audience and then solve their problem”

Wouldn’t it be great if we started not with a business concept but with a core audience? While that would be a terrific way to make some easy cash that’s not how things usually start. There are segments that are extremely attractive (single males, the elderly, teenage girls etc.) but finding a business that neatly covers these peoples’ needs is extremely elusive.

So where do we begin? It all starts with one question:

What problem are you trying to solve?

By focusing on a problem you take a blind approach not bringing any preconceptions on what the audience’s needs are, and instead focus on a problem you’ve identified which could exist.

Example: I want to bring the savory delight that is called okonomiyaki to the fast food nation that is the United states.

The phrase money doesn’t grow on trees comes to mind. It’s important to understand no matter how easy it seems some people come across amazing results you’re not likely to achieve runaway success right out of the gate. Its hard work to go from a concept to a finished product and this stage will be the most trying and present the biggest challenges you will see in releasing a new product.

How do you navigate the murky waters of being a start-up? How do you launch a new product that has no market to build off of?

The key is accountability. You need to have clearly defined goals, metrics, and an action plan.

Goals

• Do you have a revenue target, or an Income expectation?
• Do you have a market share expectation?
• Is the product just geared towards gaining exposure?

Metrics

• What is success on your goal? What is the top line metric to track to?
• Are there any other metrics that feed into the success metric that also need to be tracked
• When will you achieve the goal?

Action Plan

• How are you marketing the product?
• Who are you targeting?
• What is your messaging?
• What start-up capital do you need?

These are all straight forward easy questions; you would be surprised how often entrepreneurs and Product Managers miss these questions though.

Takeaway: The time before you’re making money is the most difficult period in business; only through preparation does one equip themselves for success.