You are currently browsing the monthly archive for October 2009.
I spend a lot of time here on Merge talking about how to enter the market with your start-up business idea, but what about the other end of the process—the exit strategy? Believe it or not, this is something you should be thinking about as part of your business planning process. In fact, planning your exit can be a big influence on your entire strategy.
When Lisa and I were building HealthSimple, the notion that the experience could culminate in an acquisition was the farthest thing from our minds—and it shouldn’t have been. Even if that was not our primary objective in building the business, we should have been more prepared than we were for this possibility. Had we taken some simple steps early in the process, we would have been in a much better position when the topic of acquisition became a reality.
Of course there are many options—acquisition being one—for how you can envision the “other end” of the business journey. Liquidation, IPO, and simply selling to a friendly buyer are other options.
The key to remember is that these things usually don’t happen by accident. I found this useful overview of exit strategy options on Entrepreneur.com by business consultant and blogger Stever Robbins . Robbins provides digestible pro-and-con lists for each of his strategies.
Succession planning is another aspect of the business building process that often gets overlooked. What happens when the goals of your business no longer match up with your skills as a leader? One of the options you have is to find new leaders who are better suited to carry the torch. Entrepreneur Michelle White faced this dilemma with her dietary supplement business, and her story is told in this BusinessWeek profile.
After leading a number of workshops and presentations on the topic of design and entrepreneurship, I’ve found myself excited and inspired by the energy that happens at these live meetings. So, I’ve been pondering various ways to bring designers and creative professionals together for more face-to-face discussion of this vital topic—and to do so without making a huge production out of it. I’ve decided to start out with a decidedly lo-fi and grassroots first step.
Merge Meetup: Volume 1 will be a small-group discussion of design and entrepreneurship held over the lunch hour in the LynLake neighborhood of Minneapolis; no Powerpoint decks; no agenda; no action items. Just open discussion, idea sharing, and probably more questions than answers.
The conversation will revolve around the themes of the blog: business planning, funding, networking, and education, with healthy doses of social media and service design.
There’s no fee (other than picking up your own lunch at Common Roots), but space is limited, so you do need to RSVP on the Meetup page here:
Merge Meetup: Volume 1
Wednesday, November 4
Noon-1:30PM
Common Roots Cafe
2558 S Lyndale Ave
Minneapolis, MN 55405
In the future, if the Meetup format proves to be valuable, I hope to schedule these gatherings in other cities as I travel on business.
As societal values continue to evolve, social entrepreneurship has become an increasingly growing business category. Defined as entrepreneurial ventures that have a goal of social change rather than strictly financial gain, I see social entrepreneurship as a close cousin of the emerging area of service design, which I’ve discussed at length on Merge (Continuing the Service Design Conversation, September 4, 2009). It’s easy to spot fundamental design principles in empathic concepts like solar powered trash compactors and needle-free injection devices.
But regardless of whether the primary goal of these businesses is financial gain or not, they still require money—and sometimes in significant amounts—in order to fulfill their vision. So, where does a social entrepreneur go for funding? Well, as the business category grows, and the success stories accumulate, the funding community is beginning to pay attention. Last spring, BusinessWeek.com ran a series of articles on social entrepreneurship which included this overview of angels, venture capitalists and foundations that specialize in this area. Included on the list are: Acumen Fund, Commons Capital, Investors’ Circle, and others.
Additionally, BW.com has an ongoing series of profiles of 28 of America’s Most Promising Social Entrepreneurs featured in this slideshow. More recently, the site ran an update on one of the stories from the original 28: D.Light Design which pledges to commercialize and sell solar-powered LED lamps to those living on less than $5 a day in Africa and Southwest Asia, a safer, cheaper option than the more common kerosene. D.Light Design recently secured $6 million in venture funding.
While the main stage presentations at AIGA Minnesota’s Design Camp last weekend didn’t really focus on the topic of change in the design world, much of the side chatter I was hearing involved the changing ways that designers are working—or being forced to work. With a student-to-professional ratio of roughly 1:1 at the conference (rare for a design event with a professional focus), there were plenty of attendees who were looking at their own future with shaky knees, wondering where the opportunity will be in this profession that seemed so wide open less than a couple years ago.
Of course, the design jobs will return (perhaps a bit slower than some would prefer), but what exactly will the job description be when they do? Designers—and especially communication designers—have found ourselves tagged on to the end of the business process despite our best efforts to infiltrate our clients at a deeper level. The fact remains that the vast majority of what we do still involves putting a pretty package around a product, service, system, or experience that was fundamentally complete before we designers arrived on the scene.
So, I was pleased this morning as I bagged up school lunches for my two teenagers (talk about a design project…) to hear the topic of design coming from the radio speakers. Tim Brown, CEO of global design firm IDEO and author of the new book Change By Design: Tim Brown’s Book on How Design Thinking Inspires Innovation, was being interviewed by NPR’s Renee Montagne. I was doubly pleased that the focus of the conversation was around the potential for design to impact our dysfunctional healthcare system, a topic about which I am passionate.
I’ve embedded this short interview below along with a recent TED video in which Tim Brown expands on his ideas for design and design thinking to make change.
“I think the design of participatory systems in which many more forms of value beyond simply cash are both created and measured is going to be the major theme not only for design but also for our economy as we go forward.”
This is a profound statement that, if true, will dramatically change the expectations placed upon those students I encountered at Design Camp as they invent the next generation of our profession. Tim Brown’s prophecy is daunting for those of us in the middle of our careers, but as always, with change comes opportunity. Personally, I’m in complete agreement with Brown on this issue and I welcome his loud, strong voice to the chorus of change.
NPR Morning Edition Interview with Tim Brown
Tim Brown TED Talk
I had the pleasure of presenting a series of workshops on design and entrepreneurship last weekend at AIGA Minnesota’s Design Camp. Held on the shores of Gull Lake in central Minnesota, Design Camp is a hidden gem among design conferences featuring internationally known speakers and a wide range of breakout content. Special thanks to AIGA MN for the invitation and the hospitality.
I always begin my workshop sessions by asking attendees what their reasons are for not pursuing a great business idea, and inevitably the top three are: money, time, and know-how. Essentially what I’m hearing is that the process is simply too daunting and complicated. So, I was intrigued and excited when Laura Shore, Senior VP of Communications and Innovation Strategy at Mohawk Fine Paper sent me an email announcing the launch of a new Mohawk project called the Felt & Wire Shop. Felt & Wire is a curated online marketplace showcasing products designed mostly by communication designers.
Moonbeam Clock by Pie Bird Press
The products on Felt & Wire all have a paper connection of some sort (not surprisingly), but the range is impressive. Stationery and gift cards, invitations, wrapping paper, posters, prints, and calendars by some of the top names in communication design: AdamsMorioka, Chen Design, and Grant Design Collaborative among many others. Some of my favorite pieces are from Pie Bird Press in Albany, CA, which features bold, graphic imagery with a blend of pop art sass and retro silkscreen charm.
Importantly, the submission and review process is streamlined and user-friendly. A simple online upload of jpegs and/or video and some background info and designers are one big step closer to bringing their ideas to market.
While curated online marketplaces for gift items are not a new phenomenon (Etsy, which launched in 2005, is one of the most prominent), Felt & Wire is unique in its clear focus on communication designers. I see a strong correlation between the Felt & Wire Shop and the machine that Apple has developed for the iPhone app development process. In both cases, the part of business development that intimidates most designers becomes so simple that it’s almost a non-issue. This highlights a big need—and opportunity—in the area of designer-driven entrepreneurship: I would love to see more venues like Felt & Wire that would allow designers working in other media to have this same speedy route to market. Along this line, I hope Mohawk will recognize how wide open this space is right now and expand the vision for Felt & Wire (nudge, nudge, Laura).
For those of you heading to Memphis this weekend for the AIGA Make/Think conference, check out the Felt & Wire booth. In the meantime, here is an excerpt from an email exchange Laura Shore and I had discussing the launch of Felt & Wire.
How did the idea for the Felt & Wire Shop come about?
Two years ago, I visited the New York Stationery Show for the first time and was blown away by the smaller, more creative booths. First of all, the work was fantastic. Second, as we spoke with exhibitors it was clear that many were using our paper for their products. How could we find a way to capture that energy and recommunicate it back out to the world? How could we help promote these micro-enterprises through our network of connections? As the idea percolated down, I started thinking of all the cool things I’ve received over the years from designers we’ve worked with. Every graphic designer I know is a closet product designer. They just don’t have a means of distributing their products. The retail market for someone in manufacturing and communications design seems byzantine. Quantities are tiny. I’ve never figured out how anyone could make money at it!
About that time I got an e-mail from Josh Chen, a great designer in San Francisco, who was selling product on a marketplace site. I discovered Etsy and started thinking about ways to connect the dots.
Were there models out there that you were emulating?
There are a number of marketplace sites out there that we took hints from.
How are products chosen to be in the shop?
The site is curated by a panel who manage the balance of content and also ensure that all the work meets our high standards. You sign up on the site and submit your candidates. It’s very straightforward and intuitive. We want this to be a place where the press comes to see what’s best in paper-based design. And where the best designers will feel comfortable showing their work.
What about the type of products you’ll accept—is it just paper-driven?
We’ll consider anything that’s paper driven—or services that support paper-driven design. I’m still looking for lampshades, wallpaper!
Are there any sales trends you’ve been able to spot so far?
Still way too soon to tell but if my credit card is any indication, I think it will do very well.
What are the long term goals for the site?
Every day we have new ideas. We’re working on ways to support AIGA chapters and other non-profit design-driven organizations. We’d also like to find ways to connect designers to digital printers so that they don’t have to inventory everything they sell. I would like see posters and prints from my design heroes (and heroines). And if designers are true to form, I will be continually amazed by what product ideas come forward as candidates.
It seems like Mohawk may be positioning itself as a leader in designer-driven entrepreneurship, am I right?
We want to be a leader in a number of areas. I agree with you, there’s a huge void here!
Seth Godin, author of Tribes and Meatball Sundae is a whirlwind. I began to write notes during his keynote presentation at MIMA Summit 09 and quickly realized this was a losing strategy. His presentation was so loaded with ideas and he spoke so fast that I simply didn’t have a chance. Frankly it was a bit difficult to follow the connection between the dots, but the individual ideas were so compelling, it almost didn’t matter (I guess that’s part of why he sells so many books). Here’s a list of some of those ideas.
- There’s more than one way to do stuff
- We are in the midst of an industrial revolution
- We must ask for permission to engage the people who want to learn from us (rather than continually trying to reach the people who don’t)
- Littlemissmatched.com $1 million to $40 million without advertising (Godin blog post about them here)
- Be remarkable >> Tell a story >> They spread the word >> Get permission (then repeat cycle)
- Tribes are what matter now: connecting people and ideas who want to be connected
- Zappos (Godin’s blog post about them here)
- Tell a story >> Connect a tribe around it >> Lead a movement >> Make change
- Tom’s Shoes (Their blog post about Seth Godin here)
- Who are you upsetting?
Who are you connecting?
Who are you leading?
After a weekend at AIGA Minnesota’s Design Camp (which I’ll blog about later this week), I’m now spending Monday at the Minnesota Interactive Media Association’s (MIMA) Summit. The event, in it’s seventh year, is sold out at 1,000 attendees…many of whom I’m sure were lured by keynote speaker and social media rock star Seth Godin. Of course, social media is topic number one. I’ll be live blogging throughout the day.
First keynote speaker: Jackie Huba
Web is democratized, BUT, 1% of visitors to a site actually create content—they become very influential.
41% of people on Facebook between ages 26-44
Fastest growing age group on Facebook: Women 55+
Most trusted form of advertising:
1. Friends
2. Online opinions (anonymous)
3. Websites
4. Editorial content
5. Brand sponsorships
Strong correlation between word of mouth activity and company growth
Measuring customer loyalty ladder:
Ownership (customer feels like they are part of the company)
Evangelism
Referral
Retention
Satisfaction (just measuring “satisfaction” not adequate)
Story: Domino’s “booger” video
Blog readers actually alerted company of video and helped identify where the store was.
CEO posted apology video to YouTube
46% polled before video would by a Dominos pizza
15% after
24% after CEO video
Story: Motrin Moms
Key learning: LISTEN
Story: Bacon Salt
Early activity exclusively through social media
Obscurity to Oprah in 2 years
Key learning: PEOPLE ARE THE MESSAGE
Story: Fiskars
Scrapbooking
Fisk•A•Teers—ambassadors for campaign=virtual salesforce
6,250 members in 50 states
1,000 certified volunteer demonstarators
Stores with Fisk•A•Teer activity have 3x the sales
13 new product ideas per month
85% of Fisk•A•Teers likely to recommend brand
Key learning: PARTICIPATION
Summary:
1. Listen
2. Attract (don’t interrupt)
3. Participate (involve customers)
Breakout Session: Creating a Social Media Workshop
Laura Chavoen, Imagination
No rules in social media
Social media shift causing dramatic disruptions across business world
Most customers don’t know the difference between a blog, a forum, a wiki…and they shouldn’t have to.
Human nature doesn’t change—human behavior DOES
Markets consist of unique human beings, not demographic sectors—don’t overvalue data
Media is no longer just a source of information, but is now also a site of coordination
This all means there is a NEW OPPORTUNITY for marketers
Huffington Post has integrated content with social media—all within their domain
Road Map:
1. Objectives (why)
2. Audience (who)
3. Strategy (how)
LISTEN
4. Tactics (where)
Case Studies:
Pepsi Innovation Day:
Invited social media experts for inside tour of operations and the LISTENED to what they said afterward online
JetBlue
Very active on Twitter to pose questions about customer service
Navy for Moms
Robust community
Graco
Online community turned into place for customers to talk about kids and parenting
Graco had an ear into R&D opportunities
Little Debbie
Sent product to bloggers and saw huge spike in online activity
Nike
1.2 million people upload data to site
30,000 online running groups
Community encourages me to run…buy product
Threadless
T-shirt designs voted on by users
Netflix Prize
$1 million prize for improving recommendation engine
Winning team—many had never met in person
Listening to customers is no longer an option: it’s a must!
Must build into your cycle the time to listen, learn and adjust
The only thing more popular than using social media is questioning it
Coke didn’t have a Facebook group, but they’re customers created one—Coke reached out to organizers and supports it
Reality: They are already talking about you
If you trust someone to work for you, trust them to use social media
Key: give them guidelines
Fear: we’ll lose control of our brand
Reality: you’ll learn what your brand is really about
Starbucks is number one brand on Facebook (3.6 million fans)
“we are gaining ROI from this effort”
Fear: our audience doesn’t use social media
Reality: Then you don’t have an audience (79% of US is online)
Fear: we don’t have time for social media
Reality: Remember how we felt about email?
Start small and let it grow and prove its value
Fear: if we make a mistake it will haunt us forever
Reality: It’s accountability (take responsibility)
It’s never too late to improve
Fear: How do we measure ROI?
Reality: Ramifications of ignoring
Social media has changed measurement:
Now we measure engagement, involvement, interactions, intimacy, influence
Quantifying Success:
Dell reaches $1 million in revenue from Twitter stream
Carnival invites community members to be first to ride on new ship—most successful launch ever
If you learn what’s important to your customers, you’ll learn what’s important to your business
The New York Times had an article Wednesday about a new documentary film called Ten9Eight which is about a group of teens competing in a business plan contest run by the nonprofit group Network for Teaching Entrepreneurship (NFTE). Filmmaker Mary Mazzio followed twenty-nine aspiring entrepreneurs, ages 13 to 19, all of whom have had to overcome huge obstacles, as they vie for the competitions $10,000 grand prize.
The film brings up the always puzzling question of how and when to teach young people about business and entrepreneurship. NFTE has an admirable mission to provide entrepreneurship education programs to young people from low-income communities. The film opens November 13 in select cities and will likely pop up on cable TV in the future. Check out the trailer here:
Elsewhere on the NY Time Small Business site
As I was perusing the Times’ site for the above post, I came across Bruce Buschel’s refreshingly light-hearted essay about writing business plans. Buschel, a restauranteur in Bridgehampton, NY, says “I believe in plans. I do. They focus the mind and sharpen the concept. I just don’t believe in believing in their predictions. Man plans, God clicks to Comedy Central.”
