Outsourcing News

Yesterday I received a discouraging note from an entrepreneur with a patent and a medical software application who couldn’t find a dime of investment, and was grousing that seed funding just wasn’t available anymore. After exchanging a couple of notes, I concluded that she was more likely a victim of item #1 on my reject list, rather than a drought on seed funding. Too many people still believe the urban myth that you can sketch your idea on a napkin, and people will throw money at you. Fundraising is indeed brutally tough at all stages, and the seed funding is the hardest to find. The simple answer is that if you need funding, do your homework early and completely. I seem to see common threads in the stories from people who don’t get money, so I checked my list against ones from Brian Emerson, president of Starlight Investments , as quoted in a new book by Barry H. Cohen and Michael Rybarski, titled “ Start-Up Smarts .” We agree on issues we see sabotaging most funding efforts, in decreasing priority sequence: Lack of a compelling story. That story has to begin with a painful problem shared by a large collection of viable customers, with your competitive solution

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Top Eight Reasons Startups Don’t Get Money

I have a friend who runs a nationwide “traditional” business, and business is down, like it has been for most people. I suggested that he add some social network marketing initiatives, and his answer was he is “too busy.” According to this study from last year, over 65% of existing small businesses still ignore social media for marketing, so he is still the rule rather than the exception. What’s the problem? It seems to me that there is abundant proof in the marketplace of the financial returns to both large and small businesses, the low cost of entry, and the ubiquity of social networks.

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Don’t Be Too Busy for Social Media Marketing

Most entrepreneurs tend to avoid this area of the business, and as a result are badly surprised by cost realities, and investor expectations. They seem to think that financial projections are simply invented numbers for investors, and not useful. Nothing could be further from the truth. What is a business financial model, really? In most cases, it is merely a Microsoft Excel spread sheet loaded with your cost and revenue projections for your startup, starting now in time and extending at five years into the future. For more value, a few variables can be added, like product volume growth rate, and number of salesmen, for “what if” analyses. Why ? For you to make decisions and manage the business – because we are all mere mortals and can’t possibly keep all these numbers and calculations in our head – to decide whether and when the business is going to be profitable given rational projections of costs and income (these assumptions are referred to as your business model). Secondarily, it will be required by potential investors to validate how much money you need to get started, and how much return they can expect on their investment

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A Financial Model Investment Has a High Return

This insidious disease kills more good startups than any other, especially high-tech ones, and yet most founders (who may be the cause) never even see it happening. “Feature creep” (or scope creep) refers to the penchant to add just one more feature to the product before first delivery. The instigators are all well-intentioned – executives talk to potential customers who “must have” a few more things; or the technical team edicts some “technically elegant” options that they can’t resist adding before release. The result is a bloated first product which finally collapses under its own weight, or is too late and too expensive for the intended customer. The best product is one that is highly focused, and has the absolute minimum number of features to do the job. The solution is to do the right job up front on requirements, document and approve specifications, and have the toughest person you know do the project management. Here are some basic rules to live by: Document the requirements

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Feature Creep Turns Leading Edge Into Bleeding

For as long as I can remember, computer users have been complaining about the array of names and passwords required to get work done – a different unique user identification name and password are required to start the computer, email, social networks, banking, read online news, connect to the office, or check your phone bill.

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Single Sign-on Startup Opportunity Has Passed

I always advise software startups to file patents to protect their “secret sauce” from competitors, and to increase their valuation. The good news is that a patent can scare off, or at least delay competitors, and as a “rule of thumb” every patent can add up to $1M to your startup valuation for investors, or for M&A exits (merger and acquisition). Yet the software patent process is a mess. I say this with conviction even after I survived the process, and have a software patent pending. Here is a list of commonly recognized software patent flaws, as summarized from my research and Paul Graham’s essay on the subject “ Are Software Patents Evil?” Process is onerous, expensive, and time consuming. Count on spending $10K to $20K per patent just for a USA application today, unless you do most of the work

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The Good, Bad, and Ugly of Software Patents

One of the toughest and yet most important questions you will be asked by savvy potential investors is “What is your sustainable competitive advantage?” Yet many entrepreneurs, maybe in their passion for their new product, gloss over this one, or even announce that they have no competition. Think about each of the three words for the full meaning of the phrase. “Sustainable” means over the longer term – not just today. “First to market”, for example, is not sustainable

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Six Tips to a Sustainable Competitive Advantage

Paul Newman wasn’t the last person to suffer from a “failure to communicate” ( Cool Hand Luke, 1967 ). I see it happen almost every day with startups trying to sell investors and business leaders, mostly of another generation, on the value of a new product or service. Presenting an idea as an employee to an executive, or presenting your startup as a founder to an investor, requires that you effectively communicate, or “translate”, the value proposition into terms that the receiver can fully understand and appreciate.

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“Failure to Communicate” Lesson For Entrepreneurs

One of the most common complaints I hear from entrepreneurs is that they are overwhelmed by the workload and stress of starting their company. Then there are the additional challenges of balancing the demands of family and friends. Having too much on your plate can turn your dream into a nightmare. Some people will tell you to just get a bigger plate, meaning hire some help. But with the pressures of the economy, and limited access to outside funding, we all know this isn’t always possible or appropriate. I recommend the opposite, or getting things off your plate that shouldn’t be there in the first place. In reality, many entrepreneurs are their own worst enemy, trying to do everything, working inefficiently, and imagining things that need doing which will never happen. Here are some tips on how to look at work, make some hard decisions, and keep your health and sanity: Maintain a big picture perspective

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Ten Tips To Survive Your Startup Workload

Investors are people too. They evaluate you like you should assess a possible co-founder or first employee. What are your credentials? What have you done that would convince me that my money is safe in your hands? Only after they’re sold on you, do they want to see your plan and hear your idea, not the other way around.

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Investors Fund People First, Plan Second, Idea Last

A week ago I talked about how and where to find a co-founder in “ How to Select an Ideal Startup Co-Founder ”. The feedback was good, but some readers asked me to be a bit more specific on attributes that might indicate an ideal business partner. Even if you are looking in all the right places, it helps to know what you are looking for. In this article, I’m broadening the definition of partner from co-founder to “business partner.” The reason is that good attributes apply equally well to “external” partners, as they do to internal partners, like a co-founder or CTO. In all cases, the challenge is the same, of finding people that you can work with and enjoy in the business relationship. The relationship has to have trust, communication, and respect in order to work.

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Ten Attributes of Your Ideal Business Partner

When you are not presenting to investors or your team, try to spend more time listening than talking. You can’t learn anything new while you’re talking, but many entrepreneurs seem to never stop. It’s a sad spiral, since the more you talk, the less people really hear, meaning they don’t learn anything either. If someone left this article on your desk, read extra carefully. Building a business is all about building relationships, and one of the most important elements of a relationship is effective communication. Communication doesn’t happen unless both parties practice the art of effective listening. Check to see if you are practicing the key disciplines of listening, as outlined by Brian Tracy in “ No Excuses: the Power of Self-Discipline ”: Listen attentively. Listen as though the other person is about to reveal a great secret or the winning lottery number and you will hear it only once.

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Good Entrepreneurs Spend More Time Listening

Every investor expects to see some traction, both before and after a funding event. If you have been working 20 hours a day, and spent your last dollar, but have no results to show, investors will be sympathetic, but will probably tell you that your dream vehicle doesn’t have wheels. Traction means forward progress. I hear a lot of entrepreneurs contemplating their great “idea” for several years with little discernable progress, and looking for money to start. Talk and time are cheap, but they need to understand that investors judge past results as a good indicator of future expectations. Here are some tips which will signal traction to investors, as well as your team: Document your business plan. It’s hard to build a business without a plan, just like it’s hard to build a house without a blueprint. If you have a product description, that’s necessary, but not sufficient. If you have neither, and choose to approach an investor, you will get no attention, and probably never again get a shot at funding with that investor. Forcing yourself to write down a plan is actually the only way to make sure you actually have a plan.

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Ten Tips for Business Traction to Attract Investors

One of the hot new approaches I have seen around the country for assisting startups looking for funding has been “crowd-sourcing” tools ( ProFounder ) or “crowd-pitching” events ( Funding Universe ). These are variations on a “crowd-funding” theme to raise money for a startup through social networks and voting at public events

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Crowd-Funding is a Bad Approach for Startups

A couple of years ago, I saw first hand what can happen to a founder, and the business, when the founder practiced unhealthy habits, such as working 20 hours a day. A typical “Type A” personality, with boundless energy and enthusiasm, she aggravated some previous health limitations until she was bedridden, and the business floundered. Many entrepreneurs are too focused on their dream to take notice of health warning signs, which leads them to ignore business health signs as well. If you can’t remember the last time you had a relaxing evening with the spouse, or read a book, then your health may be in jeopardy. If your business won’t run for a day without you, then the business isn’t healthy either. There is no single formula for how to stay healthy while starting and running an exciting but demanding new business, but here are a few suggestions, depending on your lifestyle: Stay fit and rested. You will have more energy and think more effectively if you are in shape and rested. In addition, you’re a role model for partners and employees.

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How to Keep You and Your Business Healthy

As a member of the local angel group Selection Committee, I’ve seen a lot of startup presentations to investors, and I’ve never seen one that was too short – maybe short on content, but not short on pages! A perfect round number is ten slides, with the right content, that can be covered in ten minutes. I’ve published these points before, but based on interest, it’s time for an update. Remember the goal is an overview presentation that will pique investor interest enough to ask for the business plan and a follow-on meeting, not close the deal on the spot. Every startup needs both a business plan and an investor presentation, completed before you formally approach any investors. Most advisors will tell you to write the business plan first (20-30 pages), then distill the key points into a set of Microsoft PowerPoint slides for standup presentations to potential investors. An alternative approach, which I prefer, is to build the investor presentation first, by iterating on the bullets with your team, and then fleshing out the points into a full-blown text-based business plan document. Here are the ten slides you need: Problem and market need. Give the “elevator pitch” for your startup.

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Ten Slides Make a Killer Investor Presentation

There are some main ecommerce advertising and selling avenues that you just can use to market your small business. By shopping at these methods and deciding what’s greatest for everyone, you may just determine what are very good profit margin organizations and what does not efforts do well. All through this piece, we’re going to employ the illustration of advertising and promoting a wholesale merchandise enterprise. Pay out per click is a person of the most primary ecommerce advertising and retailing tactics you can use. As the merchant, you purely pay out the host a fee each time someone clicks on your link ad goes to your web-site. One of the excellent things about this is that it is viable to pick out which keywords you will be targeting. For instance, you may likely decide to target ‘wholesale merchandise’ which means that your advert would only show up when an individual is looking for this term. It indicates that you just know your consumers are interested in getting wholesale merchandise so these are previously qualified website visitors ahead of they reach your site. One other factor of selling is Search Engine Optimization

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Great Tactics For Ecommerce Marketing

A book published in 2006 came up with the idea of the search engine being thought of as a “web dragon”. Depending on your national traditions, dragons can be seen as good creatures or as monsters to be controlled. The same concept can be applied to search engines. A large number of people always use a search engine as the beginning of any web activity. This is probably through Google in the UK, where it is the dominant supplier, despite the publicity efforts of Microsoft to promote Bing. This gives the search engine great power

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Search Engines: Merely Useful Tools Or Beasts To Be Feared

Successful entrepreneurs are usually hard-driving, and highly focused on some specific goals, like being the dominant player in a given domain, or the low-priced provider of their product. Yet other entrepreneurs will talk for hours about all their ideas, and how they intend to change the world, but I don’t hear enough specific goals or milestones. Many people are very hesitant to set specific goals, due to lack of self-confidence or whatever. The result is that they don’t ever get anywhere, because they never really knew where they wanted to go

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Business Success Requires Specific Goals

But when you obtain the ball rolling on your site, you’ll need to figure out how you can get your website designed and have it look professional. Should you are going to look into local options such as web design businesses inside your region, then the budget might just be as well higher. Outsourcing can be the answer to this issue. You are able to look forward to getting a great finished product without paying a lot when you choose to outsource your site’s design. Lots of the time you’ll end up getting support that’s just as good or better than local businesses can provide you. Even if your organization is little, you’ll be faced with whether or not to outsource at some time or other.

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Ways To Gain From Outsourcing Web Design