Archive for April, 2011

SMB Group Interviews KikScore – Why Small Businesses Need Help Demonstrating Trust Online

I met the fantastic Laurie McCabe at the Small Business Summit in New York last month.  Laurie and her partner Sanjeev Aggarwal run the very influential market research company, the SMB Group, that focuses on studying the small and middle market business.  Laurie alone has over 20 years of experience in studying this market and conducting in-depth studies and competitive analysis.  The SMB Group is only growing in influence as a research group that knows the ins and outs of the Small Business space. In fact, Laurie and Sanjeev just last month authored the 2011 Impact of Social Business on Small and Medium Companies. Earlier this year they published the 2011 Top 10 SMB Technology Market Predictions and have a number of other studies coming out soon.

Just one of the many great items that came out of the Small Business Summit was that Laurie wanted to sit down with Mike and I to learn more about KikScore and how KikScore helps small businesses take information about their reputation and track record of reliability and trustworthiness and display that to shoppers and leads so the small business can sell more.

We want to say thanks to Laurie and Sanjeev for sitting down with us on this podcast.  Please check the KikScore interview (and the other great podcasts too) here.

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Archive for April, 2011

We’re So Money…Or I Mean, We So Need to Figure Out the Money Issue

Our little enterprise at KikScore is growing.  We have a long list of customers and are in process of integrating with several different channels.  That’s the good news for our business.  The bad news is that we’re just starting to charge for the service and we constantly throwing in our own cash to feed the growth.  Like it or not, we need to make a decision about funding.  And it’s looking like our choices are pretty familiar to other growing startups: Friends and Family vs. Angels vs. Venture Capital vs. Self Funding.  After talking to several capital sources and other startups, here’s my analysis of these choices:

Friends and Family:  First thing, you don’t actually be related or friendly with this investor group.  It’s a group of people you know that have money.  You may get money from this group, but it may not enough to fully fund the venture and the investors may not be completely clear on the risks of a startup investment.

Angels:  This group is certainly aware of risks of their investment and have ready access to capital.  But they are generally less willing to fully fund a venture (compared to Venture Capital), but are still in your business.  So you now have a boss, but not the free-flowing cash to stock up your office with cool gear and get a SuperBowl ad.

Venture Capital:  You get the money and the contacts.  But everyone is going after investment from the top VC outfits…and they are generally looking for a business that has a strong balance sheet, several partners and a lot of buzz.  In other words, a business that doesn’t need the money.

Self Funding:  You’re  the boss, you control your business completely.  And you’re constantly kicking in money. 

After contemplating the options, we’re sticking with option #4…unless you want to just gift us some money with no strings attached.

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Archive for April, 2011

Top Ten Reasons Small Businesses Fail, part one: Procrastination

Procrastination

You’re only as good as your word. Missing deadlines, arriving late for meetings, forgetting to follow up or follow through – these are all symptoms of procrastination, and key factors of Small Business failure.

As a Small Business owner, operator or employee, you cannot afford to slide down procrastination’s slippery slope. Since word of mouth is the most effective low cost marketing strategy (and a rich source of revenue and referrals), you must be perceived as someone who:

1. Keeps their word
2. Honors their commitments
3. Values their customers’ and clients’ time

You may be familiar with the expression “if you fail to plan, you plan to fail“. Here is its procrastination-related corrolary: “If you fail to show, you show to fail“. Free yourself of the voice in your head, which is telling you some variation of the following: “I work for myself, therefore:

1. Noone is the boss of me
2. I set my own schedule
3. My time is my own
4. Why must they nag me – I’ll get it done (eventually)”

The phrase “it’s only time” is a complete falsehood: time, to a great extent, is all there is. As an independent entrepreneur, or as an employee, you either bill for time directly, or the time required to perform your task (or make your goods) is a major factor in your compensation. Time is, in many ways, your most valuable asset.

Timeliness is also an aspect of quality, which is a perception in the client’s or customer’s (or employer’s) mind, NOT an objective quality of the work performed or goods created. As a computer service professional, a hard-won lesson is that the job isn’t done until the client perceives it as done. I could have fixed it weeks ago, but if I wait for weeks to tell the client, only at that moment is it done as far as they’re concerned.

And let’s face it — the person paying for the job, not the one performing it, is the one who must be satisfied. Don’t take too long to understand that, if you want to stay in business…

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Archive for April, 2011

Facebook and Twitter: Parallels and What Can SmallBiz Learn From Them?

According to Cnet, Twitter is disorganized. Now I’m not entirely sure the article is true, but I figured that I could trust Cnet and since they included a link to a Fortune article it looks like it checks out. So, what’s going on with Twitter? Some claim they don’t, exactly, know what they’re doing. There’s a lot of speculation going on, such as some higher-ups spying. Cnet seems to speculate that Twitter is trying to emulate  The Social Network. That’s probably not the case. So, what’s really going on with Twitter?

So, Twitter has trouble amongst the higher ups. That’s not surprising. Many startups seem to have that happen especially during a meteoric rise. Remember Facebook? There was some serious chaos going on at Facebook a couple of years ago and Facebook was about the same age as Twitter is now.

However, the difference between Facebook and Twitter is that some argue that Twitter lacks a powerful visionary heading the company. Facebook has Zuckerberg, who, practically, built Facebook according to his vision.  Observers claim that Twitter does not have that. Facebook has apparently learned from it’s mistakes and has become a stronger company. Twitter is trying to get there, but some may be fearing that it doesn’t look like anyone wants to take charge.  In some ways, Twitter’s investors seem to have more influence over what the company does.

Twitter’s problem seems to be that there are too many men (they’re all male) in positions of power and from the outside at least not a single one of them has been willing to take charge. There are other issues that Twitter has to deal with too, such as the need to sustain growth, prove themselves as a sustainable revenue generating company etc. However, these issues are common for nearly every young company.

Is Twitter a service that is being kept afloat by a trend?  From the outside some say it looks pretty unstable and this management issue could distract it further. Like any company, Twitter needs practical and strong leadership. However, whoever takes that position will have to deal with another problem: balancing Twitter’s malleability, where it’s users decide what they want to do with it and what Twitter’s users want out of Twitter.  That will ultimately prove whether Twitter can succeed.

So, what can a small business learn from all of this?

First, that it’s important to have a clear plan and vision of where your company is going.

Second, make sure that there is someone who is clearly in charge and providing leadership as we discussed in a previous post about 10 leadership traits in a startup or small business.

Third, know that problems will happen. Almost nothing goes smoothly when running a business. Factor that in when making plans.

Lastly, in tough times work to pull teams together to focus on the future rather than start finger pointing about what happened in the past.  Here is a prior post we did on building the right team at a startup that discusses the importance of having a good team at your business.

What do you think about all of this?

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Archive for April, 2011

The Bad Job Correlation: How Bad Companies Encourage New Business

College is a time for learning and really bad jobs.  Some of us work at Subway, while others (me) had to participate in a parade of horrible jobs.  I worked for my father and he had a wide range of business endeavors – commercial real estate, mini-storage and estate auctions.  He also had partners that had really side businesses.  One installed cable antennas in rural North Dakota; the other built homes.

Unlike working at the pool or some awesome restaurant, I was my father’s indentured servant.  My days consisted of looking for some type of wrench or nail (I’m not very mechanical) or sitting on a steep pitched roof in Valley City, ND, with a 40 foot piece of metal, waiting to hear if the TV. inside showed any signs of life.

One extremely hot day, on some metallic roof (applying some type of glue or something), I said to myself “I cannot be an outside working guy.  I have to get an office job.”  So, I took out an outrageous amount of student debt, and got an office gig.

But all is not as it seems in corporate America.  In talking with friends and former classmates, I think 90% of people I meet don’t like their day job.  Whether it’s a manager or corporate culture (e.g. type of place where everything has to be in a CYA email), people are scratching their head for an idea.  One that gets them out of their office and into their own business.

A friend of mine recently quit his job as a general counsel for a Fortune 500 company.  His main complaint was the lack of control over his career and not a lot of exciting moments during the day.  So, what is he trying to do now? Work with some young Tech company?  Nope.  He’s scouting locations for a self-serve yogurt shop.

Another guy I know roams the sterile hallways of his corporate job, thinking of any concept that could get funding…anything from mineral rights to a new way to run match-making sites.  All of this is because he has a boss that he can’t stand.

So, in a way, America owes a lot to terrible work environments.  Otherwise, there’d be much less entrepreneurial spirit.

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Archive for April, 2011

The Magic Behind the Thin Mints: What We Can Learn from the Business of Girl Scout Cookies

It’s a familiar scene: a group of elementary-aged little girls set up a card table in front of the local Giant with every intention of guilting you into buying a box (or three) of Tagalongs or Samoas.  Okay, we might as well admit to ourselves that we wanted those cookies anyways.  But what is it about those Girl Scout cookies that keep us coming back for more?  What may seem like a couple of innocent girls selling door to door is actually a hugely successful $700 million cookie empire.

Here are some simple tips for applying the strategies behind Girl Scout cookies to your own businesses:

1. Make your brand recognizable and familiar. There are hundreds of thousands of independent Girl Scout troops across the nation.  Yet, customers know exactly what to expect when they open a box of Girl Scout cookies.  The packaging, the pricing, and ultimately, the quality of all Girl Scout cookies are uniform across the nation.
2. Keep up with the times. The organization has recently unveiled the Girl Scout cookie app for the iPhone.  An organization that is so historic gets bonus points for embracing a society where customers automatically assume that “There’s an app for that.”  The Cookie Finder app makes it easy to locate places where customers can purchase Girl Scout cookies.  Which brings me to my next point….
3. It’s all about the convenience. Even though concerns for the safety of young children have slowly eradicated a door-to-door selling culture, people don’t typically have to look too hard for another box of thin mints.  Girl Scout cookies still tend to find you, whether it’s at a local grocery store, or through an order form at a Girl Scout parent’s office.
4. …Except for when it’s not convenient at all. Girl Scout cookies are not available in stores.  Nor are they available all year round.  The only place to buy them is directly from a Girl Scout (or her parent, when he or she inevitably brings that form into the office).  When customers know that they can’t just stop by the store for another box, they will inevitably start stocking up for the year.
5. Appeal to the goodwill and emotions of the public. The Girl Scouts of America is an organization that is widely recognized for its part in empowering girls across the country.  The mission statement cites goals to build girls of “courage, confidence, and character, who make the world a better place.”  People are more likely to support a business that they believe is doing good deeds.  Of course, there’s also the fact that sometimes it’s just hard to refuse that little girl.  And that might just be the Girl Scouts’ greatest advantage.

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Archive for April, 2011

WANTED: Your Confidential & Sensitive Data

Guess what? Your credit card number is less valuable to attackers today. Too bad they still want it, along with you Facebook credentials. We know this how? Recently Symantec released another security report. The security report said that the price of stolen credit cards dropped dramatically from previous years. The drop off is due to numerous factors, but one thing that seems to stand out is the amount of credit cards there are in circulation. Since there are so many credit cards avaliable, these sellers have to lower their prices if they want customers.

However, while credit cards have dropped in value, peoples social network credentials are becoming more valuable. During the past year, botnets were seen sweeping Facebook and other social networking sites for login credentials. Why are peoples social network credentials in demand? If attackers gain social network credentials, they can then use those platforms to launch malware attacks and spam campaigns. These attacks are often more successful. Why? Since many people divulge a lot of personal information on sites like these, an attacker can comb through a user’s profile and imitate them well enough to fool people into clicking on links that have malware embedded in them.

Since many of these malicious link are shortened, it is a challenge for social networks to determine which of the shortened links are trustworthy.  Remember that article I wrote on hacking toolkits? Well many of these toolkits are used to initiate these malware attacks, because many of them use Java. Since Java can run on almost any platform and browser, this means that these attacks cannot really be avoided by switching platforms or browsers. All of the toolkits have a high infection rate, which means that the infections can spread very fast and to a wide number of users if the toolkits are used. Social networks are also targeted because they enable attackers to get access to business information which can then be used to get sensitive data from those businesses attacked.

One platform that has not quite been hit by attacks is the mobile platform. Currently, very many people do not not use their mobile devices for online banking and other sensitive data transactions. Thus there is no real incentive for attackers to seriously target mobile devices. (They still do target them and the number of attacks is increasing, but there have not really been any widespread attacks.) However, as mobile devices become more sophisticated and as more users start using them for online banking and other sensitive data transactions, attackers will quickly start targeting mobile devices in rapid numbers.

What do you think of this?

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Archive for April, 2011

Put the web to WORK

In a down economy, Small Businesses need to exploit every possible advantage available to them.

An often overlook and underutilized Small Business asset is the good ol’ company website. Websites are nothing new, and nearly everyone has one by now (there are by far more registered websites than human beings on the planet). Most Small Businesses easily have multiple ways to launch a website for free. How many of these websites are effective business assets?

To truly assist Your Small Business, a website must, at a minimum, do three things:

1. Burnish your brand
2. Generate leads
3. Increase revenue

Burnish your brand: in today’s economy, a website has to be more than a digital business card. Business cards are cheaper than dirt, and you hand them out like toothpicks. Not much ROI there. Your website is your first, best chance to:

1. Introduce yourself
2. Promote your business
3. Establish your qualifications
4. Create your online identity
5. Build a reputation

The old saying “you don’t get a second chance to make a first impression” is especially true of websites: the “Back” button is just a click away, and you have about five seconds to convince the site visitor not to… click away.

Generate leads: Does your website have a form for customers to contact Your Small Business? Don’t assume the site visitor will actually take the time to pick up the phone, or open their email tool and compose a message. Visiting a website is like an impulse purchase – if you site does capture their attention, you must make it as easy as possible for the potential customer or client to move to the next step, and contact you right NOW!

Increase revenue: Many of your existing clients may not have discovered you by an Internet search, but that doesn’t mean you can afford to ignore the power of the web to find new business with old customers. It’s a well know fact that it costs more in time and money to acquire a client than to retain one — what are we doing about it?

Does your website cross-promote goods or services, especially to those currently doing business with you? Do you offer special deals or discounts to favored customers? You could have special content for registered visitors to your website, and create login accounts for your existing clientele – again, don’t assume that they will take it upon themselves to sign up on their own. They are just as busy as you are, so you’ve got to make it almost effortless for them to do more business with you.

This is not the same as spamming them with unwanted messages – they already do business with you. Everyone likes to feel special, and be treated with special regard. Make sure your focus is the added value to their lives and businesses, not your desire for more of their money.

Review your records and invoices — what goods or services have they already purchased in the past? What else do they want, or need, and how can you let them know that you can provide these quickly, conveniently and affordably?

Remember that a “down” economy is always an opportunity to invent new possibilities – use Your Small Business website to create as many new opportunities as possible, and you’ll find undiscovered wealth right inside your web browser.

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Archive for April, 2011

Guest Post: Web Design Contracts – Protect Yourself & Your New Business

Well, how did you celebrate National Start a Business Month? Did you finally drag yourself off the couch and put those long mulled-over dreams of running your own business into motion?  Good for you! And like all businesses today, you are planning to stake a claim to your own piece of cyberspace with your business’s website, right? Of course you are. In fact, you’ve finally found the right web designer, who has offered you a great price on setting up your website, and you simply can’t wait to get started.

Hold the phone, Jack. To protect you, your brand new business venture and even your website designer, get your website design agreement in writing. Make sure it clearly states what the responsibilities are for both parties and what happens should problems arise. But you’ve never had a website before, so how are you supposed to know should be included? Here is a brief summary of ten points your agreement should cover:

1. Description of Work

This is the most important aspect of the entire project. – exactly what is the website developer going to do for you? Think about a 5-sentence summary of the scope of service, including such things as number of pages, programs, or scripts to be built, graphics to be created, content to be written. How will the website be updated? Who will host the website when the project is done?

2. How Much Will it Cost and When are Payments Due?

State the exact price payment and terms of the payment if split up into installments. Is the project quoted at a fixed rate, or is it an hourly rate, and how is this tracked? Will there be a down payment and a monthly billing cycle, or will it be a milestone-related payment system? And how will payment be made – electronically, by check – and what happens if payments are late?

3. Length of Contract and Ending the Contract

How long will this contract be enforceable and what happens if either party wants out? What are the penalties and notice that must be given before they can exit the contract? For an unfinished project, who gets to keep the work that has been done?

4. Who Owns the Website?

Who gets to keep the intellectual property to the project? Typically, in this work-for-hire situation, the client retains all intellectual property, such as the source code, all digital files, documentation, images, multimedia, programs, website design, and the like.

5. Keeping Secrets

You may want to treat all information that you provide to the developer as highly confidential that cannot be disclosed. If so, make sure the agreement is specific as to what information can and cannot be publicly disclosed. Many website developers use their portfolio of clients as sales tools for other clients – will you allow the developer to mention that they are working for the client during the course of the project to other prospects or potential clients? Specify how the developer will be credited on your site.

6. Providing a Warranty and Possible Disclaimers

Having a warranty on the developed website is standard in most website projects. Typically, website developers give a 30-90 day warranty on all work to be functional and bug free. However, if you have access to the site during development and screw something up, that may void the warranty.

7. Limit the Liability

This states that the website developer is not responsible for damages or money losses that occur outside of the consequences of his direct actions in developing the website.

8. Relation of Parties

Make sure that you and the developer understand what your relationship is. Is the relationship a development partnership? Is it strictly a work-for-hire type relationship? Is it a client and vendor relationship? If not a partnership, make sure that you specify that the developer is an independent contractor and no employment relationship is created.

9. Website Maintenance and Changes

Most developers want to post a site and be done with it, but most businesses want to have a continuing relationship with you. Include in the contract how long the developer will be available to assist with learning to maintain the new site and what types of things he will fix. Specify whether the developer will maintain the domain, set up e-mail, maintain the site, etc.

10. How to Handle Disputes

Make sure the contract defines how disputes will be handled, whether by litigation or arbitration. Arbitration avoids court costs and many legal fees and the parties can agree what law will apply, where the arbitration will take place and who will pay for it (generally the loser).

These ten points should lead to a successful web design and development contract and will give a peace of mind to both the client and website developer and will pave the way to a trusting business relationship. It’s a good idea to get your contract looked over by a lawyer to make sure you haven’t forgotten anything.

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Gregg Hand is the principal attorney at Hand Law Offices LLC, focusing on helping companies solve their business problems with suppliers, vendors, customers or competitors, offering counseling, advice, contract drafting and review, or litigation expertise. He also authors Briefs in a Bunch, a blog on legal advice for small companies.

Want to know more? Be sure to check out “The ‘Absolute Truth’ About Web Site Projects,” an informative seminar on May 14, 2011, led by Mayra Ruiz-McPherson, Principal & Founder of Ruiz McPherson Communications (@mayraruiz), and Gregg Hand, Esq., of Hand Law Offices LLC (@GreggHand). For information and registration, click here.

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Archive for April, 2011

Asked About Your Business? Better Get a Good “Story”

What’s your company’s story?  As we’ve been talking to partners, investors and media people, that seems to be a favorite question.  At first, the question comes across as a bit offensive.  I mean if I’m at a party and someone I’m introduced to starts off the conversation with “what’s your story”, I’d start thinking of how to get leave the room without making a scene.  What’s my story, bud, what the hell is your story?!

But my defensive/aggressive nature aside, “what’s your story” is an invitation for you to describe your company and management team in the best possible light.  I mean, yes, it’s a bit demeaning in the sense that you’d like to think your company’s story is unique and shouldn’t be bucketed into a group of other relatable concepts.  But it’s also empowering and a chance to frame the debate.  Let me give you an example:

Here’s the KikScore unvarnished history: 5 nights and weekends entrepreneurs – mostly from the Midwest — with a product that helps promote a business’ reputation and trustworthiness.

Here’s what I say when I’m asked what KikScore’s “Story”:  KikScore is FaceBook meets Twitter meets Foursquare.  It was founded by 5 former British Royals and a reclusive vampire with extensive .Net coding experience. 

See how much better the second version of our “story” is?  Sometimes, when I’m asked the question, I start telling the story of my favorite Friends episode.  If they don’t like the joke, at least I get to remember Friends. 

So, dear readers, what’s your business’ story?  Make it good.

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