Sales Trick: Here’s What Not to Say

Customers don’t actually care about what you’re selling. They’re interested only in addressing their own needs.

Sales Mime

Getty

Want to sell more? Stop talking about what you’re selling.

Yes, you read that right: It’s always a huge mistake to talk to prospective customers about what you’re selling. Instead, talk about what the customer is buying.

Bear in mind: These are two very different things.

Here’s a prime example. I recently received this email from a longtime Sales Source reader:

Geoffrey, I am new in the Short Term Insurance industry, and am looking for that catchy one liner (some call it the “elevator pitch”), to capture the attention of my prospects. I find that when I say I am selling insurance, they often “switch off.”

The reader is making the classic mistake of focusing on what’s he’s selling. This is a particularly bad mistake in the insurance industry, because it has a history of a hard sell, which has turned insurance sales into a cultural cliché.

A more effective conversation with a prospect focuses on what the customer is buying. In the case of insurance, the conversation might go something like this:

Prospect: So, then, what do you do for a living?
You: “I’m in the risk-management business.”
Prospect: “How so?”
You: “I help companies and individuals defend themselves against financial disasters.”
Prospect: “You mean insurance?”
You: “That’s part of it. What I actually do is create a customized solution for each situation.”

Note: What you’re selling is insurance, but what the customer is buying is the peace of mind that comes from being protected against risk.

This distinction is actually valuable in every sales situation.

Take automobiles, for instance. You may be selling cars, but the customer is buying some combination of transportation and image enhancement.

The same thing is true in business-to-business sales. You may be selling the components that go into a customer’s final product, but the customer is buying a way to avoid worrying about that part of its supply chain.

Why is this important? Because it determines the entire tone and direction of every interaction that you have with a customer.

If you focus on what you’re selling, you inevitably end up in a discussion of features, functions, and price.

By contrast, if you focus on what the customer is buying, you end up discussing the customer’s needs, what the customer cares about, and the value you can provide by fulfilling those needs.

And that’s a more effective way to sell.

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Socialcam Acquired for $60 Million

Socialcam, the mega-popular video-sharing app, was acquired today by Autodesk for $60 million. Not bad for a company founded last year.

Courtesy Company

Socialcam has a new reason to smile and say “cheese.”

The popular video-sharing app, which has more than 56 million monthly users, has been acquired for $60 million by Autodesk, a 3-D design software company.

Like Instagram, Socialcam allows users to capture video on their phone, add a filter–say black and white, or sienna–and broadcast to their social networks. Also like Instagram, the company has yet to earn revenue.

Michael Seibel, Socialcam’s founder and CEO, says the decision to sell to Autodesk will give his 18-month-old start-up (which has just four employees!) the ability to reach a broader audience.

“Partnering with a bigger company allows us to address the long-term opportunity, and gets us out of minute-by-minute start-up roller coaster,” he told AllThingsD. “A year from now, I want the majority of your friends taking one video per week.” Seibel added Socialcam will operate “mostly” independently from Autodesk, but with the backing of the company as a corporate parent.

While Seibel contemplates the future of Socialcam, the company’s angel investors, which include Tim Draper, Ashton Kutcher, Brian Chesky, Alexis Ohanian, and Justin Kan, will no doubt be celebrating the more short-term reward. After all, the company, which launched in February 2011 as a spinoff from Justin.tv, Justin Kan’s live broadcasting start-up, raised its first round in April of 2012. A full list of Socialcam’s start-studded angel list can be found here.

Kan, who co-founded Socialcam with Seibel, officially left his day-to-day duties at the company in February 2012 to start Exec, an online outsourcing service.

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  • Socialcam was hot from the get-go. Unlike Instagram, which only grew successful after pivoting from a more stodgy concern, Burbn, Socialcam blasted expectations and goals on Day 1. In its first four months, the app had one million downloads, and 32 percent of users that downloaded the app became active users.

    “Over the past 90 days we’ve gone from maybe 15 servers to maybe 150 servers,” says Seibel in an interview with Inc. “It was a ton of work. I’ve never worked this hard in my entire life. But it’s also been ridiculously fun.”

    Given the app’s overwhelming popularity–it is currently the No. 1 Facebook app and in the top 40 iPhone downloads–there had been rumors of a potential acquisition from Google or Zynga. The acquisition by AutoDesk, then, which is a service-based b2b company, signals the firm’s foray into the consumer market.

    “There is no limit to how much people want to show off their work,” Carl Bass, Autodesk’s chief executive, told The New York Times.  “We’re trying to tap into a vein of human creativity.”

    Recently, Seibel was asked in an interview: “What’s the most important action you took that you believe brought success to your business?”

    His answer: “Deciding to start,” he said. “This is the step that prevents 99.9999 percent of business from succeeding.”

    Microsoft Office Is Changing. Here’s What You Need to Know

    Check out this rundown of all the new features you will find in Microsoft’s most ambitious Office upgrade to date.

    Steve Ballmer unveiling Microsoft Office 2013

    courtesy of company

    On Monday in San Francisco, Microsoft CEO Steve Ballmer unveiled the latest edition of Microsoft Office–the most ambitious release in the productivity software’s history, he said.

    Indeed, you might not recognize Word, PowerPoint, and other applications in the Office suite. That’s because they were redesigned to make the most of the Windows 8 operating system, work with mobile devices such as the new Surface tablets Microsoft recently unveiled, and operate in the cloud so you can get access to your files and information regardless of where you are or what machine you’re using.

    Ballmer talked about how the company’s flagship product is now focused first on being a service. While Microsoft will continue to provide Office as software you can install on your computer, the new Office was designed primarily as a service in which the applications and most of your files sit in the cloud.

    While the company won’t admit it, experts say Microsoft’s next-generation version of Office is one of many moves it is making to fend off the inroads Google is making on the business-software market with Google Apps.

    According to The Wall Street Journal, even though Microsoft Office still has more than 90% market share for business-productivity software and more than an 80% share of corporate email, research firm Gartner recently reported that Google is bringing into its fold one-third to half of new corporate users who are paying for Web-based software.

    The competition is great for business users–the new Office looks like an ultramodern and massive improvement over the current version. Several things you’ll notice:

    Touch modernizes Office apps.

    Touch makes using Office apps on your tablet seem markedly more intuitive and simple. Kirk Koenigsbauer, a corporate VP for Microsoft Office, used a tablet to show how swiping, pinching, zooming, and tapping works with applications such as PowerPoint and Word.

    No more paper note taking.

    The topic of “inking” came up several times during Microsoft’s demo. The new Office lets you use a stylus to do things like handwrite emails and convert them to text, or as a laser pointer when presenting.

    PowerPoint on the tablet rocks.

    Koenigsbauer said the tablet’s screen is now a “cockpit,” so when you’re giving a PowerPoint presentation, not only can you use your digital pen to mark up slides on the fly, you can also see upcoming slides and notes, as well as a new clock and timer so you don’t go overtime.

    Drag and drop makes consuming data and collaborating simple.

    Koenigsbauer showed off OneNote and Lync–Windows 8 style applications for Office that are optimized for touch.

    OneNote, a digital note-taking app, organizes information such as text, pictures, notes, Web content, lists, and more. You can use the tablet’s camera to snap a picture of a paper advertisement, for example, then crop part of it and drag and drop it into OneNote.

    Lync is Microsoft’s unified communications platform integrated into Office, and it includes instant messaging, audio, video, Web conferencing, and location information so you can see where your contacts are. In a multiperson video chat using Lync, you can drag and drop someone from your contact list into the live meeting, drop a PowerPoint presentation onto the shared canvas, draw on the presentation with a touchscreen device, and share OneNote notebooks with others in the call, as well as take and display notes.

    Cloud storage is the default.

    Although your documents will still be available offline, the new Office saves documents to SkyDrive by default, so you can get at your content regardless of what computer or device you’re using. And once signed in to Office, your personal settings, most recently used files, templates, and custom dictionary show up on whatever machine you’re using.

    The new Office is social.

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  • Microsoft acquired Yammer last month for $1.2 billion, proving that the software giant is serious about social. While Koenigsbauer talked about how people can use Yammer and SharePoint for business social networking, the “People Card” looks particularly useful. For each of your contacts, this card shows you the person’s location, photos, and contact information, as well as status updates from Facebook and LinkedIn.

    You can create awesome presentations.

    Microsoft’s acquisition of Perceptive Pixel now makes it possible for you to use 82-inch touch- and stylus-enabled displays for meetings and presentations. Koenigsbauer stood in front of a huge screen and used his hand to swipe across tiles of apps that he could access during a presentation. As an example, he tapped on a weather app to pull off an “Al Roker” weatherman-like imitation with the large digital backdrop.

    Choose from three new subscription services.

    Though Microsoft didn’t say how much the new subscription services will be when they’re officially announced in the fall, there will be three editions, and each will include the 2013 editions of Word, Excel, PowerPoint, OneNote, Outlook, Publisher and Access:

    • Office 365 Home Premium for families and consumers, which comes with an additional 20GB of SkyDrive storage and 60 minutes of Skype world minutes per month;
    • Office 365 Small Business Premium for small businesses, which includes business-grade email, shared calendars, website tools, and HD Web conferencing; and
    • Office 365 ProPlus for enterprise customers, which provides advanced business and cloud deployment features.

    Check it out: The customer preview is available at office.com/preview.

    5 Excuses Costing You Time & Money

    Letting go of an employee is one of the hardest things a manager can do. But there’s no use making excuses.

    zoomar via Flickr

    You know it’s time to do something about that employee whose performance is consistently lacking. But, well, dealing with it feels like more trouble than it’s worth.

    If this sounds familiar, I have a challenge for you. Keep track of the time you spend resolving issues, correcting mistakes, and soothing the frazzled nerves of your other employees, all stemming from one underperformer. This exercise will open your eyes to the reality–it’s time to pull out the chopping block.

    But more often than not, small-business owners don’t want to upset the apple cart. They will endure incredible amounts of frustration and hassle instead of retraining or replacing a problem employee. Of course, this simply creates more problems, because poor performance and negative attitude reach to the core of your company. It affects profit, damages reputation, and takes you and your key performers away from critical goals. It also sends a negative message to your stronger employees; superstars resent having to pick up the slack. They may even see you as weak because you haven’t taken steps to change the situation.

    Imagine going through an entire week without having to compensate for someone else’s poor performance. And how would it feel to no longer risk conversations between this unhappy employee and a customer or prospect? Remember, bad attitude extends beyond your four walls; it reflects on your brand.

    Have you been dragging your feet for too long? Alright then, stop making excuses! If any of these common excuses sound familiar, it’s time for a reality check.

    Excuse No. 1
    I don’t have the time to train a replacement.

    Reality check
    This belief usually stems from lack of systems and documentation. With job responsibilities outlined and step-by-step instructions in place, training becomes less time consuming and more foolproof. It also takes your business one step closer to being a turnkey operation, which adds value to your company. Have all employees create documentation as they work so you can put together an operations manual. Training will be 10 times easier, and errors and misunderstandings will decrease.

    Excuse No. 2
    I don’t know how to find the right person.

    Reality check
    Your confidence will rise once you have a solid job description and documentation in place. When you understand exactly what skills and qualities are needed for the job, it makes the search less overwhelming. Word of mouth is a powerful ally. Other entrepreneurs, business groups, church communities, social media groups, friends, and neighbors are all great resources. If these don’t pan out and time is short, you can even hire a consultant to locate and interview candidates for you.

    Excuse No. 3
    She’s been with me since the beginning. I just can’t let her go.

    Reality check
    A start-up operation often includes the next-door neighbor, a friend or family member, and some faces that you simply become accustomed to. The operation grows, and maybe that friend doesn’t, the problem becoming more apparent with each passing year. How can you deal? Simple: You must separate business from your personal feelings. Most often your friend-employee is ready to move on and wants to spare your feelings as well. Open these lines of communications; you may be surprised at what you find.

    Excuse No. 4
    He may cause legal problems if I fire him.

    Reality check 
    If you’re not familiar with state law regarding firing employees, you should be. This is the perfect time to contact your attorney or accountant and learn the facts. When you follow the guidelines, you minimize the risk. Knowledge is more powerful than fear.

    Excuse No. 5
    She might take clients or confidential information with her and create competition.

    Reality check
    There are many opinions out there about the effectiveness of noncompete and nondisclosure agreements, but if intellectual property and client lists are involved, every employee needs to sign these documents. Most individuals don’t want to risk a lawsuit when they leave a company, so they won’t set up direct competition. And if you don’t trust your employees, the very foundation of your business is weak. It’s time for a change.

    18 Facebook Changes You May Have Missed

    The social network and its affiliates have rolled out at least nine changes to Facebook ads–plus a few other shifts–in the past few months.

    Facebook likes change. Some of its changes affect the entire platform, while others affect only personal profiles or brand pages. Still others affect advertising, analytics, or application developers.

    It can be tough to keep up–but if you’re trying to use Facebook as a marketing platform, you need to stay current.

    Let me try to recap some important recent changes.

    Large format: Facebook begins selling large-format “log out” ads. With a price point of $700,000 per day, these ads provide big brands with a major canvas on which they are the only piece of real content. They grab the user’s undivided attention, delivering an ad message more effectively. (February 29)

    Self-service premium ads: Facebook debuts a self-service platform for advertisers to purchase its “new, upgraded premium ads,” as reported by ClickZ. (May 23)

    Sponsored stories: Ad Age Digital reports that Facebook opens up its mobile-only sponsored-story ad placements “to the masses.” That means all advertisers, not just big brands buying premium ad packages. (June 5)

    Real-time ad marketplace: Facebook announces the launch of a real-time, Google AdWords–like ad inventory bid marketplace for advertisers, which would target ads even further based on a user’s browser data. Wrote Mashable, “For example, if a user has searched ‘SUV,’ and goes on Facebook, auto advertisers will be able to serve that person ads on Facebook for SUVs.” (June 13)

    Payvment ad service: Facebook storefront-enablement company Payvment begins offering a Facebook ad-buying service integrating “unique transaction-based data” to allow advertisers to target buyers based on a “taste graph,” according to ClickZ. (June 19)

    Syndication on Zynga: Facebook ads appear syndicated on Zynga.com. See screen grab at right for an example. (June 22)

    Targeting based on apps: The Wall Street Journal reports that Facebook will be launching mobile ad targeting based on the apps people use, which Facebook tracks through its Facebook Connect feature. (July 6)

    Yahoo cross-promotion: Facebook and Yahoo announce an advertising alliance to distribute ads across each other’s digital properties. (July 6)

    Automated “premium” ad buys: Ad Age Digital reports that Facebook has started to automate purchases of its “premium inventory” (the “prime real estate” ads that “appear on the right rail of a user’s news feed, as opposed to a user’s profile page”). These ads can be bought directly through Facebook or some third-party sellers. (July 13)

    One other advertising change happened during this time period, by the way–and this may have been a change Facebook didn’t like quite so much. In mid-May, just days before the Facebook IPO, General Motors announced it was pulling its $10 million Facebook ad campaign. Although some observers initially interpreted this to mean that GM felt Facebook ads didn’t work, a later Ad Age Digital article indicated that it was rooted in GM’s desire to serve larger ads to Facebook users.

    Other Facebook Changes

    Facebook has also recently rolled out several other changes to its platform. Here are a few additional shifts that could affect your business:

    New data and privacy policies: Facebook announces enhanced transparency of its data collection and privacy policies, and “more examples and detailed explanations … like tips, marked with a light bulb.” (May 11)

    Facebook Camera: New mobile app, Facebook Camera, launches. (May 24)

    App Center: Facebook launches App Center, a central place to locate its social apps. (June 7)

    Third-party developer fees: Facebook begins allowing third-party Facebook-app developers to charge one-time payments and subscription fees for their apps. (June 19)

    Page administration levels: Facebook enables different roles and permission levels to Page administrators. There are five levels of administration: Manager, Content Creator, Moderator, Advertiser, and Insights Analyst. (June 20)

    Comment editing: Facebook begins rolling out comment editing. You can now correct fat-fingers and auto-correct mistakes. (June 21)

    Scheduled posts: Business users can now schedule Page posts to appear at a future date/time. (June 23)

    Page-management app: Facebook launches Pages Manager, “an app for the iPhone that helps you keep track of your Page activity, view insights, and respond to your audience from wherever you are.” (June 25)

    New admin tools: Users of Facebook Groups can now view who’s seen each post. Facebook also launched a feature for Page administrators called “Voice Bar”–a top-of-screen reminder that you are about to take action under your business account rather than your personal one (or vice-versa). (July 11)

    Don’t blink! At this rate, there are bound to be more Facebook changes due out soon.

    Your Most Important Investment

    Chances are, you’re failing to invest in the most important asset of all. Do these five things and your business will be better for it.

    Carpenter Working furniture

    Getty

    You make investments every day: in employees, in advertising, in expanded product lines, in websites and social media… You put your time and money where it will hopefully generate a positive return.

    What’s missing from the items above? Investing in you.

    And that’s a shame, because even spending just 30 minutes a day investing in yourself will produce better long-term results than almost any other investment you can make.

    Here are five ways to invest a little time each day in your most valuable asset–you:

    1. Build strong connections.

    Forget Facebook and LinkedIn and Twitter for a moment. Social media connections are useful, but the best connections are truly personal.

    Simple example: Every day I spend a few minutes checking out readers who tweet or share my articles. (My 13-year-old would call it stalking. I call it market research.) I scope out profiles and websites and occasionally send short thank-you emails. I’m not looking for replies, but I occasionally get them, often starting a relationship. Some even lead to articles: That’s how I met her and him and him.

    Here’s how: Take a couple minutes a day and reach out–by phone or email, not by social media–to a customer or colleague or just a person you want to compliment or thank. Good karma is reason enough, but you’ll be surprised by the real, not virtual, connections you will build.

    2. Do something crazy.

    Well, not crazy to you, but crazy in the eyes of others. Pick something no one thinks you should or can do… and do it. If you want to think outside the box, you have to live outside the box, at least part of the time.

    If you want to have a life that’s different from other people’s, you must be willing to do what other people won’t.

    Here’s how: Challenge yourself. Humble yourself. Get over yourself. Get a part-time job, one that is “beneath” you. Be the only overweight person you know training for a marathon. Take a class you’ll struggle to even pass. Volunteer.

    Whatever you do, make sure it’s well outside your comfort zone. You’ll learn and grow and become better, stronger, and a lot more self-assured.

    Learning to not care what others think about you–in a healthy way–is incredibly empowering.

    3. Build a side business.

    Maintaining a laser-like focus is great.

    So is broadening your horizons.

    One of my friends runs a Web design firm and builds furniture on the side; as he puts it, “It’s nice to sometimes create things I can touch.” Another restores 1960s Corvettes and accidentally built a solid little parts business. A CEO friend designs landscape gardens on the weekends. Each took something they were interested in and made it a “business” of sorts.

    You don’t need to start a company, but you can leverage your interests to broaden your perspective–and in the process bring some of what you learn “outside” back into your core business.

    Here’s how: Pick something you enjoy doing and think of ways to make money from it. The point isn’t to get rich; the point is to open up to new ideas and new challenges.

    The business aspect will help spark creativity–since necessity is the mother of creativity–and help keep you focused.

    4. Create a morning ritual.

    Face it: Aside from showering, most of your time before work is wasted. Deciding what to wear, lingering over breakfast, checking out what your social media friends are doing (the answer is always “nothing”)… That’s all time wasted. Besides, you just slept for six or seven hours; break time is over, you slacker.

    When your morning is productive, not only will you arrive at work more energized, but you’ll also feel better about yourself. We can all use a little more of that.

    Here’s how: Choose things you want to accomplish and create a morning plan that gets you there.

    Maybe you want to exercise. Maybe you want to work on a presentation, work on your book, read things you need to read but never seem to find the time or energy to get to after work. You know what you’ve been wanting to do but haven’t done. Start doing it.

    Then use your evening to set up the morning: Pick out your clothes, get your breakfast ready (quick tip: A glass of milk and a protein bar make a very efficient breakfast). Do whatever you can to make it easy to get up, clean up, tackle your morning ritual, and head to work.

    Easy. And effective.

    5. Take a few minutes and think.

    Yeah, yeah, you think all day–but not really. Most of your thinking is reactive: to problems, issues, and challenges.

    That’s a very different type of thinking. Thinking when you don’t have to think is much more productive.

    Here’s how: Force inactivity. Turn off the radio when you drive to work. When you’re stuck in a line, don’t look for something to do–just stand there. Sit outside without a phone or book. Take a walk. Create situations where you’re stuck with only yourself.

    Sure, it will feel like death for a few minutes, but then out of boredom your thoughts will start to wander and your ideas will start to flow. And you’ll realize you don’t need the company of other people all the time because you’re pretty good company yourself.

    Without time to think, you can’t have ideas; your ideas are the best asset you possess.

    And here’s a bonus item:

    6. Call your folks.

    They always want to hear from you. And you always feel better after you make that call.

    15 Dumb Mistakes to Avoid When Pitching Investors

    Pitching venture capitalists or angel investors is nerve-racking. Young entrepreneurs explain trip-ups you should avoid at all costs.

    Young Entrepreneur Council

    The Young Entrepreneur Council asked 15 successful young entrepreneurs about the dumb mistakes entrepreneurs make when initially pitching to investors. Here are their best answers.

    1. Smelling of Desperation

    When you pitch to an investor, don’t sound desperate. People like to invest and be connected to winning projects. If you come off as though this investment is the only way for your business to move forward, it seems needy and is unattractive to many investors, and can set you up to be taken advantage of. You’ll end up giving away more equity then you should.
    Raoul Davis, Ascendant Strategy

    2. Thinking Only About Money

    When pitching an investor, you’re not just pitching your great idea. A relationship with an investor goes beyond the ROI, and it’s important to focus on selling yourself as well as your business plan.
    Raul Pla, SimpleWifi and UseABoat

     

    3. Going in Unprepared

    Just because you have an idea and you think you need help does not mean you’re ready to raise money. Even if you get an investor interested, nothing will bring the conversation to a screeching halt quite like not knowing how much you want to raise and what you’ll do with it. The questions are core to justifying the investment.
    Jason Evanish, Greenhorn Connect

    4. Introducing the NDA

    Ideas are cheap. Chances are you’ll be laughed out of the meeting if you ask investors to sign an NDA. More important, anyone willing to sign an NDA in a first meeting is probably not sophisticated or serious enough for you to be considering as an investor.
    –Michael Tolkin, Merchant Exchange
      

    5. What’s a Negotiation?

    It’s rare that an investor will, straight out of the gate, give you everything you ever wanted. You need to know what you can do with different levels of investment, and have an idea of what situations are bad enough to walk away from the table. A pitch to an investor is the start of a negotiation, and you should treat it as such.
    Thursday Bram, Hyper Modern Consulting

    6. Being Too Pushy

    The investors are there to hear your pitch because they see something in you and your company. Those who push their product or idea too much cause most investors to immediately shut down. Be cool and confident, but not like a used-car salesman. You only have one chance to make a first impression, and don’t blow it doing this simple thing.
    Ashley Bodi, Business Beware

    7. Not Saving the Best for Last

    Many entrepreneurs make the mistake of meeting with their best investor prospects first, yet their pitch only gets better with time. You will achieve your greatest odds by saving the best for last. Note reoccurring questions and concerns after each pitch, and revise your materials accordingly. Once you get to the big guys, you will be confident enough to close the deal.
    Christopher Kelly, Sentry Centers

    8. Taking Criticism Personally

    Most investors are direct and are going to ask you the tough questions. That’s a good thing; it means they’re thinking about your idea. Don’t take feedback or tough questions personally or as personal attacks. Answer directly, and if you don’t know, say so. Don’t make something up.
    Nathan Lustig, Entrustet

    9. Putting Down Your Passion

    You need more than passion to convince investors. You need a well-thought-out business plan and a great product. Even with that, though, don’t be afraid to let your passion show through. It’ll carry you through the entrepreneurial journey, and investors know that, so don’t try to be all business by hiding that enthusiasm. Display it. It’s an advantage, not a weakness.
    Nick Friedman, College Hunks Hauling Junk

    10. Leaving Without the QA

    Allowing time for questions will naturally create the need to have a concise and focused presentation, while also allowing the investors to partially guide the pitch. No matter how organized a pitch is, it may fail to answer certain questions your audience has. Planning for QA time allows your pitch to be clear to someone unfamiliar with your line of work.
    John Harthorne, MassChallenge

    11. Promising Too Much

    Don’t overpromise; go in with what you know, not what you think you can do. Investors will lose faith in you–that is, if they don’t see through you right away.
    Jordan Guernsey, Molding Box

     

    12. Being Overdiligent About Disruption

    Entrepreneurs often work on ideas in areas they’re passionate about. Along with that can come a sense of religion about changing the way a certain industry works. An entrepreneur who cares more about disruption than building a sustainable business can often lose sight of the decisions that must be made.
    Derek Shanahan, Foodtree

    13. Don’t Make Projections, Make Plans

    Don’t put a freaking hockey-stick graph in the presentation and expect everyone in the room to ooh and ahh. Projections are guesses that rarely come true. What’s more impressive is your plan to get there. Investors know that your strategy means a lot more than your pretty pictures.
    Brent Beshore, AdVentures

    14. Rushing the Pitch

    As nervous as you might be, try to calm down and speak from the heart. Memorization is often the biggest crutch during a presentation. Nerves get the best of us, and we try to rush through just to get it over with. Speaking more slowly not only allows the listeners to register what you’re saying, but it also makes you sound more confident and knowledgeable.
    Logan Lenz, Endagon

    15. Picking the Wrong Angle

    Entrepreneurs often make the mistake of pitching an angle about their business that may be exciting to them but isn’t necessarily what investors would like to hear. Investors want to learn more about very specific items that help them to formulate a judgment, such as how the business is going to make money and how the company will be scaled. 
    Ben Rubenstein, Yodle

    Understanding Shake Shack’s Special Sauce

    Can the company achieve global burger domination without becoming a soulless corporation? CEO Randy Garutti explains how he plans to do it.

    Shake Shack

    Flickr/jameskadamson

    shake shack burger

    The goods.

    The stereotypical New Yorker is hard charging, action oriented… and maybe just a tad (OK, more than a tad) impatient, right?

    Yet that same person is willing to stand in incredibly long lines every day… for burgers, hot dogs, fries, and frozen custard.

    Sounds hard to believe, but it’s true. Shake Shack fans can be die-hards.

    This is another in my series where I choose a topic, pick someone smarter than me (finding smarter people is turning out to be way easier than my ego enjoys), pick a topic, and trade emails. To find other articles in the series, go here, here, here, and here.

    This time I talked to Randy Garutti, the CEO of Shake Shack, a business that started as a hot dog cart in 2001 and grew to become a global restaurant chain. (Shake Shack is part of Danny Meyer’s Union Square Hospitality Group.)

    Here’s my premise: Once you grow to a certain size, even the most idealistic and principled small business becomes more corporate and, in short, “sells out.”

    Jeff: It happens all the time in almost every industry. Classic example: The funky guy in the converted warehouse who builds amazing furniture… and then one day his stuff is in every Pier 1. When that happens, some of your most loyal and vocal fans can become your biggest detractors, because they feel you’ve tossed aside what you once stood for.

    Shake Shack has grown from a hot dog cart to one iconic kiosk in Manhattan’s Madison Square Park with incredibly long lines to numerous locations in the city, in other states, and even Dubai. From the outside, it could appear you guys sold out and are going for the big bucks.

    Randy: Let’s start with this: Shake Shack was a complete accident. It all began when Danny Meyer and the Madison Square Park Conservancy decided to raise funds to turn the park around. Keep in mind that 13 years ago, we were fine-dining people who had Union Square Cafe and Gramercy Tavern, and we had just opened two restaurants, Tabla and Eleven Madison Park, situated on an underappreciated park.

    With Shake Shack, we had the opportunity to do something different and fun. It started with creating a hot dog cart to support a local art project. Out of the gate, and continuing through three consecutive summers, the cart was a massive success, and lines formed throughout the park all because we took a basic idea, focused on people’s experience, and just made it better. So, in 2004, Shake Shack was born.

    Jeff: Wait. You had no long-term plan? No long-term vision? No blueprint for success? Heresy. How dare you.

    Randy: When we first opened, we had no idea what was about to happen.  We certainly never dreamed there could ever be a second location. But we kept asking the question, “Who wrote that rule?”

    We posed that question on everything we did: Why can’t burgers be ground fresh every day from the best cuts of beef? Why do ranchers have to use hormones and antibiotics? Why can’t milkshakes be handspun from ice cream, or in our case frozen custard, that is made fresh all day long? Why can’t a burger joint have a happy team, one that’s well taken care of, to provide the same hospitality you expect from our fine-dining restaurants?

    And so it went. We asked this question about everything we did, and every year, we just got busier, the lines just got longer, and we kept having more fun.

    Jeff: I could argue that opening more locations might have taken the fun out of it–and with the success of all the other Union Square Hospitality Group ventures, it’s not like you “needed” to open more locations. Add the fact that many businesses start going backward the day they take a big step forward, and you were taking a pretty big risk, one that wasn’t just financial.

    Randy: It took us five years to open our second location on Manhattan’s Upper West Side; hardly a sellout and hardly a plan for world domination. We simply saw Shake Shack as a fun opportunity as we focused on steadily growing our overall company.

    Then something amazing happened. The original Shack actually got busier when we opened the second. Then, in 2009 and 2010, when we opened a few more here in NYC and one in Miami, all of the Shacks got busier.

    It was at that point we made the decision to grow, and here we are today with 16 Shacks, some in other states and even other countries.

    Now, let me get back to your question.

    It’s my belief that the term “selling out” is highly misused. Companies that grow, and grow well, deserve it. Who would argue that the world isn’t a better place every time Stonyfield Farm produces more yogurt? A dairy farmer can now produce milk the right way, make a living in a tough industry, and their consumers now have healthier options–hardly a sellout, and certainly a great growth story.

    Why wouldn’t you want to see Timberland sell more boots when they are great stewards of the environment in which their gear is used?

    Why wouldn’t you want to eat at Chipotle when you know they are striving every day to improve the supply chain, support small and local farms, and change the way the world thinks about fast food?

    We want to be the best burger company in the world–for our guests and for our team. We believe we have a unique opportunity to build something truly special.

    A picture hangs on my office wall to remind me and everyone who walks in my door that this is our key: “The bigger we get, the smaller we need to act.”

    Jeff: So how do you deal with the inevitable “systematization” of a business as it grows? Growth means more processes, more procedures, more guidelines… more everything.

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    Reminder: Strategy & Planning Are Not Optional

    You don’t want your company to be among the walking dead. Know what you offer, to whom, and why.


    The late Alex d’Arbeloff, founder of Teradyne, an electronics equipment supplier, introduced me to the term the “walking dead.” At the time, I was working for a company he had invested in, one that he put into this category. He explained it like this: A “walking dead” company is one that brings in enough revenue to keep going but never enough to take off.

    Since then, I’ve come to understand how companies end up in this awful predicament. In a desire to stay afloat, they chase revenue, any revenue. That means they end up taking on work that isn’t particularly strategic. They often under-price it just to close the deal quickly. In a cash crunch, they often hurry, which means they don’t listen as well as they should, or invest enough time understanding client needs. That means the work often goes over budget and way over schedule so the cash crunch continues. To get out of it, the company takes on yet more non-strategic work and the cycle continues.

    Walking dead companies think that the problem is cash. But actually the real problem is time. They can’t afford the time to think, to define, adopt, and stick to a strategy. The cash-time trap means they’re always busy but, on a deep level, not productive because they aren’t making real progress. Meanwhile, everyone is running as fast as they can; the smart people can see the company isn’t getting anywhere.

    I’ve known many companies like this and worked for a few. It isn’t fun and escape plans aren’t obvious. Cut costs and you can’t deliver services or products. Try to take time and cashflow sinks you. Meanwhile it’s hard to score triumphs significant enough to land more investment. VCs have seen a lot of walking dead companies and they can spot them a mile away.

    The walking dead are a salutary reminder that positioning and strategic focus aren’t luxuries but necessities. You have to know what you offer, to whom, and why they value it. Never deviate unless or until you change direction decisively. Don’t take on almost-but-not-quite-strategic work. Don’t deliver work that is just okay. Don’t over-promise and hope your customers won’t notice when you under-deliver. Don’t, even for a day, start thinking about “getting away with it.” Each small step of course brings you closer to twilight.

    2 Radical Ideas for Start-up Success

    Going solo? Making baby steps away from traditional Corporate America isn’t enough. A total paradigm shift may be in order.

    Radical ideas

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    It’s a pretty well-accepted fact that entrepreneurs typically approach business differently than traditional Corporate America workers.

    But many successful entrepreneurs take it a step further and completely flip the script in order to subscribe to a new business paradigm. Would your business benefit from a new way of thinking? Chris Guillebeau, an intriguing entrepreneur, traveler, and writer, offers just such a new formula in his new book, The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future.

    When he approached us about featuring Heritage Link Brands in his book, we were immediately aligned with its core principles, which involve the critical role of freedom and value within the microbusiness revolution. We also appreciated that he understood that renegade entrepreneurs–those who buck the system and go solo–can now test, launch, and scale their projects extremely quickly and on the cheap. He eschews some of the more traditional paths to starting your own small business and instead focuses the book on folks who start microbusinesses without investment or employees, and often without any expertise in the area they’re pursuing.

    There were two ideas that particularly resonated with me, because I’ve personally experienced just how much they have allowed our business to thrive through its ups and downs:

    1. The Power of the Almighty “Side Hustle” 

    The book encourages entrepreneurs to not limit themselves to their primary business idea but instead to also consider offshoots, spinoffs, and side projects. They shouldn’t exist because things are going poorly with your main hustle–precisely the opposite. Instead, Guillebeau encourages us to pursue other passions in the midst of success.

    When my wife and I set out on the entrepreneurial yellow-brick road, it was tempting to give up our side hustles–mainly rental properties. There were already so many things on our plate: We’d just gotten married, were pregnant with our first child, and now had a fantastic new opportunity that nobody else in the market had yet moved on. No matter the warnings, nothing could truly prepare me for the level of blood, sweat, and tears that went into our first year of business.

    Yet, even with that, I am grateful that we held on to our side hustles. Financially and mentally, it was important to have buffers in place to prevent us from getting thrown off by the inevitable challenges of our new wine business. In essence, I went from viewing our side hustles as optional–glorified chump change–to viewing them as keys to the kingdom. They are integral cornerstones of our financial foundation that solidified the path for us to pursue our passions.

    2. Give the People What They Want 

    Out of the gate, our focus was solely on importing black-produced wines from South Africa into the United States. But consumers soon let us know that they were also interested in enjoying wines produced by indigenous producers in other regions as well. Since we were just getting our bearings with South African wines (and importation!), it was enticing to play it safe and stick to our business plan, especially given the superhigh rate of new small businesses that fold in the first three years.

    We had done our due diligence, and it felt a bit crazy to turn our focus topsy-turvy–especially so quickly. But, man, am I happy that we decided to give the people what they wanted, because the people indeed knew what they were talking about! Thankfully, their feedback and purchasing habits matched. And it opened us up to a new plane of valuable large customers, such as airlines and restaurants, that were attracted to our more diverse wine portfolios.

    Rather than thinking that the most groundbreaking ideas are for “that maverick over there,” it’s time to consider that you may indeed be that maverick! Whether you adopt a completely new paradigm, or commit to constantly questioning your assumptions and remaining open to startling new ways of thinking, it could just generate your next big business triumph.