Knowledge Sharing:
1. Growth hackers build the product's potential growth, including user acquisition, on-boarding, monetization, retention, and virality, into the product itself.[
2. Fast Company[1] defined the problem facing most startups as 1) they don't have the money and 2) they don't have a traditional marketing background.[1] To combat this lack of money and experience, growth hackers approach marketing with a focus on innovation, scalability, and user connectivity
3. Fast Company used Twitter "Suggested Users List" as example: "This was Twitter's real secret: It built marketing into the product rather than building infrastructure to do a lot of marketing.
4. The heart of growth hacking is the relentless focus on growth as the only metric that truly matters.[19] Mark Zuckerberg, best known of the 5 co-founders of Facebook, is said to have had this mindset while growing Facebook
5. While the exact methods vary from company to company and from one industry to the next, the common denominator is always growth. Companies that have successfully "growth hacked" usually have a viral loop naturally built in to their onboarding process.[21] New customers typically hear about the product or service through their network and by using the product or service, share it with their connections in turn. This loop of awareness, use, and sharing can result in exponential growth for the company.
6. Besides Twitter, Facebook, Dropbox, Pinterest, YouTube, Groupon, Udemy, and Instagram are all companies that used and still use growth hacking techniques to build brands and improve profits
7. An early example of "growth hacking" was Hotmail's inclusion of "PS I Love You" with a link for others to get the free online mail service.[26] Another example was the offer of more storage by Dropbox to users who referred their friends.
8. The new job title of “Growth Hacker” is integrating itself into Silicon Valley’s culture, emphasizing that coding and technical chops are now an essential part of being a great marketer.
9. Growth hackers are a hybrid of marketer and coder, one who looks at the traditional question of “How do I get customers for my product?” and answers with A/B tests, landing pages, viral factor, email deliverability, and Open Graph.
10. On top of this, they layer the discipline of direct marketing, with its emphasis on quantitative measurement, scenario modeling via spreadsheets, and a lot of database queries. If a startup is pre-product/market fit, growth hackers can make sure virality is embedded at the core of a product. After product/market fit, they can help run up the score on what’s already working.
11. This isn’t just a single role – the entire marketing team is being disrupted. Rather than a VP of Marketing with a bunch of non-technical marketers reporting to them, instead growth hackers are engineers leading teams of engineers. The process of integrating and optimizing your product to a big platform requires a blurring of lines between marketing, product, and engineering, so that they work together to make the product market itself.
12. Projects like email deliverability, page-load times, and Facebook sign-in are no longer technical or design decisions – instead they are offensive weapons to win in the market.
14. Great examples include Pinterest, Zynga, Groupon, Instagram, Dropbox. New products with incredible traction emerge every week. These products, with millions of users, are built on top of new, open platforms that in turn have hundreds of millions of users – Facebook and Apple in particular.
15. Whereas the web in 1995 consisted of a mere 16 million users on dialup, today over 2 billion people access the internet. On top of these unprecedented numbers, consumers use super-viral communication platforms that rapidly speed up the proliferation of new products – not only is the market bigger, but it moves faster too.
16. Before this era, the discipline of marketing relied on the only communication channels that could reach 10s of millions of people – newspaper, TV, conferences, and channels like retail stores. To talk to these communication channels, you used people – advertising agencies, PR, keynote speeches, and business development. Today, the traditional communication channels are fragmented and passe. The fastest way to spread your product is by distributing it on a platform using APIs, not MBAs. Business development is now API-centric, not people-centric.
17. Airbnb does just this, with a remarkable Craigslist integration. They’ve picked a platform with 10s of millions of users where relatively few automated tools exist, and have created a great experience to share your Airbnb listing.It’s integrated simply and deeply into the product, and is one of the most impressive ad-hoc integrations I’ve seen in years. Certainly a traditional marketer would not have come up with this, or known it was even possible – instead it’d take a marketing-minded engineer to dissect the product and build an integration this smooth.
18. Without an API, you have to write a script that can scrape Craigslist and interact with its forms, to pre-fill all the information you want.
19. Long story short, this kind of integration is not trivial. There’s many little details to notice, and I wouldn’t be surprised if the initial integration took some very smart people a lot of time to perfect.
20. Who knows how much value Airbnb is getting from this integration, but in my book, it’s damn impressive. It taps into a low-competition, huge-volume marketing channel, and builds a marketing function deeply into the product. Best of all, it’s a win-win for everyone involved – both the people renting out their places by tapping into pre-built demand, and for renters, who see much nicer listings with better photos and descriptions.
21. This is just a case study, but with this type of integration, a new product is able to compete not just on features, but on distribution strategy as well. In this way, two identical products can have 100X different outcomes, just based on how well they integrate into Craigslist/Twitter/Facebook. It’s an amazing time, and a new breed of creative, technical marketers are emerging. Watch this trend.
22. For the first time ever, superplatforms like Facebook and Apple uniquely provide access to 10s of millions of customers
23. The discipline of marketing is shifting from people-centric to API-centric activities
24. Growth hackers embody the hybrid between marketer and coder needed to thrive in the age of platforms
25. Airbnb has an amazing Craigslist integration
Monday, January 19, 2015
Sunday, January 11, 2015
Understand Market
Knowledge Sharing:
1. An actual or nominal place where forces of demand and supply operate, and where buyers and sellers interact (directly or through intermediaries) to trade goods, services, or contracts or instruments, for money or barter.
Markets include mechanisms or means for (1) determining price of the traded item, (2) communicating the price information, (3) facilitating deals and transactions, and (4) effecting distribution. The market for a particular item is made up of existing and potential customers who need it and have the ability and willingness to pay for it.
1. An actual or nominal place where forces of demand and supply operate, and where buyers and sellers interact (directly or through intermediaries) to trade goods, services, or contracts or instruments, for money or barter.
Markets include mechanisms or means for (1) determining price of the traded item, (2) communicating the price information, (3) facilitating deals and transactions, and (4) effecting distribution. The market for a particular item is made up of existing and potential customers who need it and have the ability and willingness to pay for it.
2. Market segmentation is a marketing strategy that involves dividing a broad target market into subsets of consumers who have common needs and priorities, and then designing and implementing strategies to target them. Market segmentation strategies may be used to identify the target customers, and provide supporting data for positioning to achieve a marketing plan objective. Businesses may develop product differentiation strategies, or an undifferentiated approach, involving specific products or product lines depending on the specific demand and attributes of the target segment.
3. Geographic Segmentation is important and may be considered the first step to international marketing, followed by demographic and psychographic segmentation.
4. Marketers can segment according to geographic criteria—nations, states, regions, countries, languages, cities, neighborhoods, or postal codes.
5. Segmentation according to demography is based on variables such as age, gender, occupation and education level [2] or according to perceived benefits which a product/service may provide
6. Demographic segmentation divides markets into different life stage groups and allows for messages to be tailored accordingly.
7. Behavioral segmentation divides consumers into groups according to their knowledge of, attitude towards, usage rate or response to a product[4] There is an extra connectivity with all other market related sources.
8. Psychographic segmentation, which is sometimes called Lifestyle. This is measured by studying the activities, interests, and opinions (AIOs) of customers. It considers how people spend their leisure,[5] and which external influences they are most responsive to and influenced by. Psychographic is highly important to segmentation, because it identifies the personal activities and targeted lifestyle the target subject endures, or the image they are attempting to project. Mass Media has a predominant influence and effect on Psychographic segmentation. Lifestyle products may pertain to high involvement products and purchase decisions, to speciality or luxury products and purchase decisions.
9. Culture is a strong dimension of consumer behaviour and is used to enhance customer insight and as a component of predictive models. Cultural segmentation enables appropriate communications to be crafted to particular cultural communities, which is important for message engagement in a wide range of organisations, including businesses, government and community groups.
10. In Sales Territory Management, using more than one criterion to characterize the organization’s accounts,[9] such as segmenting sales accounts by government, business, customer, etc. and account size/duration, in effort to increase time efficiency and sales volume.
11.
How to develop Survey
References:
http://www.surveygizmo.com/survey-blog/how-to-improve-your-survey-email-invitations/
Business Best Practice
Best Practice:
1. When customers send a message to each other, always email the message to each other's inbox, but not disclose their email address, and ask customers to come back and use platform's email inbox.
2.
1. When customers send a message to each other, always email the message to each other's inbox, but not disclose their email address, and ask customers to come back and use platform's email inbox.
2.
What is the right way to define REST API
Approach One: Return 200 Status Code for Application Error Message
1. Define a standard RESTResponse object, which encapsulate all the application error message and return to UI. All the error will return 200 status code. Then UI will translate the error message and display it properly to UI.
Approach Two: Return 500 Status Code for Application Error Message
1. For application error message, throw an exception and return 500 status code.
2. Return the real JSON object back to UI, and let UI handle http status code.
3. This is the standard approach.
Best Practice:
1. Use the right URL Path
2. Use path variable instead of parameters
3. Use proper Error Response with Http Status Code and Error Message.
4.
1. Define a standard RESTResponse object, which encapsulate all the application error message and return to UI. All the error will return 200 status code. Then UI will translate the error message and display it properly to UI.
Approach Two: Return 500 Status Code for Application Error Message
1. For application error message, throw an exception and return 500 status code.
2. Return the real JSON object back to UI, and let UI handle http status code.
3. This is the standard approach.
Best Practice:
1. Use the right URL Path
2. Use path variable instead of parameters
3. Use proper Error Response with Http Status Code and Error Message.
4.
Create Positioning and Naming
Knowledge Sharing:
1. A powerful name is the result of a powerful positioning strategy. The key is to find a fresh way into the hearts and minds of your customers, redefine and own the conversation in your industry, and engage people on as many levels as possible.
2. The notion of describing a business in the name assumes that company names will exist at some point without contextual support, which is impossible. Company names will appear on websites, store fronts, in news articles or press releases, on business cards, in advertisements, or, at their most naked, in conversations.
3. Chrysler understood that consumers don't participate in this kind of literal, negative deconstruction, but rather accept things in the context provided.
4. Extra points to Verizon for understanding that a negative can be more positive than a positive
5. As always, we were looking for the one name that worked on as many levels as possible
6. Seven's abstract, slightly mystical quality, Nguyen reasoned, was the essence of its appeal. "It has so many different connotations," he says. "Seven Wonders of the World, seven days of the week, on the seventh day God rested. It's the number of perfection, the good-luck number. There's also a data language in the telecom industry called SS7, which the companies we deal with will appreciate."
7.
Understand Customer
Knowledge Sharing:
1. Commonly examined demographics include gender, age, ethnicity, knowledge of languages, disabilities, mobility, home ownership, employment status, and even location.
2.
Understand Persona:
1. the way you behave, talk, etc., with other people that causes them to see you as a particular kind of person : the image or personality that a person presents to other people
2. A persona (plural personae or personas), in the word's everyday usage, is a social role or a character played by an actor.
3. Some marketing experts recommend creating a marketing persona that represents a group of customers[16] so that the company can focus its efforts.
4.
1. Commonly examined demographics include gender, age, ethnicity, knowledge of languages, disabilities, mobility, home ownership, employment status, and even location.
2.
Understand Persona:
1. the way you behave, talk, etc., with other people that causes them to see you as a particular kind of person : the image or personality that a person presents to other people
2. A persona (plural personae or personas), in the word's everyday usage, is a social role or a character played by an actor.
3. Some marketing experts recommend creating a marketing persona that represents a group of customers[16] so that the company can focus its efforts.
4.
How to choose Name
Steps:
1. Define the positioning
2. Define the branding
3. Define the naming
4. Use tools to evaluate names
5. Define 3 candidates
References:
http://learningfolder.net/blog/how-to-pick-a-great-domain-name-for-a-start-up/
1. Define the positioning
2. Define the branding
3. Define the naming
4. Use tools to evaluate names
5. Define 3 candidates
References:
http://learningfolder.net/blog/how-to-pick-a-great-domain-name-for-a-start-up/
Business Questions
1. What is the difference between Customer Development, Customer Relationship, and Sales ?
2. What is Industry?
3. What is Follower, compared to Friends, Neighbors ?
4. What is the difference between Market and Marketing ?
5. How to keep customers make transaction on platform ?
6. How to keep customers come back more often on platform ?
7. How to distinguish our platform from NextDoor, TaskRabbit, Facebook, Dogvacay, Rover ?
8. What is the difference between small business and startup ? (Answered)
9. What is the difference between startup and big corporations?
10. What is a business ?
11. What is the business lifecycle?
12. How to keep relationship with the customers ?
13. How to reply all the dog owners ?
14. How to make business scalable ? (In different locations in UA, different countries. or in different services in the same location.)
15. What is the difference between selling and explaning ?
16.
2. What is Industry?
3. What is Follower, compared to Friends, Neighbors ?
4. What is the difference between Market and Marketing ?
5. How to keep customers make transaction on platform ?
6. How to keep customers come back more often on platform ?
7. How to distinguish our platform from NextDoor, TaskRabbit, Facebook, Dogvacay, Rover ?
8. What is the difference between small business and startup ? (Answered)
9. What is the difference between startup and big corporations?
10. What is a business ?
11. What is the business lifecycle?
12. How to keep relationship with the customers ?
13. How to reply all the dog owners ?
14. How to make business scalable ? (In different locations in UA, different countries. or in different services in the same location.)
15. What is the difference between selling and explaning ?
16.
Understand Customer Acquisition
Knowledge Sharing:
1. Customer acquisition management is the set of methodologies and systems to manage customer prospects and inquiries generated by a variety of marketing techniques. Various marketing techniques that are believed to be effective at Customer Acquisition include customer referrals,[1] customer loyalty programs, and participating in charitable events. Customer Acquisition Management can be considered the connectivity between advertising and customer relationship management. This critical connectivity facilitates the acquisition of targeted customers in an effective fashion.[2]
2. Such a reporting system typically allows the organization to quantify the effectiveness of results of various promotional activities. This allows organizations to realize continuous improvements in both promotional activities and customer acquisition systems.
Linear lead flow process
References:
1. http://www.helpscout.net/customer-acquisition/
2. http://en.wikipedia.org/wiki/Customer_acquisition_management
3. http://en.wikipedia.org/wiki/Lead_management
4. https://blog.kissmetrics.com/guide-to-customer-acquisition/
1. Customer acquisition management is the set of methodologies and systems to manage customer prospects and inquiries generated by a variety of marketing techniques. Various marketing techniques that are believed to be effective at Customer Acquisition include customer referrals,[1] customer loyalty programs, and participating in charitable events. Customer Acquisition Management can be considered the connectivity between advertising and customer relationship management. This critical connectivity facilitates the acquisition of targeted customers in an effective fashion.[2]
2. Such a reporting system typically allows the organization to quantify the effectiveness of results of various promotional activities. This allows organizations to realize continuous improvements in both promotional activities and customer acquisition systems.
3. Customer acquisition management also often includes the original response to a prospect immediately after their inquiry. This response could come in many forms – a personalized fulfillment letter and brochure, an e-mail response or a telephone call. In each case the initial response is targeted to further the interest of the prospect and simplify the initial sales call for the sales channel.
4. Like lead management, customer acquisition management creates an orderly architecture for managing large volumes of customer inquiries, or leads. The architecture must be able to organize numerous leads, at various stages of a sales process, across a distributed sales force.
5. By creating methods and processes to track key acquisition metrics, organizations can get a more accurate picture of what traffic and new customers result from each channel.
6. Lead Management is a set of methodologies, systems, and practices designed to generate new potential business clientele, generally operated through a variety of marketing campaigns or programs
7. This critical connectivity facilitates business profitability through the acquisition of new customers, selling to existing customers, and creating a market brand. This process has also accurately been referred to as customer acquisition management.
8. The general principles of lead management create an ordered structure for managing volumes of business inquiries, frequently termed leads. The process creates an architecture for organization of data, distributed across the various stages of a sales process, and across a distributed sales force. With the advent of the Internet and other information systems technologies, this process has rapidly become technology-centric, as businesses practicing lead management techniques have shifted much of the prior manual workload to automation systems, though personal interaction with lead inquiries is still vital to success.
9. Along with its other related business practices--marketing, brand development, advertising, and sales—the goal of an effective lead management initiative is to generate new business revenue, increase visibility, and improve the general attitudes of potential clients and the public at large for future business development.
10. acquiring new customers means understanding what makes your customers tick and investing heavily in inbound marketing strategies such as content, building an email newsletter and search engine optimization (SEO).
11. Inbound marketing pulls customers in with value-generating resources (such as the one you’re reading right now!). Sure, it takes time to create great content, but a robust resource center can drive qualified visitors for the life of your business.
12. On the other hand, outbound marketing requires you to keep writing checks in order to bring in new visitors. When the checks stop going out, the new visitors stop coming in.
14. Do you know what smart entrepreneurs do with the traffic they receive from inbound marketing content and SEO? They build an email list.
15. Outside of direct sales, there is no better business outcome attached to first-time visitors than when they subscribe to receive newsletters and email updates from you.
16. Choosing the right words is an important part of how your business sells online, so invest a little time in learning about powerful wordsmithing.
17. Building an online business without utilizing analytics is like driving with your eyes closed. If you don’t know what’s working (or what’s not!), where people are visiting, and how your pages are performing, then you’re headed toward failure.
18. It’s time to take what you’ve learned and start building. Every entrepreneur needs a customer acquisition toolbox that helps him or her work smarter than the big guys.
19. Considering your business’ capabilities and limitations, create an inbound marketing strategy that prioritizes the pieces you want to deliver first to begin driving customer acquisition. And don’t reinvent the wheel when you’re crafting these pieces — the blogs and articles above are excellent starting points to guide your efforts.
20.
Learning:
1. Customer Acquisition is the most important skills in startup.
2.
Linear lead flow process
1. Advertising and CRM
2. Customer inquiry or response
3. Inquiry captured
4. Inquiry filtered
5. Lead graded and prioritized
6. Lead distribution
7. Sales contact
8. Lead nurturing or retention
9. Sales result
10. Analysis of promotion's effectiveness
A typical outline of a lead management process might follow the following steps:
- Business engages in a range of advertising media (Lead generation).
- Recipients of advertising respond, creating a Customer inquiry, or lead.
- Respondent's information is captured (Inquiry Capture).
- Captured information is then filtered to determine validity (Inquiry filtering)
- The filtered leads are then graded and prioritized for potential (Lead grading)
- Leads are then distributed to marketing and/or sales personnel (Lead distribution).
- Leads are contacted for prospecting (Sales contact).
- Contacted and uncontacted leads are entered into personal and automated follow-up processes (Lead nurturing).
- End result is a new business sale (Sales result).
References:
1. http://www.helpscout.net/customer-acquisition/
2. http://en.wikipedia.org/wiki/Customer_acquisition_management
3. http://en.wikipedia.org/wiki/Lead_management
4. https://blog.kissmetrics.com/guide-to-customer-acquisition/
Understand Law
Delaware:
http://en.wikipedia.org/wiki/Delaware
H1B vs Founder:
1. This issue comes up frequently. An H-1B visa holder can be a founder and can own any portion (including all) of a corporation's shares. What is prohibited, however, is working for the business.
2. he individual can form a business in the U.S. but cannot work for it. Note that USCIS gives H-1B cases particularly careful scrutiny.
3. Let’s assume that the new business is formed as a corporation. Being a shareholder certainly is a passive activity. Being a director (board member) typically should be a passive activity, too, because directors’ role is one of oversight and approval (elect officers, approve major transactions, etc.), rather than running the business.
4. if you are a non-resident alien who must keep his or her activities for a business passive: It’s OK to be a shareholder and a director, but don’t become an officer, employee or independent contractor of the business or do any additional work for it.
5. This means that the H1B visa holder cannot work for the company, cannot be involved in the day to day operation of the company, receive stock in return for work, etc. The H1B visa holder, however, may receive dividends from the company.
6. foreign nationals, including those resident in H-1B status, are not restricted in any way from holding equity in US companies. However, H-1B holders can only legally work for their sponsoring employer(s).
7. This is quite a common problem. Most people in this situation use a B visitor visa to participate in programs like YC or 500 Startups. This is fine, as long as you limit your activities to those allowed by the B visa. Permissible activities include negotiating contracts, pitching to investors, securing funding, forming your business entity, signing clients or vendors, working on your business plan, attending talks, lectures, or conferences, doing market research, etc. If you limit yourself to working on the business side of your project and attending events at the accelerator, most likely your activities will be covered under the B visa.
8. Your idea that if you get selected at YC, get a friend - whose name can be on the company and you own all of the class A stock. the structure of the company is immaterial to the Gov and have a VC on the Board.
9. Yes, you would be breaking a law if you are a co-founder of a US company while on H1-B.
10. Legally, you can be a co-founder of a company while you are on H1-B. But, you can not participate in business activities and you can not take salary.
11. You are not allowed to do any sort of work for your company including programming, business development, marketing etc. You can only be an inactive partner in the company.
But practically speaking, you could get away with it while two of you develop the software from your apartment. USCIS is not going to monitor what you have been doing on your computer at home.
It would be difficult when your business grows and have employees & customers. Make sure that you are able to transfer H1-B to your company by then.
I guess founders of few YC and TechStars companies come to US on Visa Waiver Program or Visitor visa for few months and work on their startup.
12. As a founder, you shall be able to find work around the law.
14. In small private companies, the directors and the shareholders are normally the same people, and thus there is no real division of power. In large public companies, the board tends to exercise more of a supervisory role, and individual responsibility and management tends to be delegated downward to individual professional executives (such as a finance director or a marketing director) who deal with particular areas of the company's affairs
15.
Question:
1. Is Founder a job?
2. Can H1B be a founder?
3.
References:
http://www.forbes.com/sites/greggfairbrothers/2013/05/06/who-is-a-founder/
http://www.k9ventures.com/blog/2009/09/24/my-story-and-support-for-the-founders-visa/
https://news.ycombinator.com/item?id=2619088
http://en.wikipedia.org/wiki/Delaware
H1B vs Founder:
1. This issue comes up frequently. An H-1B visa holder can be a founder and can own any portion (including all) of a corporation's shares. What is prohibited, however, is working for the business.
2. he individual can form a business in the U.S. but cannot work for it. Note that USCIS gives H-1B cases particularly careful scrutiny.
3. Let’s assume that the new business is formed as a corporation. Being a shareholder certainly is a passive activity. Being a director (board member) typically should be a passive activity, too, because directors’ role is one of oversight and approval (elect officers, approve major transactions, etc.), rather than running the business.
4. if you are a non-resident alien who must keep his or her activities for a business passive: It’s OK to be a shareholder and a director, but don’t become an officer, employee or independent contractor of the business or do any additional work for it.
5. This means that the H1B visa holder cannot work for the company, cannot be involved in the day to day operation of the company, receive stock in return for work, etc. The H1B visa holder, however, may receive dividends from the company.
6. foreign nationals, including those resident in H-1B status, are not restricted in any way from holding equity in US companies. However, H-1B holders can only legally work for their sponsoring employer(s).
7. This is quite a common problem. Most people in this situation use a B visitor visa to participate in programs like YC or 500 Startups. This is fine, as long as you limit your activities to those allowed by the B visa. Permissible activities include negotiating contracts, pitching to investors, securing funding, forming your business entity, signing clients or vendors, working on your business plan, attending talks, lectures, or conferences, doing market research, etc. If you limit yourself to working on the business side of your project and attending events at the accelerator, most likely your activities will be covered under the B visa.
8. Your idea that if you get selected at YC, get a friend - whose name can be on the company and you own all of the class A stock. the structure of the company is immaterial to the Gov and have a VC on the Board.
9. Yes, you would be breaking a law if you are a co-founder of a US company while on H1-B.
10. Legally, you can be a co-founder of a company while you are on H1-B. But, you can not participate in business activities and you can not take salary.
11. You are not allowed to do any sort of work for your company including programming, business development, marketing etc. You can only be an inactive partner in the company.
But practically speaking, you could get away with it while two of you develop the software from your apartment. USCIS is not going to monitor what you have been doing on your computer at home.
It would be difficult when your business grows and have employees & customers. Make sure that you are able to transfer H1-B to your company by then.
I guess founders of few YC and TechStars companies come to US on Visa Waiver Program or Visitor visa for few months and work on their startup.
12. As a founder, you shall be able to find work around the law.
14. In small private companies, the directors and the shareholders are normally the same people, and thus there is no real division of power. In large public companies, the board tends to exercise more of a supervisory role, and individual responsibility and management tends to be delegated downward to individual professional executives (such as a finance director or a marketing director) who deal with particular areas of the company's affairs
15.
Question:
1. Is Founder a job?
2. Can H1B be a founder?
3.
References:
http://www.forbes.com/sites/greggfairbrothers/2013/05/06/who-is-a-founder/
http://www.k9ventures.com/blog/2009/09/24/my-story-and-support-for-the-founders-visa/
https://news.ycombinator.com/item?id=2619088
Understand Board
Board Meetings:
1. Formal meeting of the board of directors of an organization, held usually at definite intervals to consider policy issues and major problems. Presided over by a chairperson (chairman or chairwoman) of the organization or his or her appointee, it must meet the quorum requirements and its deliberations must be recorded in the minutes. Under the doctrine of collective responsibility, all directors (even if absent) are bound by its resolutions.
Knowledge Sharing:
1. After you have filed incorporation documents, paid filing fees, drafted bylaws, and met with lawyers and accountants, the next step to starting a corporation is to hold an initial board meeting. This meeting is required in order to legally form a corporation. There are several important things to be done at this meeting, but it can also be a bit of a celebration for those involved with starting the corporation, as it signals the end of the formal incorporation process.
2.
1. Formal meeting of the board of directors of an organization, held usually at definite intervals to consider policy issues and major problems. Presided over by a chairperson (chairman or chairwoman) of the organization or his or her appointee, it must meet the quorum requirements and its deliberations must be recorded in the minutes. Under the doctrine of collective responsibility, all directors (even if absent) are bound by its resolutions.
2.
Knowledge Sharing:
1. After you have filed incorporation documents, paid filing fees, drafted bylaws, and met with lawyers and accountants, the next step to starting a corporation is to hold an initial board meeting. This meeting is required in order to legally form a corporation. There are several important things to be done at this meeting, but it can also be a bit of a celebration for those involved with starting the corporation, as it signals the end of the formal incorporation process.
2.
Understand Finance
Knowledge Sharing:
1. The accounting books of a company start with a chart of accounts. There are two kinds of accounts; income/expense accounts and asset/liability accounts.
2. Advertising revenue that you receive from Google Adsense would be an income account. The salary expense of a developer you hire would be an expense account. Your cash in your bank account would be an asset account. The money you owe on your company credit card would be called "accounts payable" and would be a liability.
3. The concept of double entry accounting is important to understand. Each financial transaction has two sides to it and you need both of them to record the transaction. Let's go back to that Adsense revenue example. You receive a check in the mail from Google. You deposit the check at the bank. The accounting double entry is you record an increase in the cash asset account on the balance sheet and a corresponding equal increase in the advertising revenue account. When you pay the credit card bill, you would record a decrease in the cash asset account on the balance sheet and a decrease in the "accounts payable" account on the balance sheet.
4. These accounting entries can get very complicated with many accounts involved in a single recorded transaction, but no matter how complicated the entries get the two sides of the financial transaction always have to add up to the same amount. The entry must balance out. That is the science of accounting
5. the profit and loss statement which is a report of the changes in the income and expense accounts over a certain period of time (month and year being the most common)
• the balance sheet which is a report of the balances all all asset and liability accounts at a certain point in time
• the cash flow statement which is report of the changes in all of the accounts (income/expense and asset/liability) in order to determine how much cash the business is producing or consuming over a certain period of time (month and year being the most common)
6. If you have a company, you must have financial records for it. And they must be accurate and up to date. I do not recommend doing this yourself. I recommend hiring a part-time bookkeeper to maintain your financial records at the start. A good one will save you all sorts of headaches. As your company grows, eventually you will need a full time accounting person, then several, and at some point your finance organization could be quite large.
7. There is always a temptation to skimp on this part of the business. It's not a core part of most startup businesses and is often not valued by tech entrepreneurs. But please don't skimp on this. Do it right and well. And hire good people to do the accounting work for your company. It will pay huge dividends in the long run.
8. In the early days the CEO is the jack-of-all-trades, doer-of-all, famously the “chief janitor” or coffee maker. But if you level up, raise capital and grow customers, revenue and staff – life changes. Eventually you need a VP of Product to handle your product roadmap, a CTO for engineering leadership and VPs of sales, marketing & biz dev. Most companies that are scaling have CFOs, heads of HR or talent. The “span of control” for a growing tech startup is probably 6-9 people. The “doers” in your organization.
9. This is when your job function truly starts to match the definition of “leader” because that’s exactly what your role is. You set direction. You hire great people. You help them prioritize their objectives and review the results. You course correct. You motivate, cajole, reassign tasks, hire, fire and push the organization forward. CEOs who try to do everything themselves rather than lead are usually pretty ineffective – they can’t scale.
10. Leadership is actually quite difficult. You have this tension between on the one side being a micro-manager (by which great people won’t want to work with you) or being hands off (and having quality lapses or team alignment issues). Neither end of the spectrum is particularly effective. The best leaders are great at hiring in large part because they are inspirational.
11. If you hire truly talented people you end up definitionally with a lot of competitive peers who will inevitably jockey for resources and control. Extremely talented people are ultra competitive.
12. I’ve come up with a set of rules that describe our reactions to technologies:
1. Anything that is in the world when you’re born is normal and ordinary and is just a natural part of the way the world works.
2. Anything that’s invented between when you’re fifteen and thirty-five is new and exciting and revolutionary and you can probably get a career in it.
3. Anything invented after you’re thirty-five is against the natural order of things.
14.
References:
http://avc.com/2012/08/mba-mondays-accounting-from-the-archives/
http://www.bothsidesofthetable.com/
http://cdixon.org/
1. The accounting books of a company start with a chart of accounts. There are two kinds of accounts; income/expense accounts and asset/liability accounts.
2. Advertising revenue that you receive from Google Adsense would be an income account. The salary expense of a developer you hire would be an expense account. Your cash in your bank account would be an asset account. The money you owe on your company credit card would be called "accounts payable" and would be a liability.
3. The concept of double entry accounting is important to understand. Each financial transaction has two sides to it and you need both of them to record the transaction. Let's go back to that Adsense revenue example. You receive a check in the mail from Google. You deposit the check at the bank. The accounting double entry is you record an increase in the cash asset account on the balance sheet and a corresponding equal increase in the advertising revenue account. When you pay the credit card bill, you would record a decrease in the cash asset account on the balance sheet and a decrease in the "accounts payable" account on the balance sheet.
4. These accounting entries can get very complicated with many accounts involved in a single recorded transaction, but no matter how complicated the entries get the two sides of the financial transaction always have to add up to the same amount. The entry must balance out. That is the science of accounting
5. the profit and loss statement which is a report of the changes in the income and expense accounts over a certain period of time (month and year being the most common)
• the balance sheet which is a report of the balances all all asset and liability accounts at a certain point in time
• the cash flow statement which is report of the changes in all of the accounts (income/expense and asset/liability) in order to determine how much cash the business is producing or consuming over a certain period of time (month and year being the most common)
6. If you have a company, you must have financial records for it. And they must be accurate and up to date. I do not recommend doing this yourself. I recommend hiring a part-time bookkeeper to maintain your financial records at the start. A good one will save you all sorts of headaches. As your company grows, eventually you will need a full time accounting person, then several, and at some point your finance organization could be quite large.
7. There is always a temptation to skimp on this part of the business. It's not a core part of most startup businesses and is often not valued by tech entrepreneurs. But please don't skimp on this. Do it right and well. And hire good people to do the accounting work for your company. It will pay huge dividends in the long run.
8. In the early days the CEO is the jack-of-all-trades, doer-of-all, famously the “chief janitor” or coffee maker. But if you level up, raise capital and grow customers, revenue and staff – life changes. Eventually you need a VP of Product to handle your product roadmap, a CTO for engineering leadership and VPs of sales, marketing & biz dev. Most companies that are scaling have CFOs, heads of HR or talent. The “span of control” for a growing tech startup is probably 6-9 people. The “doers” in your organization.
9. This is when your job function truly starts to match the definition of “leader” because that’s exactly what your role is. You set direction. You hire great people. You help them prioritize their objectives and review the results. You course correct. You motivate, cajole, reassign tasks, hire, fire and push the organization forward. CEOs who try to do everything themselves rather than lead are usually pretty ineffective – they can’t scale.
10. Leadership is actually quite difficult. You have this tension between on the one side being a micro-manager (by which great people won’t want to work with you) or being hands off (and having quality lapses or team alignment issues). Neither end of the spectrum is particularly effective. The best leaders are great at hiring in large part because they are inspirational.
11. If you hire truly talented people you end up definitionally with a lot of competitive peers who will inevitably jockey for resources and control. Extremely talented people are ultra competitive.
12. I’ve come up with a set of rules that describe our reactions to technologies:
1. Anything that is in the world when you’re born is normal and ordinary and is just a natural part of the way the world works.
2. Anything that’s invented between when you’re fifteen and thirty-five is new and exciting and revolutionary and you can probably get a career in it.
3. Anything invented after you’re thirty-five is against the natural order of things.
14.
References:
http://avc.com/2012/08/mba-mondays-accounting-from-the-archives/
http://www.bothsidesofthetable.com/
http://cdixon.org/
How to design business model
Knowledge Sharing:
1. The business is scalable means that your business has the potential to multiply revenue with minimal incremental cost. Ready to scale is when you have a proven product and a proven business model, about to expand to new geographies and markets.
2. Most consulting services, like marketing, are not scalable, since they must be delivered by experts, and cloning experts is slow and expensive. Investors don’t invest in services startups.
3. Investors like ideas based on market research from outside experts, like Gartner Research, proclaiming a billion dollar opportunity with a double digit growth rate. These are more likely scalable and investable.
4. It’s hard to build and scale a business on free high-support products. Scalable businesses have high margins (over 50%), low support, and minimum staffs.
5. No product, even with a large opportunity, is ready to scale until you can show it working, with multiple customers paying the full price, to validate the business model. Count on multiple pivots with real customers, before you get it right, before you ask for investor money to scale.
6. If you are still spending most of your time working “in” your business, rather than “on” your business, then you are not yet ready to scale. Show that you have and can continue to hire the right people to run the scaled business without you being everywhere and making every decision.
7. Great business models depend on developing three "green lights," or qualities that help the business succeed: finding high-value customers, offering significant value to customers, and delivering significant margins. Great business models also avoid three "red lights" that can derail a business: difficulties in satisfying customers, trouble maintaining market position, and problems generating funding for growth.
8.
Tips:
References:
http://www.forbes.com/sites/martinzwilling/2013/09/06/10-tips-for-building-the-most-scalable-startup/
http://www.entrepreneur.com/article/176530
http://www.marsdd.com/mars-library/business-model-design/
1. The business is scalable means that your business has the potential to multiply revenue with minimal incremental cost. Ready to scale is when you have a proven product and a proven business model, about to expand to new geographies and markets.
2. Most consulting services, like marketing, are not scalable, since they must be delivered by experts, and cloning experts is slow and expensive. Investors don’t invest in services startups.
3. Investors like ideas based on market research from outside experts, like Gartner Research, proclaiming a billion dollar opportunity with a double digit growth rate. These are more likely scalable and investable.
4. It’s hard to build and scale a business on free high-support products. Scalable businesses have high margins (over 50%), low support, and minimum staffs.
5. No product, even with a large opportunity, is ready to scale until you can show it working, with multiple customers paying the full price, to validate the business model. Count on multiple pivots with real customers, before you get it right, before you ask for investor money to scale.
6. If you are still spending most of your time working “in” your business, rather than “on” your business, then you are not yet ready to scale. Show that you have and can continue to hire the right people to run the scaled business without you being everywhere and making every decision.
7. Great business models depend on developing three "green lights," or qualities that help the business succeed: finding high-value customers, offering significant value to customers, and delivering significant margins. Great business models also avoid three "red lights" that can derail a business: difficulties in satisfying customers, trouble maintaining market position, and problems generating funding for growth.
8.
Tips:
- If you need investors, start with a scalable idea.
- Build a business plan and model that is attractive to investors.
- Use a minimum viable product (MVP) to validate the model.
- Build a strong team to take yourself out of the critical path.
- Outsource what is non-strategic to optimize leverage.
- Focus on marketing and indirect channels to get the message out quickly.
- Automate to the max
- Attract and relish investor funding.
- Consider all possibilities for licensing and franchising.
- Define a business that is open-ended and continuously improving.
References:
http://www.forbes.com/sites/martinzwilling/2013/09/06/10-tips-for-building-the-most-scalable-startup/
http://www.entrepreneur.com/article/176530
http://www.marsdd.com/mars-library/business-model-design/
What is the difference between business and startup
Knowledge Sharing:
1. a startup is a “temporary organization designed to search for a repeatable and scalable business model.”
2. A startup, which he argues in the context of the tech industry (and this conversation) should be short for “scalable startup,” is searching to not only prove their business model, but to do so quickly, in a way that will have a significant impact on the current market.
3. As Blank describes it, a scalable startup founder doesn’t just want to be her own boss; she wants to take over the universe. From day one her intent is to grow her startup into a large, disruptive company. She believes that she has come across the next “big idea,” one that will truly shake up the industry, take customers from existing companies, or even create a new market.
4. This stands is in stark contrast with the definition of a small business, which the U.S. Small Business Administration (SBA) describes as “independently owned and operated, organized for profit, and not dominant in its field.”
5. The Intent of the startup founder is to disrupt the market with a scalable and impactful business model; whereas the intent of the small business owner is to be her own boss and secure a place in the local market.
6. To be sure, the latter is the prevailing model of entrepreneurship in the United States: grocery stores, delis, hair salons, plumbers, electricians, etc. and their contribution to the local economy cannot be overstated. However, for better or for worse, the ultimate motivation behind a small business is fundamentally different from that of scalable startup.
7. Given this definition, it stands that once a business model has been proven the function of the organization must shift to produce outcomes and execute said model; in many cases removing the agility and innovation that once existed in the early days of the business.
8. While both a startup and small business will likely start with funding from the founder’s savings, friends and family, or a bank loan; if a startup is successful, it will receive additional series of funding from angel investors, venture capitalist, and (if it’s lucky) with an initial public offering (IPO). With each series of funding, the startup founder gives up a piece of her company–this is called equity, and everyone who has it becomes a co-owner of the company.
9. Eventually, a startup may cease to exist as an independent entity via a merger or acquisition. To a small business owner, relinquishing control would defeat the purpose of running their own business; however, for the startup it may be necessary to sustain seemingly infinite growth.
10. Although the startup founder and small business owner are both entrepreneurs; the intent, primary function, and funding of their respective business model’s are radically different
11.
According to Blank, this means that a startup founder has three main functions:
1. To provide a vision of a product with a set of features
2. To create a series of hypotheses about all the pieces of the business model: Who are the customers? What are the distributions channels? How do we build and finance the company, etc.
3. To quickly validate whether the model is correct by seeing if customers behave as your model predicts (which he admits they rarely do).
1. a startup is a “temporary organization designed to search for a repeatable and scalable business model.”
2. A startup, which he argues in the context of the tech industry (and this conversation) should be short for “scalable startup,” is searching to not only prove their business model, but to do so quickly, in a way that will have a significant impact on the current market.
3. As Blank describes it, a scalable startup founder doesn’t just want to be her own boss; she wants to take over the universe. From day one her intent is to grow her startup into a large, disruptive company. She believes that she has come across the next “big idea,” one that will truly shake up the industry, take customers from existing companies, or even create a new market.
4. This stands is in stark contrast with the definition of a small business, which the U.S. Small Business Administration (SBA) describes as “independently owned and operated, organized for profit, and not dominant in its field.”
5. The Intent of the startup founder is to disrupt the market with a scalable and impactful business model; whereas the intent of the small business owner is to be her own boss and secure a place in the local market.
6. To be sure, the latter is the prevailing model of entrepreneurship in the United States: grocery stores, delis, hair salons, plumbers, electricians, etc. and their contribution to the local economy cannot be overstated. However, for better or for worse, the ultimate motivation behind a small business is fundamentally different from that of scalable startup.
7. Given this definition, it stands that once a business model has been proven the function of the organization must shift to produce outcomes and execute said model; in many cases removing the agility and innovation that once existed in the early days of the business.
8. While both a startup and small business will likely start with funding from the founder’s savings, friends and family, or a bank loan; if a startup is successful, it will receive additional series of funding from angel investors, venture capitalist, and (if it’s lucky) with an initial public offering (IPO). With each series of funding, the startup founder gives up a piece of her company–this is called equity, and everyone who has it becomes a co-owner of the company.
9. Eventually, a startup may cease to exist as an independent entity via a merger or acquisition. To a small business owner, relinquishing control would defeat the purpose of running their own business; however, for the startup it may be necessary to sustain seemingly infinite growth.
10. Although the startup founder and small business owner are both entrepreneurs; the intent, primary function, and funding of their respective business model’s are radically different
11.
According to Blank, this means that a startup founder has three main functions:
1. To provide a vision of a product with a set of features
2. To create a series of hypotheses about all the pieces of the business model: Who are the customers? What are the distributions channels? How do we build and finance the company, etc.
3. To quickly validate whether the model is correct by seeing if customers behave as your model predicts (which he admits they rarely do).
Understand Landing Page
Knowledge Sharing:
1. A landing page is a web page that allows you to capture a visitor's information through a lead form.
2. Whether you’re building a landing page for a new lead or an existing lead or customer, the end goal is the same: to capture your lead’s interest in something you have to offer, and then use this opportunity to nurture them further down the marketing funnel towards the next sale.
3. A landing page is the page a visitor arrives at on your website after clicking an ad (for example, a Google text ad or display ad). Inexperienced marketers often direct all of their PPC traffic to their homepage, but this can be a big mistake. Specific landing pages tailored to different offers are essential for providing a quality experience for visitors and driving conversions with a targeted message that matches each user’s need.
4. And what are their hopes, dreams, and aspirations? As silly as that sounds, it’s true to some degree – the better you understand your audience, the more you can cater to their wants and needs. Unless you know who your ideal customers are, it will be very difficult to write persuasive copy in the voice of the customer. So get in your audience’s head, Hannibal Lecter-style.
5. Businesses with more landing pages (30+) generate 7x more leads than those with only a handful, so there’s no denying their value. Ideally you want a tailored landing page for each ad group, but that’s a pretty hefty operation, so start where you can. Try beginning with one custom landing page per campaign, and add from there for individual ad groups when resources allow.
6. A landing page should offer all the necessary information, but not so much as to overwhelm (and as a result, drive away) the visitor. Provide the essential info that will interest your audience and nothing more.
7. The whole point of having landing pages, of course, is to get leads through PPC. Landing Pages & Leads helps ensure that you’re in a position both to get more leads and to understand why and how you got them! Here you can check your conversion rates and dig in for more lead intelligence:
8. You don’t want people to just visit your page. You want them to take action once they are there. So make it as easy and compelling as possible for them by including these elements found in a landing page that CONVERTS:
9. Don’t distract them with lots of other requests. The best pages accentuate only one CTA.
10. Research has shown that the more choices you offer people, the longer they take to make a decision.
11. Study after study has shown that more fields = lower response, so ask your visitors for the bare minimum.
12. In Salesforce, There’s no navigation bar up top, the few administrative links are tucked away at the bottom, and social links are small and discreetly grayed out. The form asks for just a few fields and follows up with a nice, bright, benefit-offering CTA.
14. It’s generally believed that you should describe what you’re selling from the customer’s viewpoint. In other words, explain what problems your product or service can help solve. That may be true for your site, or it may not; this is a rich area for testing
15. So when you’re writing your headline, go for clear and explanatory over coy and clever.
16. Keep the most essential parts of your message – logo, headline, call to action, a supporting visual – in the center top of the screen, with supporting messaging lower down on the page.
17. Aah, it’s all there – good headline, bright CTA, social proof, and some VIA. Even on a smaller screen, the most important elements will be visible.
18. As with the headline, distracting elements can work when you’re trying to get attention. But when people are on your site, you don’t want to sidetrack them with a bunch of visual junk.
19. It’s tempting to add dramatic swirls, jQuery sliders, exploding graphs, and stock photos of people looking deliriously happy with their computers. But as with everything else, make sure it is in service of, and not distracting from, getting visitors to take action.
20. As social creatures, humans tend to place greater value on things that other people have already approved. That is why most sites will tend to display evidence of such social validation:
A list of customers
Press mentions
Usage statistics
Testimonials
21. Landing pages look just like any other website but they operate a bit differently. In the online marketing industry, landing pages are used to promote a specific action – downloading a program, subscribing to a newsletter, purchasing a product, etc. As opposed to a full-blown website, a landing page is a single page with a highly specific target: getting visitors to complete an action.
22. In terms of content, the landing page has one simple message to convey. It promotes the desired action and sticks to explaining the benefits of performing this action.
23. The design of the page needs to focus on support this objective and not anything else. This also means that the design shouldn’t be “too pretty” as to not compete over the viewers’ attention.
24. Headlines, subtitles, buttons and images need to represent the page’s message in a powerful and effective way.
25. One of the greatest advantages of of landing pages is that they are relatively easy to make. This means you can actually create more than one landing page and test the performance of more than one design. Testing landing pages is a crucial technique in professional online marketing. It can teach you a lot about your target market and help you focus your messaging in the future.
26.
4 Questions:
1. What exactly is being offered? - You should answer the question "What's in it for me if I give you my information?"
2. What are the benefits of the offer? - You should explain why the viewer just can't live without it.
3. Why does the viewer need the offer NOW? - You should create a sense of urgency around your offer.
4. How does the user get the offer? - The page should make it easy for the lead to convert.
Promoting Landing Pages:
1. Creating a PPC ad campaign on search engines and linking to the landing page.
2. Posting the link on social networks like Facebook or Twitter (with or without paying for an ad campaign).
3. Sending the landing page as an email campaign to subscribers. Adding the link to the content of a blog post.
4. Tweaking SEO settings so that your landing page can be found by organic (not-paid) search.
1. A landing page is a web page that allows you to capture a visitor's information through a lead form.
2. Whether you’re building a landing page for a new lead or an existing lead or customer, the end goal is the same: to capture your lead’s interest in something you have to offer, and then use this opportunity to nurture them further down the marketing funnel towards the next sale.
3. A landing page is the page a visitor arrives at on your website after clicking an ad (for example, a Google text ad or display ad). Inexperienced marketers often direct all of their PPC traffic to their homepage, but this can be a big mistake. Specific landing pages tailored to different offers are essential for providing a quality experience for visitors and driving conversions with a targeted message that matches each user’s need.
4. And what are their hopes, dreams, and aspirations? As silly as that sounds, it’s true to some degree – the better you understand your audience, the more you can cater to their wants and needs. Unless you know who your ideal customers are, it will be very difficult to write persuasive copy in the voice of the customer. So get in your audience’s head, Hannibal Lecter-style.
5. Businesses with more landing pages (30+) generate 7x more leads than those with only a handful, so there’s no denying their value. Ideally you want a tailored landing page for each ad group, but that’s a pretty hefty operation, so start where you can. Try beginning with one custom landing page per campaign, and add from there for individual ad groups when resources allow.
6. A landing page should offer all the necessary information, but not so much as to overwhelm (and as a result, drive away) the visitor. Provide the essential info that will interest your audience and nothing more.
7. The whole point of having landing pages, of course, is to get leads through PPC. Landing Pages & Leads helps ensure that you’re in a position both to get more leads and to understand why and how you got them! Here you can check your conversion rates and dig in for more lead intelligence:
8. You don’t want people to just visit your page. You want them to take action once they are there. So make it as easy and compelling as possible for them by including these elements found in a landing page that CONVERTS:
9. Don’t distract them with lots of other requests. The best pages accentuate only one CTA.
10. Research has shown that the more choices you offer people, the longer they take to make a decision.
11. Study after study has shown that more fields = lower response, so ask your visitors for the bare minimum.
12. In Salesforce, There’s no navigation bar up top, the few administrative links are tucked away at the bottom, and social links are small and discreetly grayed out. The form asks for just a few fields and follows up with a nice, bright, benefit-offering CTA.
14. It’s generally believed that you should describe what you’re selling from the customer’s viewpoint. In other words, explain what problems your product or service can help solve. That may be true for your site, or it may not; this is a rich area for testing
15. So when you’re writing your headline, go for clear and explanatory over coy and clever.
16. Keep the most essential parts of your message – logo, headline, call to action, a supporting visual – in the center top of the screen, with supporting messaging lower down on the page.
17. Aah, it’s all there – good headline, bright CTA, social proof, and some VIA. Even on a smaller screen, the most important elements will be visible.
18. As with the headline, distracting elements can work when you’re trying to get attention. But when people are on your site, you don’t want to sidetrack them with a bunch of visual junk.
19. It’s tempting to add dramatic swirls, jQuery sliders, exploding graphs, and stock photos of people looking deliriously happy with their computers. But as with everything else, make sure it is in service of, and not distracting from, getting visitors to take action.
20. As social creatures, humans tend to place greater value on things that other people have already approved. That is why most sites will tend to display evidence of such social validation:
A list of customers
Press mentions
Usage statistics
Testimonials
21. Landing pages look just like any other website but they operate a bit differently. In the online marketing industry, landing pages are used to promote a specific action – downloading a program, subscribing to a newsletter, purchasing a product, etc. As opposed to a full-blown website, a landing page is a single page with a highly specific target: getting visitors to complete an action.
22. In terms of content, the landing page has one simple message to convey. It promotes the desired action and sticks to explaining the benefits of performing this action.
23. The design of the page needs to focus on support this objective and not anything else. This also means that the design shouldn’t be “too pretty” as to not compete over the viewers’ attention.
24. Headlines, subtitles, buttons and images need to represent the page’s message in a powerful and effective way.
25. One of the greatest advantages of of landing pages is that they are relatively easy to make. This means you can actually create more than one landing page and test the performance of more than one design. Testing landing pages is a crucial technique in professional online marketing. It can teach you a lot about your target market and help you focus your messaging in the future.
26.
4 Questions:
1. What exactly is being offered? - You should answer the question "What's in it for me if I give you my information?"
2. What are the benefits of the offer? - You should explain why the viewer just can't live without it.
3. Why does the viewer need the offer NOW? - You should create a sense of urgency around your offer.
4. How does the user get the offer? - The page should make it easy for the lead to convert.
Promoting Landing Pages:
1. Creating a PPC ad campaign on search engines and linking to the landing page.
2. Posting the link on social networks like Facebook or Twitter (with or without paying for an ad campaign).
3. Sending the landing page as an email campaign to subscribers. Adding the link to the content of a blog post.
4. Tweaking SEO settings so that your landing page can be found by organic (not-paid) search.
How to pitch
Knowledge Sharing:
1. the classic elevator pitch. It's a challenge every entrepreneur, marketer, and sales person must meet, and yet most do it poorly. The concept is simple: communicate what you do in the time it takes to ride an elevator from ground level until the door opens and you have to leave
2. Everyone needs a simple and compelling way to explain what they do. It's the key to successfully prospecting networking events, chance meetings and parties for new business.
3. A powerful elevator pitch, however, communicates a compelling value proposition that attracts customers predisposed to buy. It can help you efficiently weed through a large group, stopping only for meaningful conversations with real potential customers.
4. Create a specific pain statement for the customers you want. You really only want to talk to people who are willing to pay for the problem you solve. Otherwise you are wasting your time and effort.
5. The purpose of your pitch is to sell, not to teach. Your job is to excite, not to educate.
6. Pitching is about understanding what your customer (the investor) is most interested in, and developing a dialog that enables you to connect with the head, the heart, and the gut of the investor
7. What the investor is really thinking is, “Is this company the best next investment for me and my fund?” That is a much more complex question, but that is what the entrepreneur has to answer.
8. But don’t take any template as graven in stone. Your story may require a moderate or even a dramatic variation on the list of slides below. You may need to explain the solution before you can explain the market; or if you are in a crowded space you may need to explain why you are different than everyone else early on in the conversation; or you may want to drop some very impressive brand-name customers before you explain your product or your market. The one thing you may not do is expand the number of slides to 20 (or 30 or 50)! Other than that, let the specifics of your situation dictate the flow of your slides.
9. Everyone in the room should know the basic idea and value proposition of the company, including the target market, before the next slide is shown
10. Key objective: Investors should be confident that there is a good credible core group of talent that believe in the company and can execute the next set of milestones. One of those milestones may be filling out the team, and so it is important to convey that the initial team knows how to attract great talent, as well as having great domain skills. If there is a gap in the team, address it explicitly, before investors have to ask about it.
11. Just because you have really cool technology does not mean you will win. You need to convince the investor that lots of folks will buy your product or service, even though they have several alternatives. And don’t forget that the toughest competitor is often the status quo—most prospective customers can muddle on without buying your solution or your competitor’s solution.
Elevator Pitch Example
You know how growing companies with revenue over $5,000,000 struggle with getting sales people to say the same thing, let alone the right thing? Often they grow on the sales ability of the entrepreneur, never putting efficient marketing systems in place; then they hit a plateau and can't scale.
Wouldn't it be great if there were a company that could design and implement comprehensive marketing that makes your sales process efficient and lets your salespeople close more deals?
My company uses proven project management and storytelling techniques honed from our background in theater. Additionally we use proprietary processes outlined in my #1 bestselling marketing books and my national column on Inc.
Perhaps I could send you a link to my column or a couple of chapters from my books?
Steps:
Step 1--Connect with Empathy
Step 2--Offer an Objective Solution
Step 3--Provide Differentiation
One Sentence Pitch:
How to perfect one sentence elevator pitch
http://timberry.bplans.com/2012/04/video-example-of-a-great-elevator-pitch.html
How to write Elevator Pitch
To win over the hearts and minds of investors, your pitch has to accomplish three
things:
1. Tell a good, clear, easy-to-repeat story—the story of an exciting new startup.
2. Position your company as a perfect fit with other investments the investors have made and their firm is chartered to make.
3. Beat out the other new investments the firm is currently considering.
1. the classic elevator pitch. It's a challenge every entrepreneur, marketer, and sales person must meet, and yet most do it poorly. The concept is simple: communicate what you do in the time it takes to ride an elevator from ground level until the door opens and you have to leave
2. Everyone needs a simple and compelling way to explain what they do. It's the key to successfully prospecting networking events, chance meetings and parties for new business.
3. A powerful elevator pitch, however, communicates a compelling value proposition that attracts customers predisposed to buy. It can help you efficiently weed through a large group, stopping only for meaningful conversations with real potential customers.
4. Create a specific pain statement for the customers you want. You really only want to talk to people who are willing to pay for the problem you solve. Otherwise you are wasting your time and effort.
5. The purpose of your pitch is to sell, not to teach. Your job is to excite, not to educate.
6. Pitching is about understanding what your customer (the investor) is most interested in, and developing a dialog that enables you to connect with the head, the heart, and the gut of the investor
7. What the investor is really thinking is, “Is this company the best next investment for me and my fund?” That is a much more complex question, but that is what the entrepreneur has to answer.
8. But don’t take any template as graven in stone. Your story may require a moderate or even a dramatic variation on the list of slides below. You may need to explain the solution before you can explain the market; or if you are in a crowded space you may need to explain why you are different than everyone else early on in the conversation; or you may want to drop some very impressive brand-name customers before you explain your product or your market. The one thing you may not do is expand the number of slides to 20 (or 30 or 50)! Other than that, let the specifics of your situation dictate the flow of your slides.
9. Everyone in the room should know the basic idea and value proposition of the company, including the target market, before the next slide is shown
10. Key objective: Investors should be confident that there is a good credible core group of talent that believe in the company and can execute the next set of milestones. One of those milestones may be filling out the team, and so it is important to convey that the initial team knows how to attract great talent, as well as having great domain skills. If there is a gap in the team, address it explicitly, before investors have to ask about it.
11. Just because you have really cool technology does not mean you will win. You need to convince the investor that lots of folks will buy your product or service, even though they have several alternatives. And don’t forget that the toughest competitor is often the status quo—most prospective customers can muddle on without buying your solution or your competitor’s solution.
12. The single most compelling slide in any pitch is a pipeline of customers and strategic partners that have already expressed some interest in your solution—if they haven’t already joined your beta program
14. Investors are not focused on the precision of your numbers; they’re focused on the coherence and integrity of your thought process.
15.
Elevator Pitch Example
You know how growing companies with revenue over $5,000,000 struggle with getting sales people to say the same thing, let alone the right thing? Often they grow on the sales ability of the entrepreneur, never putting efficient marketing systems in place; then they hit a plateau and can't scale.
Wouldn't it be great if there were a company that could design and implement comprehensive marketing that makes your sales process efficient and lets your salespeople close more deals?
My company uses proven project management and storytelling techniques honed from our background in theater. Additionally we use proprietary processes outlined in my #1 bestselling marketing books and my national column on Inc.
Perhaps I could send you a link to my column or a couple of chapters from my books?
Steps:
Step 1--Connect with Empathy
Step 2--Offer an Objective Solution
Step 3--Provide Differentiation
One Sentence Pitch:
How to perfect one sentence elevator pitch
http://timberry.bplans.com/2012/04/video-example-of-a-great-elevator-pitch.html
How to write Elevator Pitch
To win over the hearts and minds of investors, your pitch has to accomplish three
things:
1. Tell a good, clear, easy-to-repeat story—the story of an exciting new startup.
2. Position your company as a perfect fit with other investments the investors have made and their firm is chartered to make.
3. Beat out the other new investments the firm is currently considering.
Understand Spam
Knowledge Sharing:
1. The secret is not very obvious but it is repetition. The effect is not even in repetition itself but in repeating many times, huge number of times
2. Organizing such long-term advertising campaigns companies have to take into account the percentage of instances when a viewer misses the program, changes the channel, turns off the sound or switch off the TV. This percentage is huge and in order to get the desired result commercials must be shown not just very often but infinitely often and everywhere.
3. The goal of spam is to make you to consider its offer immediately so you either order the promoted product/service or at least visit the promoted web site.
4. To make all this happen not once or twice but regularly, i. e. to guarantee a steady flow of clients for the advertised company, it is necessary to send spam letters to millions of people and to keep on sending those letter as often as possible.
5. It would be no exaggeration to say that the work of a spammer is similar to that of a gold prospector - tons of sand are passing through his hands and he only gets some few grams of valuable gold. In fact, here is the main weakness of the whole idea of spam that has to be exploited in order to combat spam more effectively.
6. The same can be applied to spam. Creating or choosing a spam filter it is not necessary to try to achieve 100% guarantee of detecting any spam message and in fact this is simply impossible. It is enough to use a filter that is capable of reducing the number of spam messages received by e-mail users to such an extent that spamming advertising campaigns become inefficient and unprofitable. And then, after a while, spam will become unattractive as an advertising tool and will be used less and less often.
7.
References:
http://www.articles-about-spam.com/benefits-of-spam.shtml
1. The secret is not very obvious but it is repetition. The effect is not even in repetition itself but in repeating many times, huge number of times
2. Organizing such long-term advertising campaigns companies have to take into account the percentage of instances when a viewer misses the program, changes the channel, turns off the sound or switch off the TV. This percentage is huge and in order to get the desired result commercials must be shown not just very often but infinitely often and everywhere.
3. The goal of spam is to make you to consider its offer immediately so you either order the promoted product/service or at least visit the promoted web site.
4. To make all this happen not once or twice but regularly, i. e. to guarantee a steady flow of clients for the advertised company, it is necessary to send spam letters to millions of people and to keep on sending those letter as often as possible.
5. It would be no exaggeration to say that the work of a spammer is similar to that of a gold prospector - tons of sand are passing through his hands and he only gets some few grams of valuable gold. In fact, here is the main weakness of the whole idea of spam that has to be exploited in order to combat spam more effectively.
6. The same can be applied to spam. Creating or choosing a spam filter it is not necessary to try to achieve 100% guarantee of detecting any spam message and in fact this is simply impossible. It is enough to use a filter that is capable of reducing the number of spam messages received by e-mail users to such an extent that spamming advertising campaigns become inefficient and unprofitable. And then, after a while, spam will become unattractive as an advertising tool and will be used less and less often.
7.
References:
http://www.articles-about-spam.com/benefits-of-spam.shtml
How to choose good company name
Knowledge Sharing:
1. When "people are paying you to advertise your brand that's the ultimate in a good name."
2. According to Cecil, a powerful name must instantly communicate what customers should expect to feel.
3. The most important requirement of modern-day naming is to rise above the level of what the company makes and does, pushing past the product functionality or mere service offering and transcending into the realm of what the (intended) brand experience is like—or as—to the user
4. A typical naming assignment takes Cecil between two and three weeks, during which he delivers around 300 names. He begins by conducting an in-depth marketplace survey to examine opportunities for new brand archetypes. He then takes four to five hours to fully digest everything he has learned from his research, client conversations, and planning sessions.
5. During this first creative session, he generates approximately one name per minute. During the second creative session, he types up his notes in search of additional channels worth pursuing. Once he’s generated a full list of names, he sends the list to his client.
6. “The best way to come up with a great name often involves first coming up with a great number of bad names,” Cecil said. “You have to work through the first couple (hundred) obvious ideas before you get to the brilliant-but-not-obvious connections that are truly memorable and marketable.”
7. A name has value beyond basic branding, and the process is more complex than just choosing the one you like. Legal compliance and search engine compatibility must also be taken into consideration.
8. Before you even start ideating, prioritize the criteria you’ll use to evaluate the names. Naming is subjective, so try to quantify your bias,” he noted. “Answer this question as many times as you can, in order to capture everyone’s expectations: ‘I want a name that . . .
9. What's a winning business name? A business name that draws business in itself.
10. Business is an organization or economic system where goods and services are exchanged for one another or for money.
11. So choosing a business name such as “Crychalwellyn” is a bad idea. Unique is good but difficult spellings are a bad idea.
12. Many words have both denotation (literal meaning) and connotation (emotional meaning).
14. A word’s connotation can be positive, neutral or negative, depending on the emotional associations that people generally make. The classic example is the difference between “Mom” (which has a very positive connotation) and “Mother” (which has a neutral connotation). Now you know why they called them “Dad’s” cookies, rather than “Father’s”!
Considerations:
1. Branding
2. Legal Compliance
3. Search Engine Compatibility
1. When "people are paying you to advertise your brand that's the ultimate in a good name."
2. According to Cecil, a powerful name must instantly communicate what customers should expect to feel.
3. The most important requirement of modern-day naming is to rise above the level of what the company makes and does, pushing past the product functionality or mere service offering and transcending into the realm of what the (intended) brand experience is like—or as—to the user
4. A typical naming assignment takes Cecil between two and three weeks, during which he delivers around 300 names. He begins by conducting an in-depth marketplace survey to examine opportunities for new brand archetypes. He then takes four to five hours to fully digest everything he has learned from his research, client conversations, and planning sessions.
5. During this first creative session, he generates approximately one name per minute. During the second creative session, he types up his notes in search of additional channels worth pursuing. Once he’s generated a full list of names, he sends the list to his client.
6. “The best way to come up with a great name often involves first coming up with a great number of bad names,” Cecil said. “You have to work through the first couple (hundred) obvious ideas before you get to the brilliant-but-not-obvious connections that are truly memorable and marketable.”
7. A name has value beyond basic branding, and the process is more complex than just choosing the one you like. Legal compliance and search engine compatibility must also be taken into consideration.
8. Before you even start ideating, prioritize the criteria you’ll use to evaluate the names. Naming is subjective, so try to quantify your bias,” he noted. “Answer this question as many times as you can, in order to capture everyone’s expectations: ‘I want a name that . . .
9. What's a winning business name? A business name that draws business in itself.
10. Business is an organization or economic system where goods and services are exchanged for one another or for money.
11. So choosing a business name such as “Crychalwellyn” is a bad idea. Unique is good but difficult spellings are a bad idea.
12. Many words have both denotation (literal meaning) and connotation (emotional meaning).
14. A word’s connotation can be positive, neutral or negative, depending on the emotional associations that people generally make. The classic example is the difference between “Mom” (which has a very positive connotation) and “Mother” (which has a neutral connotation). Now you know why they called them “Dad’s” cookies, rather than “Father’s”!
15. You want a business name that conveys strength and reliability. A choice such as “Stone Creek Trucking” would be much better. Notice how all these names have a strong visual element.
16. So you need to be sure that your new business name at least gives your potential customers or clients some clues about what you actually do. That’s why you see so many landscaping businesses that have the word “landscaping” in their name, and hair styling businesses that include words such as “salon” or even “hair designs” in their names.
17. Including information about what your business does in your business name also makes it easier for potential customers and/or clients to find your business in phone books and directories (both off and online).
18. Swap is natural, not a god name.
19. Color symbolism is the use of color to represent traditional, cultural, or religious ideas, concepts, or feelings or to evoke physical reactions.
20. Colors are more than a combination of red and blue or yellow and black. They are non-verbal communication. They have meaning that goes beyond ink.
21.
Considerations:
1. Branding
2. Legal Compliance
3. Search Engine Compatibility
Understand Innovation
Knowledge Sharing:
1. In its purest sense, “invention“ can be defined as the creation of a product or introduction of a process for the first time. “Innovation,” on the other hand, occurs if someone improves on or makes a significant contribution to an existing product, process or service.
2. What made the iPod and the music ecosystem it engendered innovative wasn’t that it was the first portable music device. It wasn’t that it was the first MP3 player. And it wasn’t that it was the first company to make thousands of songs immediately available to millions of users. What made Apple innovative was that it combined all of these elements — design, ergonomics and ease of use — in a single device, and then tied it directly into a platform that effortlessly kept that device updated with music.
3. the key to ensuring that innovation is successful is aligning your idea with the strategic objectives and business models of your organization.
4. smart innovators frame their ideas to stress the ways in which a new concept is compatible with the existing market landscape, and their company’s place in that marketplace.
5. But an idea that requires too much change in an organization, or too much disruption to the marketplace, may never see the light of day.
6. If invention is a pebble tossed in the pond, innovation is the rippling effect that pebble causes. Someone has to toss the pebble. That’s the inventor. Someone has to recognize the ripple will eventually become a wave. That’s the entrepreneur.
7. Entrepreneurs don’t stop at the water’s edge. They watch the ripples and spot the next big wave before it happens. And it’s the act of anticipating and riding that “next big wave” that drives the innovative nature in every entrepreneur.
8. In today’s global economy, there is a constant drumbeat to come up with something “new.” But you don’t need to invent something entirely new to be successful. Invention is wonderful, but you can be very successful if you focus on innovating on something that already exists rather than inventing something entirely new.
9. Japan didn’t invent the car or the TV, but it certainly innovated on them and built world-leading companies and economies.
10. Whereas innovation may be defined as “change that adds value”, invention may be perhaps best defined as something “new, novel and without precedent”.
11. whereas novelty is an essential part of an invention, novelty is not an essential part of an innovation.
12.
Innovation was the product of new combinations, and he proposed five combination patterns:
1) the production of a new good;
2) the introduction of a new method of production;
3) the development of a new market;
4) the acquisition of a new source of supply of raw materials; and
5) the emergence of a new organization of any industry.
1. In its purest sense, “invention“ can be defined as the creation of a product or introduction of a process for the first time. “Innovation,” on the other hand, occurs if someone improves on or makes a significant contribution to an existing product, process or service.
2. What made the iPod and the music ecosystem it engendered innovative wasn’t that it was the first portable music device. It wasn’t that it was the first MP3 player. And it wasn’t that it was the first company to make thousands of songs immediately available to millions of users. What made Apple innovative was that it combined all of these elements — design, ergonomics and ease of use — in a single device, and then tied it directly into a platform that effortlessly kept that device updated with music.
3. the key to ensuring that innovation is successful is aligning your idea with the strategic objectives and business models of your organization.
4. smart innovators frame their ideas to stress the ways in which a new concept is compatible with the existing market landscape, and their company’s place in that marketplace.
5. But an idea that requires too much change in an organization, or too much disruption to the marketplace, may never see the light of day.
6. If invention is a pebble tossed in the pond, innovation is the rippling effect that pebble causes. Someone has to toss the pebble. That’s the inventor. Someone has to recognize the ripple will eventually become a wave. That’s the entrepreneur.
7. Entrepreneurs don’t stop at the water’s edge. They watch the ripples and spot the next big wave before it happens. And it’s the act of anticipating and riding that “next big wave” that drives the innovative nature in every entrepreneur.
8. In today’s global economy, there is a constant drumbeat to come up with something “new.” But you don’t need to invent something entirely new to be successful. Invention is wonderful, but you can be very successful if you focus on innovating on something that already exists rather than inventing something entirely new.
9. Japan didn’t invent the car or the TV, but it certainly innovated on them and built world-leading companies and economies.
10. Whereas innovation may be defined as “change that adds value”, invention may be perhaps best defined as something “new, novel and without precedent”.
11. whereas novelty is an essential part of an invention, novelty is not an essential part of an innovation.
12.
Innovation was the product of new combinations, and he proposed five combination patterns:
1) the production of a new good;
2) the introduction of a new method of production;
3) the development of a new market;
4) the acquisition of a new source of supply of raw materials; and
5) the emergence of a new organization of any industry.
How to issue stocks
Knowledge Sharing:
1. Like other legal framework questions in starting a company, one of the tricks is to build a legal structure which is ready to accommodate growth. As your company grows, if you have the right legal structure in place, you will have less legal work that you have to do along the way to keep up with the growth. (For example, authorize enough shares so that you don’t have to amend your charter later on to authorize more. Authorize blank check preferred so that you don’t have to amend your charter to close your first preferred stock financing, etc.)
2. Every startup entrepreneur is busy—really busy. There are business plans to write, projections to prepare, and products to design. In their earnest desire to get ahead, it’s easy to overlook the very issues that can slow down any fast-moving company.
3. A new corporation is formed when a Certificate of Incorporation in Delaware (or Articles of Incorporation in California and most other states) are filed with the Secretary of State
4. The authorized number of shares that goes in the Certificate of Incorporation is the number of shares that the Board of Directors may issue without amending the Certificate of Incorporation. By contrast to authorized shares, issued shares are shares that have actually been sold and are outstanding.
1. Like other legal framework questions in starting a company, one of the tricks is to build a legal structure which is ready to accommodate growth. As your company grows, if you have the right legal structure in place, you will have less legal work that you have to do along the way to keep up with the growth. (For example, authorize enough shares so that you don’t have to amend your charter later on to authorize more. Authorize blank check preferred so that you don’t have to amend your charter to close your first preferred stock financing, etc.)
2. Every startup entrepreneur is busy—really busy. There are business plans to write, projections to prepare, and products to design. In their earnest desire to get ahead, it’s easy to overlook the very issues that can slow down any fast-moving company.
3. A new corporation is formed when a Certificate of Incorporation in Delaware (or Articles of Incorporation in California and most other states) are filed with the Secretary of State
4. The authorized number of shares that goes in the Certificate of Incorporation is the number of shares that the Board of Directors may issue without amending the Certificate of Incorporation. By contrast to authorized shares, issued shares are shares that have actually been sold and are outstanding.
5. Amending the Certificate of Incorporation to increase the authorized number of shares requires a vote of the stockholders of the corporation. It also requires a state filing and associated fees. This is somewhat tedious. When thinking about the number of shares that you need to authorize, plan so that number of shares initially authorized is sufficient for your purposes for the foreseeable future, until a significant event in the life of the corporation, such as a financing, for example, when you will go through the trouble of amending the Certificate of Incorporation.
6. This is because a stockholder's share in a company is calculated as such stockholder's shares divided by the sum of all issued and outstanding shares of the company and the shares reserved under the company's stock plan. Note that a stockholder's share is not based on the company's authorized shares. Therefore, if a significant cushion exists, an investor's share can be easily diluted by the company issuing shares from the pool of authorized shares, without seeking the investor's consent.
7. For my startup clients, I typically recommend that 10,000,000 shares of Common Stock be initially authorized. There is no magic to this number, but it tends to result in a Series A price per share that is of a familiar/standard magnitude.
8. Typically, at a Series A stage, a startup is going to be valued between $2M and $12MM, broadly speaking. At the time of investment, the Series A price will be calculated as pre-money valuation divided by the total number of then issued and outstanding shares, plus the shares reserved under the company's stock plan (including an increase to the stock plan reserve for the Series A round). Simplistically, a $10MM pre-money valuation, divided by $10MM shares (which include shares already issued to the founding team and the unissued shares reserved under the stock plan), equals a Series A price of $1.00. Individual numbers will vary of course, but it makes it easy and convenient to stick to conventions, so that the Series A price per share isn't 1/100 of a dollar nor hundreds of dollars.
9. A typical startup uses the "assumed par value capital" method to calculate its Delaware franchise tax liability. The minimum tax that may be owed under the assumed par value capital method of calculation is $350.00
10. Total Gross Assets (as reported on the U.S. Form 1120, Schedule L) X (Authorized Shares / Issued Shares) X $0.00035.
11. A typical reserve, even without a formal stock plan, is 10-30% depending on the company's hiring plans. So, in our typical scenario, the founder or the founders would be issued, in the aggregate between 7M and 9M shares of Common Stock, with 1M to 3M authorized and unissued shares remaining available for future issuance.
12. Note that the share reserve needs to be sufficient for the company's hiring needs until the next time that the Certificate of Incorporation is amended, and as we've said before, a natural time for the Certificate of Incorporation to be amended is in connection with an equity financing.
14. If the issuance serves to increase the value of the company, your smaller piece of the pie might in fact have a higher value than the bigger piece of the smaller pie that you had before.
15. The example above demonstrates that what you should watch out for is not securities issuances which dilute your percentage interest, but securities issuances that decrease your total value. The latter are the instances where equity is being issued without a corresponding increase in the value of the company. Examples of those might be (a) warrants with a low exercise price that are issued as part of a loan transaction, (b) shares issued to investors at a discount or a price lower than the company's last valuation, or (c) shares issued to employees.
16. As disappointing as this may be for founders and other holders of common stock to hear, really the only equity holders who ever get antidilution protection are the investors (holders of preferred stock).
17. It may not seem fair to someone who has earned his sweat equity with... well, sweat and hard work. But investors are the ones that pay the full market price for their shares (usually 3x or more the price of Common Stock), and they are the ones who are more typically able to successfully negotiate some protection for themselves.
18. However, they will get an adjustment (the conversion rate at which they Preferred Stock converts into Common Stock will increase, such that the same number of Preferred shares will be convertible into more shares of Common Stock) for issuances made at a price below their entry point, with certain exceptions. The list of exceptions to investors' antidilution protection is frequently the subject to heavy negotiation between company and investors' counsel.
19. Founders Stock Refers to Common Stock Issued to Founders with Certain Characteristics; Namely, Founders Stock is Normally Issued at Par Value with a Vesting Schedule.
20. The term “founder” and “founders stock” are not legal terms, rather, they are terms of art describing a certain class of early participants of a company and their ownership interests. You will not find the terms “founder” or “founders stock” defined in the corporations code.
21. “Founders” of companies fall into the class of initial stockholder (certainly), director (probably) and officer (probably). The founders put together the initial plan; they are the people who decide to make the leap from idea to project to forming a new corporation, and that is when they receive “founders stock”. Companies that do not exist cannot issue founders stock.
22. Founders stock means the shares of common stock stock that are issued in the organizational minutes or consent of the board of directors of the company when they are setting up the new business, adopting bylaws and appointing officers. This is called “organizing” the corporation. The people who get this initial stock are the “founders” as a general rule.
23. It’s important to look at the characteristics of “founders stock” as well. It will generally be a large percentage of stock to each individual founder (larger than they would ever receive joining a more mature company). The founders stock is normally issued at a nominal price, often times the par value of the stock, such as $0.001 per share, a very low number. The company can issue founders stock at a low price because it hasn’t started to do any business yet, and so the new corporation is essentially worthless. The equity upside of owning the founders stock is likely to be the only initial compensation for the founder, and, if the company does it right, the founders stock is subject to vesting contingent upon the continued provision of services to the company (stock issued subject to a vesting schedule is called “restricted stock”. The company buys back unvested founders stock at cost if a founder’s service to the company is terminated for any reason).
24. After incorporation new team members can get stock with these characteristics and are sometimes called “founders”, but issuing stock at a very low price after the company has done anything to build value (built a prototype, gotten some users or customers, first revenue) can lead to income taxes for the founder getting “cheap stock.” Because of this, after incorporation companies normally increase the stock price, close the class of “founders stock” and issue options instead going forward.
25. Vesting of shares and stock options is the preferred method of providing incentive to build a team and keep it motivated. It is also the method for protecting the company and the other stockholders when someone quits or is fired and produces better results than a buy/sell agreement.
26. If the shares issued to a stockholder will have vesting provisions, the stock is called “restricted stock”, meaning stock issued with a vesting schedule.
27. Vesting is very important to protect the initial stockholders of the corporation, called the “founders”, from each other.
28. When a stockholder quits working for a startup company and takes a large chunk of equity with him or her, it can be very demoralizing for the remaining stockholders who continue to work for the corporation in order to build stockholder equity. Vesting is the mechanism that guards against that happening.
29. Vesting is preferred over a traditional “Buy/Sell Agreement” for startup companies. In a typical Buy/Sell Agreement, if a founder stops providing services to the company, the corporation and/or other stockholders have a right to buy out the departing stockholder at a purchase price equal to the fair market value of the departing stockholder’s stock.
30. A vesting “cliff” means that there is a period of time of no vesting, but when the specified time (the “cliff”) is hit, the benefit becomes fully vested. For example, in a 48 month vesting schedule with a 12 month “cliff”, no vesting occurs for the first 12 months, but at the 12-month point the stockholder receives full credit for 12 months of vesting. After the “cliff” is met, vesting would continue thereafter on a monthly basis. A “cliff” is often used with new employees. It acts as a probationary period during which the new employee has to prove himself or herself.
31. The vesting provisions in our Restricted Stock Purchase Agreement contains a clause that all unvested shares will vest in full on an accelerated basis upon a sale of the corporation. This agreement is intended to be used for founders of startup companies and is also included in our Incorporation Premium Legal Documents Package for as many founders that will be issued restricted stock.
32. Par Value is an anachronistic concept from corporate law, but it’s still there to cause headaches
33. Par value is the minimum issue price for a share of stock. It is always best to use a low par value, even though no par value stock is allowed. The selection of par value will oftentimes be based on how much the founders plan to invest to initially capitalize the corporation.
34. For a pure startup that has yet to do any business, the shares are essentially worthless and so are are most often issued at par value. A par value quite often used is $0.001 per share.
35. No par value stock, while allowed, is a trap for the unwary: it can likely lead to much higher Delaware franchise taxes because companies with no par value stock will be taxed automatically using the Delaware Authorized Shares Method. If the corporation authorizes 10,000,000 shares, the tax using the Authorized Shares method would be in excess of $50,000-an absurd number.
36. Delaware Authorized Shares Method vs Delaware Assumed Par Value Capital Method
37. Using the Delaware Assumed Par Value Capital Method, the minimum annual Delaware franchise tax will be $350.
38. “Authorized but unissued shares” are shares that are authorized but not issued. In the example just given, a company with 10 million shares authorized, but only 2 million shares issued, the “authorized but unissued shares” would be 8 million
39. Why would you authorize more than you might issue? Because you want head room. You want the shares available in case you need to issue them.
40. Don’t be afraid to have headroom for future growth.
41. The corporation shall be designed for scalability, etc.
42.
References:
http://startupvoice.blogspot.com/2013/06/getting-to-reasonable-cap-table-how.html
http://startupvoice.blogspot.com/search/label/dilution
http://blog.venturedocs.com/2013/05/what-is-founders-stock-legally/
http://blog.venturedocs.com/2013/02/par-value-a-trap-for-the-unwary/
How to select right advisors
Knowledge Sharing:
1. Smart founders want the support of high-profile advisors who can offer PR, connections, capital, and clout. However, the process of choosing the right advisor requires a strategic look at a mix of factors.
2. I’m fortunate to work with great founders who clearly knew what they needed from me and how our relationship would work. Perhaps more importantly, those founders took the time to do their homework on me and understand what I could bring to the table. Our conversations were productive as a result.
3. But I’ve also been approached by startups in verticals that are completely out of my area of expertise. On top of that, their verticals were those I had no interest in learning about. In these cases, I try to offer constructive feedback as best I can and make a targeted introduction if I feel the startup is at the right place for it.
4. Be sure that your prospective advisor cares about both the industry you’re in and the specific problem you’re attempting to solve.
5. In many cases, the advisors' questions come from a place of wanting to be ethical about accepting equity rather than wanting to scare you away.
What advisors can do:
1. it’s a targeted introduction or advice on user acquisition
2.
Here are some types of advisors to focus on:
A solid product manager in your niche
Someone with lots of proven online marketing and user acquisition experience
A well-connected PR person -- especially old-school offline PR
A finance person with tons of corporate development experience
Here's why these types of people are super beneficial to you:
The product manager knows how to build things that solve the correct problem.
An online marketer knows how to bring people to your solution.
A PR person can create great synergy by connecting you to brands they work with that have way more traction than you. Osmosis.
Finance corporate development person -- a money person who knows investors
References:
http://www.socalcto.com/2014/05/what-startup-advisors-do-i-need.html
http://www.forbes.com/sites/davidroth/2012/08/22/the-abcs-of-vc-funding-and-building-your-board/
http://readwrite.com/2014/08/04/startup-tips-board-advisors-yec
http://99u.com/articles/7013/finding-and-keeping-the-right-advisors-for-your-business
1. Smart founders want the support of high-profile advisors who can offer PR, connections, capital, and clout. However, the process of choosing the right advisor requires a strategic look at a mix of factors.
2. I’m fortunate to work with great founders who clearly knew what they needed from me and how our relationship would work. Perhaps more importantly, those founders took the time to do their homework on me and understand what I could bring to the table. Our conversations were productive as a result.
3. But I’ve also been approached by startups in verticals that are completely out of my area of expertise. On top of that, their verticals were those I had no interest in learning about. In these cases, I try to offer constructive feedback as best I can and make a targeted introduction if I feel the startup is at the right place for it.
4. Be sure that your prospective advisor cares about both the industry you’re in and the specific problem you’re attempting to solve.
5. In many cases, the advisors' questions come from a place of wanting to be ethical about accepting equity rather than wanting to scare you away.
6. Nothing spoils an otherwise good partnership faster than misaligned expectations.
7. While many advisors join startups because they genuinely want to help, many also have ulterior motives. The more intelligent questions you ask to assess this, the easier time you’ll have down the road.
8. Board advisors can be an essential asset for any budding startup
9. There are advisors who are recruited to provide the startup with technology guidance or product or solution input, and advisors who are recruited to provide the startup with market strategy or introductions to customers in a particular market segment of interest.
10. An advisor is typically expected to spend just a few hours per year with a startup (typically 20-40 hours per year).
11. Therefore, during the recruitment process you will need to determine how much time the advisor is able and willing to offer to your company and whether this time would be sufficient for what you are trying to achieve with the particular advisor.
12. In order to deal with the advisor’s time limitations and to benefit from different points of view, it is important to recruit several advisors of each type.
14. startups oftentimes recruit retired executives or individuals who are no longer in active executive roles as advisors.
15. Early stage technology-driven startups initially recruit technical advisors, followed by advisors from companies that are customers or can be customers of their solution.
16. A company can have more than one advisory board. Early stage technology-driven startups initially recruit technical advisors, followed by advisors from companies that are customers or can be customers of their solution. While such startups typically form a single advisory board, in most cases the company’s executives meet with each advisor individually. As the startup grows and more advisors of each type are recruited, one-on-one meetings are supplemented with group meetings where all advisors participate. The startup’s CEO typically leads the advisory board. In later stage companies, the advisory board often breaks up into function-specific advisory boards. Company executives lead these function-specific boards. For instance, the VP Products would lead the customer advisory board, the CTO would lead the technical advisory board, and so forth. Not every private company has more than one advisory board, but don’t think that you need to “fit” all the advisors into a single group.
17. Finally, startups compensate advisors through options.
18. The best kind of advisor is the type of advisor who is interested in becoming part of your dedicated team at some point.
19. You will never find more of a selfless person at your startup beyond your advisor.
20. After bringing these people on, you still aren't going to have additional dollars in your startup's pocket, but you'll be well-on-your-way to a solid team that's dedicated to gaining your product traction, which is about 80 percent of what most early-stage investors look for in the first place.
21. You can’t afford and don’t want to hire a full-time CTO or architect. But, advisors, coaches, and mentors can often fill the bill. Getting someone who’s fully employed somewhere else to work with you on a limited basis to help close the gap is hugely important for the non-technical founder.
22. In many cases, you can get a couple coffee or beer meetings with advisors without ever formally engaging them as an advisor. For me, if I can help you within a couple hours Free Startup CTO Consulting Sessions, I’m happy to do that and I don’t expect compensation or equity for that.
23. If you present a mentor with an interesting startup challenge in a space where they have experience or expertise, the mentors are quite willing to spend a few hours to help the founder. And it’s way more fun when you have other interesting people in the room trying to also help
24. Formal relationships make sense once you get beyond the informal stage, and it’s clear that there’s on-going need.
25. advisory boards are an expensive equity proposition for merely introductions.
26. Yes, you want connected individuals, but you often find that there are a few introductions that come easily and once those are exhausted, the value drops rather fast.
27. Functional Advisors come in with expertise in a particular area where you may need a second set of eyes. This might be technology, marketing, sales, operations, international expansion, etc.
28. Through this he defined aspects like “deep dives into our marketing strategy” and “product feedback and product strategy.”
29. Through this he defined aspects like “deep dives into our marketing strategy” and “product feedback and product strategy.”
30. The first 90% of a project takes 90% of the time. The last 10% takes the other 90%
31. What's funny is that once software has been built and you move from Seed to A or B round, I often get calls by investors about reviewing the existing product to see if it has reasonable quality and if the team is going to be able to continue to produce going forward. Why a Seed level investor doesn't insist on a technical advisor, I don't know.
32. Bottom line - if you are an early-stage startup with online or mobile technology as part of your solution, you ABSOLUTELY NEED a technical advisor.
33. There is so much value-add to being advised by an experienced, proven leader in the space you plan to disrupt with your new, innovative product or service. I have launched quite a few startups and have found that doing my homework and working with a combination of the right investors and advisors is a secret ingredient to startup success.
34. Institutional investors can provide high-value advisors along with investment in your company.
35. Have the potential for aligning with an advisor in mind as you interact with business associates and at places like industry summits, conferences and meetings.
36. Just like all of us, advisors will be strong at some things, and not so strong at others. And if you’re engaged with a VC firm, understand that while the firm may have expertise in your area, not every advisor at the firm will have the appropriate expertise aligned for all the stages you and your startup will go through. You must stay vigilant and constantly aware of when it’s time to bring in someone new, or simply cut ties with the old.
37. Any advisor has signed on because he or she wants to see you succeed – believing the world will be a better place with your company and products in it. Some may offer up an advisory role for free, and others may want some sort of compensation or an alignment of stock options to certain results.
38. A type of democratized IT that previously only large firms could afford to build was inspired by an advisor that previously was an executive from Salesforce.com CRM +2.92%, and has been key to our success.
39. Business Development and Public Relations strategy have also flourished with guidance from advisors.
40. And finally, the availability of advisors with expertise in, and enthusiasm for, what you want to do is a good litmus test. If you’re unable to find these industry experts, or if you can find them but they shy from an advisory role with you, you may have a failing proposition on your hands. Such a situation would certainly give me pause. But when you do your homework and find the right ones, advisors can be a golden ticket for you and your startup.
41. The earlier you accept funding, the more expensive it will be in terms of what you may need to surrender in equity and possibly in terms of company decision making
42. If you take money too early and/or work with the wrong people, you can have a really dysfunctional board. However if you time your funding correctly and work with the right people, investors can play a key role in guiding your company to success.
43. I’ve seen early investors govern so much power over a start-up that the company couldn’t hire someone above a certain salary level or sign a lease on office space without approval.
44. In my experience the longer you can go as a starving entrepreneur with a lean team to build out your product, the better. Why? Because if you can stay lean long enough, then you’ll have in place some of the critical things I’ve discussed in my earlier blogs – focusing on the right stuff, developing products to fit market need, building your own culture, assembling the right team, etc. With these fundamentals in place, you’re in a far better position to have a positive relationship with an eventual investor.
45. So the key becomes: How to get to business viability as soon as possible while taking the least amount VC dollars and not giving up unreasonable control.
46. Bootstrapping in business means starting a business without external help or capital.
47. Startups can grow by reinvesting profits in its own growth if bootstrapping costs are low and return on investment is high. This financing approach allows owners to maintain control of their business, enables them to focus on customers instead of investors, and forces them to spend with discipline.
48. The entrepreneur has an idea of what they want, but no ability to do it themselves, so they go somewhere offshore and build a team and build out their product without spending a single dollar. I know a New York-area entrepreneur who did this – he had friends and family in India to make it happen and they were willing to let him use their hardware, data center and head count for a certain period of time for a minority stake in the company.
49. The biggest strength of any board and investors is ensuring that you have people actively working on behalf of the company between board meetings.
50. In the early days of the rudimentary challenges of building your business, the people on your board should be readily accessible. As you grow, you’ll want to have board members located farther away, but in the early days there is so much interaction it’s very positive to have investors and board members down the block.
51. Here’s a test to see if you’re working with the right investors and board members: Think about a dark moment, a big challenge – how comfortable do you feel reaching out at any time for help and advice? Or if your phone rings at 11 pm and caller ID tells you it’s this person, what is your reaction? Is it panic? Does the hair on the back of your neck stand up? Not a good sign. If your reaction is ‘wow they’re working late – they must really need to talk about something important’ – that’s much better
52. But the ability to work well with the individual who will be on your board is more important than working with a big-name firm.
53. I’ve seen start-up founders frustrated with board member discussions because the VC is focused on retail/consumer and the start-up is a B-to-B. Fundamental and obvious, but I see it happen time and time again. As an entrepreneur you need to know these people very well and many entrepreneurs don’t think this through.
54. The foundation of your relationship with every board member should be ‘what can you do to help our company succeed? What can we do together to divide and conquer to make a difference?’ Instead of wielding weapons to ward off the management team, board members should be an extension of the company with expertise and insight to share the right information with the right people. And any hoops that the management team is jumping through should be for the good of everybody: To delight customers. To give employees a great place to work. To deliver a product that makes your customers’ lives easier and better which will be the best path to driving up all investors value.
55. No matter how ambitious or talented, we all have our blindspots – certain obstacles or hard realities that we fail to anticipate. Which is why we all need some sound advice from time to time. To get it, we must engage the right Advisors along the way.
56. It is extremely difficult to find the right advisers for your business. You need to make sure they have a strong work ethic, sufficient spare time to commit to the company and that they can provide solid advice and resources to your business.
57. Instead of giving advisers all of their shares at once, consider having their equity vest over time so you have a fair solution if these factors do not line up, which is often the case.
58. I would get a large board of advisers at low equity cuts (between a quarter and a tenth of a percent) so that you can really create a huge list of people that can help you with your initial launch. The more advisers you get the easier it will be to get more, and the more you have for your launch the bigger your splash will be.
59. Most people will informally advise you. Have as many of those kinds of advisors as you like. For your actual board of advisors you should be a lot more selective.
60. They get small portions of equity, so they should really know what they're talking about and really help you with the business. They should have experience in startups or your field. They should be somewhat noteworthy, have an exit, experience or strong personal brand. Plan on three to five people. The spots should be coveted.
61. Anyone can give you advice, but counsel is a very specific type of advice that comes from people who have vast knowledge or experience in the area of your business.
62. You should always try to surround yourself with people who have more experience or are more knowledgeable than you are. You do not have to be an expert in every area of your business, but you should put together a council of people who are the most knowledgeable about every critical area of your venture. It’s your job to know what those areas are.
63. I would advise an entrepreneur preparing to put his/her board of advisers or board of directors together for the first time that there is potentially no more important task than this in the early phase of starting a company. An advisory board lends credibility, industry expertise and a wide range of introductions and advice that can be crucial to one’s early days as an entrepreneur.
64. A dear friend of mine, venture capitalist Emily Melton, advised me early on that “if you want to build a Fortune 500 company, start with a Fortune 500 board.” I took that advice to heart and always went after dream advisers in the wine/ beverage/technology/media industries.
65. Your advisers should be people that you’re truly excited to listen to. Don’t put people on your list who you wouldn't be excited to chat with for 20 minutes.
66. That said, advisory boards are not as practical as you would think. While you will certainly benefit from your advisers' feedback, a board is also an important way to build and maintain your network. Think about who has helped you in the past, who will be there in the future and who you want to bet on.
67. I know many companies that have given away cash or stock options to advisers too quickly, often before getting to know them well or understanding their commitment to the company. Don’t rush into it. Most advisers worth their weight will happily spend time with you and prove their value long before they ask for an official role or any kind of compensation.
68. Don't fill the room with a bunch of people who will think the same way. It will generate a crippling form of groupthink. Bring different perspectives to the table, because they'll offer a more comprehensive and effective solution. Get a good money guy, operations guy, marketing guy, etc. You'll be able to gain better insights that consider all areas of your business.
69. Don’t chase a title or a company. Instead, look for board members that are excited about your business and vet them based on their skills, experience and availability. This will help you build a passionate board that is committed to your success.
70. Furthermore, make sure your board members have some skin in the game and have made an investment in the company. This will prove to you that they believe in the company and the leadership, and that they will be willing to work hard to associate themselves with a winning business.
71. When building our advisory team, we drew our dream team of advisers on the whiteboard. We included specific, sometimes famous and out-of-our-reach people.
72. Once we completed this exercise, we were left with specific features, experiences and connections we were looking for in each seat. The rest was easy. We networked to meet people with those specific sets of features. Once you know specifically who you're after, people will help you find them.
73. Anyone worthy of being on your board of advisors will be an extremely busy business professional. Be respectful of their time and do your homework in preparing and structuring every interaction.
74. If you get the wrong board structure early on with the wrong kind of make-up, you’re going to spend more time having to justify yourself to the board versus getting their time to advise on the next step the company should take.
75. I found ways to integrate them into my daily process. I didn’t want to just get somebody’s name on a slide deck that I get to call once a month and some email exchanges here and there or to make introductions here and there — that’s a transactional advisor. And, I’m not a big fan of transactional interactions. I’m a huge fan of spending more time with a fewer number of people to build relationships.
76. You should treat your advisors as such, folks that you can lean on in a material way, both in the professional and personal worlds. I say personal because a lot of decisions have to be made inside of a startup that are not in any way about the business per se but are about the culture of the company, personnel decisions and things you normally wouldn’t think to call an advisor on. You need to understand that they wouldn’t be advisors if they hadn’t done some great things and solved a lot of hard challenges.
77. My one big piece of advice to anybody who wants to find great advisors is to find the ones you can build real relationships with because you’ll get real value out of that. Don’t choose people you think will be good transactional introducers.
78. But if you position it properly and you gain the trust of those individuals, you’ll end up getting more value than you ever could personally find from just an advisor. Build real relationships. Don’t go find transactional advisors.
79. You don’t go to an advisor asking for anything. You go to the advisor and explain the current state of your company and ask where they think they can add the most value. And you have to be brutally honest.
80. Be brutally honest with everybody about everything. Be honest with your investors, even the people that aren’t yet investors but could be. It gives them the feeling that you’re going to work hard to do the right thing all the time, and if something comes up that you didn’t know about, you’re going to explain that to them and let them know sooner rather than later. What they don’t want to see is you constantly trying to hide the unsavory parts of the opportunity.
81. It’s also important to be honest with employees. Once a month we have a company meeting where we show the money in the bank account, show all the prospects that we have, show them our hiring plans, talk about the next 30-60-90-day strategy. That way, at least once a month, there is nobody in the company that doesn’t know exactly where we are. That lets everybody know we’re making the right decisions for the right reasons.
82. Being brutally honest gets you far in life. I think a lot of entrepreneurs try to do the hard sell for employees and potential investors and customers. And they negate to do the hard reality. People think that the hard reality will always stop a hard sell. But I’ve learned in my situation that doing the hard reality first and then the hard sell gets you twice as far.
83. Entrepreneurs should ask their advisors the question: “How can I better utilize you to help the business?” Likewise, great advisors always ask the question, “How can I be more helpful to you?”
84. Once you have engaged your Advisors, you will want to ensure a productive relationship. Advisors can become a burden – in both expense and time wasted – unless they are managed wisely.
85. If you don’t ask, you don’t get. The reason you signed up advisors is because they are successful, connected, and knowledgeable people. This means they aren’t idle. If you want their help, you’ve got to ask for it.
86. Basically, there are three kind of advisors: “Mom” for adult supervision, “Jerry McGuire” for connections, and “Barack” for high-visibility window dressing plus those with specific technical expertise.
87. Figure out what advice you need and who can help you in these areas before you even recruit advisors.
88. The best advisors give you the hard, honest advice – not just act as cheerleaders. Think Simon Colwell in American Idol, not Paula Abdul. Sometimes, you need be told you suck.
89. Although many senior advisors may have more experience and perspective than the entrepreneur, if you don’t feel like they’re treating you with the proper respect and deference, don’t waste your time. Some advisors get confused about their roles. They’re not chairman of the board or a majority shareholder. It’s your start-up. You can solicit input, but in the end, you make the final decisions and are accountable for the results.
90. The message is loud and clear: A great Advisorship, like any other relationship, requires energy, communication, and commitment. Pursue advice, but with a commitment to do what it takes to set up your advisors to succeed.
Most early-stage investors are looking for in a startup:
50 percent strong team
30 percent week-over-week traction
20 percent revenue
What advisors can do:
1. it’s a targeted introduction or advice on user acquisition
2.
Here are some types of advisors to focus on:
A solid product manager in your niche
Someone with lots of proven online marketing and user acquisition experience
A well-connected PR person -- especially old-school offline PR
A finance person with tons of corporate development experience
Here's why these types of people are super beneficial to you:
The product manager knows how to build things that solve the correct problem.
An online marketer knows how to bring people to your solution.
A PR person can create great synergy by connecting you to brands they work with that have way more traction than you. Osmosis.
Finance corporate development person -- a money person who knows investors
References:
http://www.socalcto.com/2014/05/what-startup-advisors-do-i-need.html
http://www.forbes.com/sites/davidroth/2012/08/22/the-abcs-of-vc-funding-and-building-your-board/
http://readwrite.com/2014/08/04/startup-tips-board-advisors-yec
http://99u.com/articles/7013/finding-and-keeping-the-right-advisors-for-your-business
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