“No one wants to die. Even people who want to go to heaven don’t want to die to get there. And yet death is the destination we all share. No one has ever escaped it. And that is as it should be, because Death is very likely the single best invention of Life. It is Life’s change agent. It clears out the old to make way for the new. Right now the new is you, but someday not too long from now, you will gradually become the old and be cleared away. Sorry to be so dramatic, but it is quite true.

Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma — which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”

-Steve Jobs

 

Recently I had the pleasure to attend Deploy 2010 hosted by Seattle 2.0, and I watched several startup pitches. I know there are millions of ‘how to pitch’ articles out there, but it prompted me to revisit and update my previous article on putting together a winning startup pitch.

My previous article, Lights, Camera, Action!, highlighted what to present and communicate if you were given 15+ minutes for your product and technology. In contrast, Deploy pitches were about 3 minutes, in front of the entire audience. In other words, they are intense. How do you send out a clear signal, when the noise level is high in such environments? That is the focus of this article.

“I didn’t have time to write a short letter, so I wrote a long one instead.”
—Mark Twain

As Mark Twain’s quote captures, the less time you have to deliver your message, the more time you need to invest in your pitch. It is difficult to use just a few words to boil down the essence of your idea… So, where do you start when you are so short in time!? For that, I like to reflect on Chris Orwig’s thoughts on poetry and photography from Visual Poetry: A Creative Guide for Making Engaging Digital Photographs.

“What the novelist says in 20,000 words, the poet says in 20. And, after reading a poem we don’t just have more information, we have more experience. A good poem isn’t about reductionism. It is about reducing, simplifying, and deepening. A poem always gives more. And poems are spare. With so little space, they require a distillation, which concentrates and intensifies their meaning and effect. Like evaporating seawater, where only the salt remains, those few lines communicate more.”
—Chris Orwig

Distill your poetry

With the frame of mind of a poet, you need to distill your startup pitch and demo to:

1. create awareness;
2. intensify meaning;
3. spawn engagement;
4. provoke action.

Just like a spiral staircase, you need to build on each separately, while weaving their effects jointly. To do that, you need to pull together pieces of your product; your vision; what is here today while hinting at future possibilities; what is it that you do that no one else does; and who will benefit from all this hard work and how.

Of course, this all depends on the action you want to provoke. If your focus is on creating partnerships, you need to twist your story a bit. You need to do all that, but also add the tangent as to why the potential partner would want to be hitched to this brand new bandwagon.

And, unlike the line from Jerry Maguire: You had me at “hello!”, it is way too easy to loose your audience in just a few minutes. Remember, you don’t have the luxury of time to win them back. Once you’ve lost their attention, that is it… No soup for you! Next!

Create a flow

To create and maintain an engaged audience, you need to have a steady flow through your presentation. As a poet, at each step, as you reduce and simplify your message, take the opportunity to go back and deepen your audience connection using your product features, competitive differentiation, customer stories and such. Keep working to close the circle between awareness to action, while leaving room for curiosity and interest with your audience. If nothing else, make sure your energy, excitement and passion is contagious!

Your ugly duckling is beautiful

Words such as amazing, gorgeous, beautiful are not the exclusive sayings of Steve Jobs about Apple products. After working so hard on your product, why not take the time and share how amazing it is! Even the small things, such as readability of fonts and balance of colors can make a difference to your audience. Remember, first impressions do count!

Streamline your product demo and weave it together with your pitch. Show the most exciting features of your product that you want to leave your audience with, which are also aligned with the action you want to generate. It is important to leave something to the imagination. Practice until you release the poet in you, so much so that when something goes wrong (and it will), you won’t lose a beat and your audience will stay with you.

Don’t ramble, don’t use buzz words, but be human and humorous. Realize that, without sufficient background as a foundation, your product will not make sense. So, keep weaving the concept together, and layer it until it is simply clear.

And, if you want to stand out from the crowd…

Understand your audience, and use whatever you can to keep their attention. Make sure to have your female counterpart present at the pitch, and include her in your presentation. That is, unless you are pitching at Women 2.0…

1. culture enforces and feeds what makes you successful; and
2. culture is a living system that supports and nourishes itself.

Also, back in 2007, I wrote an article that emphasized why you should care about your organization’s culture. Now, it is time to focus on how to explicitly define your culture, and document your secret sauce.

Recently I had a good discussion on whether one should even attempt to define one’s culture, given Heisenberg and the uncertainty principle. Though it is a valid argument, there are benefits to knowing thyself. If you are an acronym heavy culture, develop cheat sheets to help newbies navigating through your acronym soup. Or shift your email/IM heavy culture with voice and face-to-face communications to spur collaboration and minimize misunderstandings. Yes, change occurs, and your culture naturally evolves. Knowing what is the keystone of your success, and what cultural elements you need to evolve mindfully is the focus of this article.

Now, without further ado, let’s identify the key aspects and interactions of your culture through the following steps:

1. Calibrate your compass
2. Identify your key ingredients
3. Let them simmer
4. Distill and serve

Step 1: Calibrate your compass

When the going gets tough, when hard decisions need to be made, where do you turn to? What do you use as your guiding principles to ensure your decisions are aligned to support your firm’s success? For IDEO, it is their hot groups (The Art of Innovation: Lessons in Creativity from IDEO, America’s Leading Design Firm) and how their culture supports the success and creativity of these groups. For Amazon, it is their customer focus and desire to become the most customer-centric company on earth, but also the recognition that they are in the manufacturing (logistics, warehousing, fulfillment) and distribution business (Strategy 101: What business are you in?).

Good to Great: Why Some Companies Make the Leap… and Others Don’t emphasizes the Hedgehog Concept to capture what distinguishes good companies from great ones.

The Hedgehog Concept is a simple crystalline concept that flows from deep understanding about the intersection of the following three circles:

• What you can be the best in the world at;
• What drives your economic engine;
• What you are deeply passionate about.

Your recipe for success lies at the intersection of these three key dimensions, and your translation of that insight into a simple crystalline concept. Once you have your recipe, you are ready to place out your ingredients on the kitchen counter.

Step 2 – Identify your key ingredients

There are many ways to slice and dice what contributes to culture. In my research, I identified seven key ingredients that must be looked at individually, and then together as to how they support each other and your success recipe.

• People — Company employees are one’s first introduction to your culture. As first impressions count, who you hire, how they talk and behave will say a lot about your company at a first glance.
• Customs — All your rituals, stories, spoken and unspoken rules indicate what is acceptable, how one should behave in certain conditions and most of all, what behavior is valued by peers and management.
• Values — Values reflect one’s attitude and opinion towards people and things. These include what is worthwhile, desirable, useful and important, which in turn influences our behaviors and decisions.
• Structure — These include organizational structure, as well as unwritten lines of influences, power structures, information flow and decision processes. We have a tendency to compensate for incompetence in the form of bureaucratic structures followed with complex processes and policies.
• Work space — This represents the visual aspects of the company, its work space and environment that houses all involved. Everything from how the individual work spaces are designed, to meeting rooms, logos and other symbolic items (including dress codes) give insights into your culture.
• Processes & policies — Processes and policies highlights how your organization is controlled, measured and managed. How they support and align with the rest of your organizational identity will help or hinder your intended culture.
• Vision — Vision is all about the future aspirations, desires and possibilities. It acts as your guiding light to support your secret sauce to success. Though it may be vague, your vision weaves itself into the fabric of your organization’s culture.

For an individual analysis, start by asking questions, such as the ones I have suggested below. These questions can focus on the current state as well as the future desired state of your culture. For a group discussion, post-it notes are a good tool to capture, organize and prioritize information. If you are doing this as an individual, I like using the Cornell System of note taking to capture my thoughts. This allows me to record my information in the rightmost column, and add my insights and observations on the left hand column. Whatever the method you may use, make sure to capture current and future desired states of your culture separately to help with your simmering and distillation process.

Ingredients of Culture - Analysis

Step 3 – Let them simmer

Though the individual analysis gives you a good insight into each aspect of your culture separately, it is important to put it together as a system to see how the ingredients interact. Using mind mapping process, you can see the linkages between each ingredient and dig into how cultural traits support each other.

If your mind map lights up like a christmas tree all over, it is a sign that your cultural traits are integrated throughout. As a living system, this highlights a strong infrastructure, where each element supports and nourishes each other. If some of the main cultural ingredient branches are more integrated than others, it highlights the areas to ponder further. If there is hardly any linkages between the branches, you are probably looking at a very bland sauce…

Step 4 – Distill and serve

Once you simmer the ingredients together and gathered the needed insights, the next steps are driven by the outcome desired. To identify ways to improve the current state, or to develop a future desired state, focus on the traits and the interactions, and how as a system they support your success/hedgehog concept. By utilizing gap analysis (from where you are to where you want to be), you can develop action plans to get to the desired state.

As part of your analysis, it is important to identify cultural traits that are endless, that should be preserved as the keystones of your culture. These keystones represent your firm’s central building blocks that forms and bonds your firm’s identity. Understanding what is changeable and what is foundational will allow you to mindfully evolve your culture.

Technorati Tags: culture, defining culture

Hopefully these personal insights will help anyone in need for little strategy to successfully maneuver around the blockades in the system. Please share your own strategy and insights on what works for you.

Recognize that a small step can create giant leaps

As I mentioned before in Small steps… Big leaps, with every small step and by using tipping point leadership principles, we can all create giant leaps. Innovation comes in different shapes and sizes. It is a multidimensional concept where the innovation can happen in varying dimensions and degrees: technology, process, product, service, business model, value-delivery, brand, design, quality, culture, market, customer/segment, … So, start small. Choose an area that you not only care about, but one in which you can also be successful: success breeds success. If things don’t go as well, practice resilience, take your learnings and start again.

Know your influence circle

Perhaps the best discussion of this topic is given by Stephen Covey in The 7 Habits of Highly Effective People. Covey discusses the concept of circle of concern and circle of influence, and emphasizes that by focusing on what people can control, they empower themselves to influence and change circumstances. I have seen brilliant people dwell on things that they have no control over, nor should even matter. Unfortunately, this habit is nothing but a distraction from what really matters, and wastes energy on what one cannot change.

God grant me the serenity

To accept the things I cannot change;

Courage to change the things I can;

And wisdom to know the difference.

– Serenity Prayer

Working with a mentor can help focus your energy and provide insights on how you can increase your influence circle. You can also take this to the next level by identifying each of the core areas that you are interested in vs. what you can control or influence in each of those areas. Using a simple radar graph, you can quickly identify gaps and develop an action plan.

Increasing your influence circle may not be a simple task, especially if you are dealing with existing perceptions. However, you can:

• Start small: success breeds success.
• Take visible accountability and responsibility on areas you control.
• Demonstrate creative thinking and problem solving.
• Step up and be visibly engaged.
• Recognize that Rome wasn’t built in one day. Practice patience and mindfulness.
• Develop your intuition and stay connected to other’s motivations, goals and objectives. Help them be successful.
• Deliver results and stay ahead of the pack.

Know your boss

Just like innovations, bosses come in every shape and size. In general your success and their success is intermingled (though this is not always the case). Good communication is crucial to understanding  their influence circle, their goals and values, concerns and motivations, styles and risk profiles, openness to cooperation… Basically anything that matters when it comes to managing change, as innovation is change!

Perhaps the biggest challenge is when there is a value clash between you and your boss. This is where your instinct and intuition can support you. I once worked for a manager that didn’t believe in inter-organizational cooperation, which didn’t align with my core values. Through utilizing good risk management process along with clear roadmap and understanding of roles and responsibilities, I worked around the issue. However, realize that, even if it turns out to be the biggest success, you will not necessarily get the credit or appreciation. So, don’t ask for it. Don’t expect it, as you are doing it for yourself by being true to yourself.

Hitch a ride with corporate wide strategy

You might have one of those corporate-wide initiatives that every individual in the company could recite in their sleep. These initiatives could certainly be useful as a platform for justifying as well as finding support for your ideas. Unfortunately many of these initiatives just stay at the surface and do not carry weight in the organization. So, take it for what it is,  plan your strategy around it while making it work for you.

Test drive your concepts and ideas

Establish a small group of diverse individuals that you can test drive your concepts with that you trust. Ideally a group that can represent diverse views from technology, product, business and customer perspective, and can help you polish and enhance your pitch. For more on this, see my previous article: Meet your idea critics.

Work on your communication and presentation

How well you communicate and present your ideas is your key to success. So, work on it. Through your discussions with others, build your communication deck and keep refining it.

Remember, the success of your execution is dependent on people: your team, your firm as well as the larger ecosystem of suppliers, service providers, labor unions, partners, … Transparency in your communication will help build trust and openness.

Murphy does live with you

Enough said! Risk manage! When they cancel the project, don’t take it personally. Take your learnings and move on. Realize that there are anti-bodies everywhere and they don’t want change.

Start with end in mind

Change is hard and it doesn’t necessarily follow your plan. Stay true to your vision, your ideal future state, and be flexible on the strategy you take. Stay agile and adapt. And remember to build from small steps with demonstrable, concrete results.

Technorati Tags: intrapreneurs, interpreneurship, innovation in established corporations

We had a great visit to Japan. Kyoto was more beautiful than I remember, as cherry blossoms were everywhere. Tarkan (my 11-year-old son) and I had the opportunity to visit Osaka, Kyoto, Nara, Himeji, Hiroshima, Miyajima and Tokyo. I have published our trip photos on Flickr. I plan to get back to Japan as soon as I can.

Thanks to Ichiro Suzuki (Japanese-born baseball player who plays for Seattle Mariners), everyone in Japan seems to know about Seattle, Washington. This came in handy when trying to bridge the language gap.

Japanese culture is complex and deep, and full of contradictions: new vs old, traditional vs trendy, nature vs gadgets. There is a large emphasis on acceptance and integration in all parts of their lives, potentially influenced by Shinto religion. Elegance, beauty and design dominates their castles and shrines. Design, and more importantly attention to details, is everywhere, from subways to the tea ceremony.

We had the opportunity to visit two science museums in Tokyo: National Museum of Nature and Science as well as The National Museum of Emerging Science and Innovation. Both had free entrance for kids, with a nominal fee for parents/adults. They are both fascinating museums and I recommend them highly, and the entry fees strongly indicate the cultural bias towards technology and education. 

Given the overall interest on science, technology and innovation, I struggle with the apparent lack of entrepreneurship in the country. However, on the day I was leaving I stumbled upon an interview with Founder and CEO of Rakuten, Hiroshi Mikitani, in The Japan Times which was insightful (Rakuten is an Amazon Japan competitor). 

The biggest difference between Japan and the United States is that Americans believe from the bottom of their hearts that in order to develop their country’s economy they have to start new industries. Now, the truth is that Japan is the same. All the companies that emerged after World War II in Japan were venture companies, and they were smart — Sony, Matsushita (Panasonic) and so on.

However, they were so smart that they created an atmosphere that has led people to believe that new companies are no longer necessary. But that’s wrong. Unless you have new companies emerging, you won’t get new industries or new services. I think that’s a fact.

The government should say that Japan is going to lead in scientific technology, and develop strategic policies to make that a reality. The national government needs to encourage entrepreneurial spirit. There is a real lack of vision among the leaders of this country. I mean, I wonder what percentage of lawmakers even use the Internet? Compare that with the BlackBerry-wielding Barack Obama.

– Founder, President and CEO of Rakuten Inc., Hiroshi Mikitani – The Japan Times Online (April 5, 2009)

I agree with Mr. Mikitani, and I believe that his observations are universal. We would all be wise to regard the “success” of big companies with some skepticism, as with this success comes a natural tendency toward reduced risk-taking, innovation and entrepreneurial spirit.

Technorati Tags: Japan

“An idea that is developed and put into action is more important than an idea that exists only as an idea.”

–Buddha

We all have ideas… They come out of nowhere: in the shower, while driving, over coffee, reading newspapers… But, without taking the time to develop your ideas, they are nothing but a thought, a blink in time.

In this blog, I’ll share my 5-step process of taking an idea and transforming it into a business concept blueprint. The goal of this exercise is to engage your thinking muscles. Here is a quick overview of the steps.

1. Dive into your problem space to refine your vision
2. Chisel out your opportunity and state your mission
3. Map out your product/service concept and strategy
4. Explore the profit potential
5. Write down your next steps and action plans

Step 1 – Dive into your problem space to refine your vision

Tim Hurson (Think Better: An Innovator’s Guide to Productive Thinking) emphasizes the importance of using divergent, creative thinking to make long lists and then using convergent, critical thinking to make choices.

“You have to get the first third ideas out of your head to make room for the second third and third third ideas to come.”
– Tim Hurson, Think Better: An Innovator’s Guide to Productive Thinking

As Tim points out, pushing for third third ideas help us break out of our learned patterns and explore a new wave of thinking. Using his set of questions, I further explore my problem space and identify potential opportunities.

1. What is the itch? Why change is needed?
2. What is the impact? Why it is important?
3. What is the information? What do I know about the causes and how can I learn more?
4. Who is involved? Who are affected and influenced by it?
5. What is my vision? What do I see as the future if this itch was resolved?

These questions are targeted to focus your thinking to understand and choose a problem area that you feel passionately about with a vision for a better future. For each sub-step, complete your brainstorming activity by reviewing your lists, then clustering similar themes and concepts together. Finally, choose the most important clusters you want to work on. And then, move on to the next sub-step in the process using your choices from the previous sub-step.

At the end, you will have a set of potential vision statements for your ideal target future. Using Tim’s I3 (Influence, Importance, Imagination) method, you can further evaluate each of the potential target futures.

• Influence — can I control and/or influence the target future? If the vision is outside of my control and influence circle, it might be futile to work on it.
• Importance — am I energized by the potential of solving this problem? If it is something I don’t care about, it will be hard to get excited day after day to work on it, too.
• Imagination — does the problem require creative thinking to solve? If exact solutions already exist, it may not be worthwhile to put in effort.

After your evaluation, select the 3-5 most compelling vision statements that meet all the I3 criteria. Review and choose one (or a combination) ideal target future you want to work on. At this point, it is important to restate this vision statement so it is energizing and motivating for you. Vision describes your desired future in clear terms, providing focus to your mission. Otherwise if you don’t know where you are going, anywhere will do.

“We started with a vision of a computer on every desk and in every home… Every day, we’re finding new ways for technology to enhance and enrich people’s lives. We’re really just getting started.”

– Bill Gates

Now that you have your vision and ideal future, you are ready to move on to the next step.

Step 2 – Chisel out your opportunity and state your mission

While the vision is all about our ideal future state, mission is the purpose of existence. It answers the question of what we do and why this organization was formed. When we achieve our mission, we bring our vision, our dreams, to reality.

Identifying that key question to focus your resources in order to create your ideal future is a good way to get to your mission statement. Again, I use Tim’s HMW (how might we) or HMI (how might I) exploration processes to list out various burning questions as part of my brainstorming process. As with previous step, by clustering, clarifying and then choosing, I identify the key opportunity that I want to work on and solve.

• “Google’s mission is to organize the world’s information and make it universally accessible and useful.”
• “At Microsoft, our mission and values are to help people and businesses throughout the world realize their full potential.”

This is also a good time to outline what success means to you. Your success criteria could be a list of financial, strategic, constraint-based as well as value and brand related items.

• Capture X% market share within Y months.
• Achieve positive cash flow within Y months.
• Have X positive product reviews in trade journals within Y months of introduction date.
• Proof of concept within Y months.
• Don’t alienate existing customers with new pricing model.
• Use sustainable business strategy and green manufacturing.

With my vision, mission, key opportunity area and success criteria defined, I am ready to capture my product/service concept and strategy.

Step 3 – Map out your product/service concept and strategy

You can continue with your brainstorming approach or you can add a little more creative zing to your thought process using other creative methods such as from Creativity Today by Igor Byttebier and Ramon Vullings; Thinkertoys: A Handbook of Creative-Thinking Techniques (2nd Edition) by Michael Michalko; The Innovator’s Toolkit: 50+ Techniques for Predictable and Sustainable Organic Growth by David Silverstein, Philip Samuel and Neil DeCarlo; and many others. Here are some of my favorites:

• Identify existing presuppositions and eliminate or reverse them. If existing solutions are complex, how would you go about simplifying them? If they are boring, how would you make them more engaging?
• List out your superheroes and their attributes, and imagine how they would go about approaching your problem.
• List out key objects in the system and use personal analogy to explore solutions to problems. If you were to improve collaboration among virtual teams, how would a document feel in that system? Lonely, confused, static, out-of-date? How would you go about changing that?

You may come up with several potential approaches for your product/service concept. That is great! Evaluate each of these ideas against your success criteria as well as set of key attributes that is important to your product/service.

Any important attributes and factors you identified during your brainstorming in step 1 can be used to develop your preliminary strategy canvas (Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant). As W. Chan Kim and Renée Mauborgne highlight, strategy canvas enables organizations to understand the current state of the market by mapping out key factors the industry is currently competing on as well as consciously deciding what value the organization plans to give the customers and differentiate its offerings. As this is a preliminary stage, instead of mapping out specific competitors, draw what you know from the industry and others for the initial map. You can find more information strategy canvas here.

At this point, you have a rough idea of your product/service, its competitive differentiation and perceived benefits and value. The next step is to analyze the profit potential.

Step 4 – Explore profit potential

Again, this is an exploration process without doing any in-depth market research study. The goal is to roughly identify set factors and metrics to achieve profitability.

• What would be your startup costs? How about your burn rate?
• What would be your pricing strategy? What would you expect as a per-customer profit margin?
• How many do you need to sell to make a living?
• What would you need to support your customer base?

“Too often we measure everything and understand nothing. The three most important things you need to measure in a business are customer satisfaction, employee satisfaction, and cash flow. If you’re growing customer satisfaction, your global market share is sure to grow, too. Employee satisfaction gets you productivity, quality, pride, and creativity. And cash flow is the pulse — the key vital sign of a company.”
– Jack Welch

You might end up with different product/service concepts with varying go-to-market strategies. Using cash curve analysis (Payback: Reaping the Rewards of Innovation), evaluate your revenue and cost projections. For insight into cash curve analysis, check out Reaping The Rewards Of Innovation in InformationWeek. Make sure to capture your assumptions which would influence profitability, such as first to market, achieving de-facto standard, etc.

As you are evaluating revenue/cost potential, be sure to utilize the customer life-cycle to explore potential dynamics from customer acquisition all the way through support and disposal. Innovation life-cycle is another tool for guesstimating revenue/cost projections from development through decline phase.

Step 5 – Write down your next steps and action plans

This process was meant as a starting point for your business plan. If you are interested in taking your idea further, make sure to capture any next steps and action plans using SMART (Smart, Measurable, Attainable, Realistic, and Timely) goals.

Putting it all together

You may decide at this point that you do not wish to follow up on your idea. Either way, I am hopeful that you found this process to be valuable. If you are looking for other sources of information, please check out my bookshelf.

Technorati Tags: business plan, developing ideas

I think entrepreneurship is mostly a state of mind. It is a state of mind about how you create things that people haven’t envisioned before. How you aggregate the resources, motivate people and execute against that vision. It doesn’t necessarily mean you have to go start your own business. I think the state of mind of entrepreneurship can happen at the largest of corporations … and it can happen at the smallest companies …. Across the whole gamut, entrepreneurship is really about the state of mind: creating new products, creating new markets, creating new ideas, and then creating new businesses. And capturing some of the economic rents from that vision and the hard work.
– Jeff Housenbold

Enjoy the presentation. As you are listening to it, make sure to reflect back on your definition of entrepreneurship, your past experiences of applying it to your career, and explore the opportunities that exist for its application currently and in the future.

Technorati Tags: definition of entrepreneurship, Jeff Housenbold, Shutterfly

This shift is evident in the way U.S. and international investors value America’s public companies. In 1984, the market value of the physical assets of the top 150 U.S. public companies – their “book value” – accounted for 75 percent of the total value of their stocks. A firm was worth nearly what its plant, equipment and real estate could be sold for. By 2004, the book value of the top 150 U.S. corporations accounted for 36 percent of the total value of their shares. Nearly two-thirds of the value of large companies now comes from what they know and the ideas and relationships they own.

Intangible assets include things that are created through time and effort: trade secrets, copyrights, patents, trademarks, source code, know-how, organizational competencies (technologies, databases, culture, capacity for innovation), business processes , company brand, customer loyalty, and not to forget your skilled and trained workforce, i.e. human capital, all contribute to your intangible asset portfolio. Though these are not physical assets that you can see and touch, they can positively effect your bottom-line and the valuation of your firm. Here are some examples:

• Famous brands: Lexus, McDonalds, …
• Coco-Cola’s formula: Merchandise 7X
• Famous logos: Apple, Google, BMW, Nike, …
• Amazon’s customer review database, Google’s search database
• Trademarks: Kleenex, iPod, Trinitron, …
• IBM’s patent database

As important as these assets are, in most cases, management of them are an afterthought. Just like anything else, intangible assets require active management to support, to build and to grow in order to maximize their value while keeping the overall cost down. At the same time, for a variety of reasons, it is difficult to properly manage these valuable intangibles.

• Challenges of putting together an effective measurement system to track the performance of the intangible assets.
• Not spending adequate time to understand your core business, its key performance drivers and how they are linked to your intangible assets. But don’t stop there: learn to how to legally protect them.
• Only focusing on your intellectual property, and not properly analyzing/including your source code, know-how, business processes, workforce skills/expertise, …
• Neglecting to put together a risk management plan for your intangible asset portfolio to defend as well as advance your leadership position.
• Solely focusing on defensive moves while forgetting to find ways to nurture and grow your intangibles.
• Intangible assets may not have direct tangible impact, and very likely complement other intangible assets, such as the case with workforce training in software quality that eventually improves revenues through increased customer satisfaction.
• Treating your intangible asset analysis as a one time activity, and not managing them as part of your strategic business cycle.

To manage your intangible assets, start with identifying them and determining how they are linked to the success of your strategy and your competitiveness. Perhaps tools such as the cause-and-effect diagram can help narrow down the field while keeping it meaningful, relevant and long-term focused. Balanced Score Card performance metrics can also help to incorporate your intangible assets with your strategy.

Next, put in place a tracking and measurement system to monitor the progress of your intangible assets. Since it can be challenging to put together an effective system, keep it simple and start small. As I mentioned before, make sure your metrics are clear, actionable, support business objectives, and based on data and facts. Finally, build internal awareness for your most valuable intangible assets.

Technorati Tags: intangible assets

Seth Godin’s book The Dip: A Little Book That Teaches You When to Quit (and When to Stick) is short and effective. It certainly made me question the wisdom of “Never give up, never surrender!” In many ways, I followed Seth’s logic when I left Amazon.com after 5 months of employment. Quitting is an emotional process, otherwise my decision would have come 2 months earlier!

Seth’s book doesn’t offer a recipe for determining if something is worthwhile to quit. That is a process of self-reflection where you ask yourself: will it/I be remarkable, will it/I be best in the world, or in my case “is this what I want to be known for?” You have to determine those questions for yourself, based on your definition of success.

Strategic quitting is key to aligning yourself towards success, but making sure not to quit too early while in The Dip is also Seth’s message. Yes, getting through The Dip is hard, and that is the point: “The Dip creates scarcity, scarcity creates value.” And, value is created when you lean into the Dip, where you push harder and change the rules. Not when you just chug along…

Quit the wrong stuff.
Stick with the right stuff.
Have the guts to do one or the other.

PS. Seth referred to The Magic of Thinking Big as influencing his thoughts about success. I haven’t read it yet, but it has received good reviews. So, I am adding it to my book list.

Technorati Tags: book review, The Dip, strategic quitting

First, you gotta start with a compelling concept. This does not mean you spend the next 20 minutes lecturing someone in the coolness of your technology. But, it is about focusing on the problem that you are solving, and succinctly explaining how your product solves it and why people will buy it. The key is to highlight your unique differentiation, your original angle, so it captures interest and makes people curious.

Once you got the interest, next is your story line. As you are putting your story together, keep the focus on what makes you and your product unique, as well as what its key selling points are. Remember, it is not about showing every single feature of your product, but more about incorporating your purpose and your compelling concept into your demo. If you say everything, you end up saying noting at all… So, build a story line around what matters, such as your users, and make it fantastic.

You also need to build in drama and diversity. Remember, to make it stick, you gotta make it simple, concrete, credible, emotional and bring unexpectedness with each story (Made to Stick: Why Some Ideas Survive and Others Die.) What will make the show catchy so people will tune in week after week, season after season? So, talk about the state of the industry, where things are heading, who are your competitors, why they can’t copy you and how you plan to sustain your competitive advantage. Make it exciting as you talk about the commercialization potentials of your product, what you will leverage and how. Most importantly, make it stick!

What about the special effects? Certainly who you are, the brand and the image of your company and product, needs to come through loud and clear during the presentation. However, have you ever seen a pilot episode having a better special effects than even the first season release? Make the quality of your presentation (images, graphs, …) as great as possible, but don’t forget about what really matters the most.

Lets not forget your cast and crew. After all, chemistry and ability to work together on and off the set is just as important as the artistic credibility of the individuals. So, highlight your team and their background. Especially if you have exceptional skills and experiences in the team. Remember, you gotta be credible! Not to forget truthful and passionate about what your are doing. You can’t tell it; you have to show it and mean it!

Lastly, don’t forget to study your audience before the presentation. Think about it, pitching The Man Show to Lifetime Movie Network makes as much sense as Chewbacca living on the planet Endor. So, research the backgrounds of the individuals you are meeting with and tailor your presentation to deliver to their requirements. Be confident and comfortable with your audience.

This covers the key elements of building your demo. Now, your script also needs to deal with your business model. The amount of time you need to spend on it during your demo will mainly depend on two factors: 1) how far along you are in your business; and 2) your audience. For early stage startups, many investors look at the business model as a moving target. So, with that, your story, the problem you are solving, how you are solving it and what you have prototyped is far more important than any 5-year projections.

However, that doesn’t let you off the hook. You need to have a clear understanding of your business and be able to sell them on your elevator pitch. So be ready with an executive summary of your business plan that not only they can walk away with, but also compels them to take action. In a way, this is the rolled up summary of your presentation that is clear, to the point and exciting. And, not to forget realistic.

With that… Lights, camera, action!

Technorati Tags: business pitch, product demo, chewbacca