Testing, Testing, 1,2, 3

One of our assignments for class has been to write product assumptions. In that assignment I learned about minimum viable product (MVP). MVP is a proof of concept, the act of “getting something” out there. Some people go as far as defining it as 6-20 customers and most folks agree that by releasing an MVP, you give your company credibility. Yes, it’s important to get a product to market, but I wondered if there were some things companies shouldn’t do when launching a product.

Entrepreneur magazine is a trusty source for a lot of my research given they tailor content to start-ups and small business owners. Today wasn’t the day to let me down. Contributor Cory Levy wrote an article called, Starting Up Wrong: 6 Product Testing Mistakes You Need to Avoid. Spoiler alert, there are 6 things he says to avoid in this process and you’ll have to read the article for the details but here are the headlines:

  1. Letting Bias taint, the process
  2. Data problems
  3. Relying on technology to test
  4. Ignoring the competition
  5. Waiting to ‘sell’ until it’s built
  6. Leaving assumptions untested

While it’s important to get a minimally viable product to market, it’s also important to balance that with testing.

What Are You Looking at!?

As an entrepreneur you try your best to find out what’s on your customer’s minds. You send them surveys and ask them for suggestions. You might even incentivize their spending through a loyalty program like a discount card or frequent shopper bonus. So, what would you do if someone told you that you could study their behavior by installing cameras in your shop displays?

In an article for The Atlantic, Sidney Fussell exposes how Walgreens has launched “smart coolers” in major cities across the United States. These refrigerated cases can scan your buying behavior as you look upon the selection in a drink case. The author describes this as “new tech that turns your purchases, your movements, even your gaze, into data”. The main purpose of these cases is to figure out if the way a drink company, for instance, markets or displays a product influences the demographics they are targeting.

Fussell goes on to explore the legal implications of using technology that requires facial recognition as it is outlawed in several states. He also points out that this type of “smart cooler” is only one of many emerging technologies that aim to study consumers in their native retail environments.

How long before creative entrepreneurs can afford to use such technology?

Outside of Dog/Human Relationships, Does Loyalty Still Exist?

Many business publications would have you believe that customer loyalty no longer exists or at least doesn’t exist in the same ways as in past generations. Articles like this 2016 Forbes article questions how to gain customer loyalty in an age where 79% of retail consumers say they would take their business elsewhere over one bad experience. The article goes on to explain that loyalty programs and incentives help to keep consumers on the hook.

There are lots of articles in the media also claiming Millennials are “killing” products, businesses and institutions as we know it. Don’t believe me? Here’s a 2018 list of things Millennials have supposedly “killed”. Instead of villainizing the largest group of working consumers since our Baby Boomer parents, it’s important to understand Millennial buying behavior and how loyalty in the twenty teens might just look a little different. Lu Chen for Forbes explored this concept in 2017 with a piece they did highlighting how to create loyalty among Millennials. The author highlights concepts like emotional impact, frontier technology, and international markets. Maybe instead of saying Millennials are “killing” things we could talk about how industries and trends are changing, like in past generations.

Loyalty still exists; it just looks a little different.

Voice of the Customer

In the Four Steps to the Epiphany – Successful Strategies for Products that Win book by Steve Blank, he talks a lot about the customers. I fact, he probably writes the word customer more than the word product. He knows that without finding and marketing to appropriate customer groups, even the best products are destined to fail. Blank walks through several aspects of engaging customers to include:

  • The customer discovery model
  • Discovery
  • Validation
  • And Creation
  • Additionally, he includes a comprehensive customer development checklist

This book is a great reference and guide for any entrepreneur who is trying to launch a business or product. Companies are doomed to fail without finding their tribe of devoted customers. And once you have those customers, it’s important not to let the brand voice dominate the voice of your best brand advocates: your customers. To drive home this point, I recommend checking out Jason Maynard’s article for Entrepreneur Magazine called, When Your Customers Are Talking, Quiet Your Brand Voice and Listen.

MacKenzie Bezos Deserves Some Credit

Last semester I interviewed Jeff Kaplan, Director for Venture Asheville. One thing he told me as advice for entrepreneurs has hung with me since that time. When asked about tactics for funding a start-up he said, “Personally, most of what I’ve done is bootstrapping, pinching pennies, and personal savings. It is really helpful to have a working spouse”.  That working spouse piece has really stuck with me. For someone in a partnership to be “all-in” and really go for their entrepreneurial dream, sacrifices have to be made. His words have especially been poignant as I keep seeing the ridiculous controversy over the divorce of MacKenzie and Jeff Bezos, billionaires and founders of Amazon. Many news outlets keep making comments about “how much MacKenzie will get in the divorce” evoking rage in every spouse who has ever silently, or not so silently supported the entrepreneurial endeavors of their significant other. I could write a laundry list of reasons why these one-sided, sexist headlines are an oversimplification of the back story of any entrepreneurial couple, but I don’t have to because Louise Matsakis, a writer for WIRED has written a brilliant piece called, MacKenzie Bezos and the Myth of the Lone Genius Founder.

For those of us who are entrepreneurs, love an entrepreneur, or find ourselves in an entrepreneurial partnership (business and/or romantic), it’s important to recognize the PARTNERSHIP. The myth of the lone genius founder is indeed farfetched and rare.

FINALLY! Someone Talks About Intrapreneurship

The name of my blog is The Strengths Focused Intrapreneur, and yet, for the past four semesters, the classes in my program at WCU have focused on entrepreneurial pursuits. Don’t get me wrong, the info is helpful, especially for managing the business side of my husband’s writing career. But what I do in my “day job” is live the life of an intrapreneur. I have lots of autonomy in what I do to manage the departments and functions that report to me, and I basically have little micro-businesses within a larger corporate structure.

So, imagine my delight when in our assigned text for the semester I found a whole chapter in Rogers’ Entrepreneurial Finance on Intrapreneurship!

Joseph Alois Schumpeter, himself, asserted that entrepreneurship did not have to be confined to start-ups. He said, “Innovation within the shell of existing corporations offers much more convenient access to the entrepreneurial functions than existed in the world of owner managed firms. Many a would- be entrepreneur of today does not found a firm, not because he could not do so, but simply because he prefers the other method.” (Rogers 269).

I feel the essence of Schumpeter’s conclusion every day. I am an intrapreneur, and I make the conscious choice to hustle within the corporate structure because I grew up in a family business. I want to know that my paycheck will be on-time, that the collections department is doing their job, that billing statement need not be stuffed around the kitchen table at the beginning of every month, and that my 403b/401k has a handsome match provided by my employer. I loved our life growing up, and also, being the family-owned business is HARD. That’s not to say my life as part of a larger company is easy, but it’s certainly not an 80+ hour a week job, either.

Rogers asserts there are two types of Intrapreneur. He even offers a nifty model (Rogers 270):

Intrapreneur Spectrum

Caretaker– the anti-intrapreneur; happy with the status quo. Not interested in anything outside moderate growth or development of a product.

Developer– looks at the status quo and finds growth opportunity in existing business lines; might find new markets or customers to facilitate growth.

Innovator– creates new products, services or business models outside of regular R&D.

Some days I wonder what it would be like to start my own company or leave my large company to head-up human resources for a growing entrepreneurial endeavor. And then I read articles like these that remind me why I harness the power of my entrepreneurial spirit for intrapreneurial good.

Here are a few articles that might help ground or propel the budding entrepreneur:

I hope you find these articles helpful for choosing your own path as an entrepreneur, intrapreneur, or neither. As for me, my day job will mostly fulfill me in my intrapreneurial pursuits, and I’ll continue being an entrepreneur at home in helping manage my husband’s business and in the multiple side hustles I find myself involved in.

Additional Resources:

Rogers, S. (2014). Entrepreneurial Finance: Third Edition, Finance and Business Strategies for the Serious Entrepreneur. 269-278.

3 Entrepreneurial Funding Sources to Revisit: Loans, Lines of Credit, & SBA Guarantees

Ideas often come easily to the entrepreneur. Even with great ideas, securing funding for a new venture can be the toughest part of the entrepreneurial process. Depending on the type of venture, funding can be even more complicated. While many folks lean towards “bootstrapping” a.k.a. self-funding, some ideas take a bit more capital than an entrepreneur might have in their own bank account. Others pursue the help of angel investors or launch crowdfunding campaigns. These methods might be trendy options, but it’s not time, just yet, to dismiss some of the more traditional types of funding like good old fashion bank loans and lines of credit. These options are often referred to as debt options. Even these seemingly traditional debt options have experienced some revamps over the past decade. Let’s explore the highlights of each:

Loans:

While banks are the obvious place to start, you can get loans from multiple other sources like:

  • Angel Investors- locally, specific to a business industry, and/or national groups.
  • Family and Friend loans- just ask the people who believe in you the most, but PAY THEM BACK.
  • Person-to-person (P2P) on sites like Lending Club (it’s like a combination between crowdfunding and a bank loan).
  • Non-Financial Institution lenders for cash flow lending like Northwestern Mutual and Prudential
  • Personal Guarantees with the Entrepreneurs personal property as collateral.
  • Community Development Financial Institutions (CDFIs)- groups with specific affinity business groups in mind (examples: Farmers, Women-owned businesses, etc.) that might not be backed by traditional banks.
  • Community Banks– smaller independent banks that understand community need and investment more than maybe a large national bank would.

 

Lines of Credit:

  • Work much like opening a credit card, but through a lender. There is a maximum amount the entrepreneur can charge.
  • Or, open a business credit card– it is a credit line.
  • Unlike a lump sum loan, businesses use the money only as it is needed and only make payments on money spent.
  • Lines of credit are particularly helpful if you have some cash flow slow downs because of a seasonal business or because you are just establishing the right payment schedule between you, your customers, and your suppliers.
  • Some suppliers work out lines of credit with the businesses that buy from them, this is industry specific, but it’s worth asking for a line of credit from a supplier.

 

SBA Guarantees:

  • Founded in 1953, the Small Business Administration has loaned funds to over 20 million businesses (Rogers 2014).
  • Perks of their loans include longer pay back periods, most around 10 years and some up to 25 years.
  • The SBA does not loan directly to businesses, rather they use approved banks and financial institutions.
  • Only 1/3 of these loans go to new businesses each year in favor of established businesses.
  • Non-profits, financial institutions, gambling, life insurance, and non-US citizen owned companies are all ineligible for SBA funds.
  • The SBA offers a wide variety of loan products like Express loans, Micro Loans, and Real Estate & Equipment loans. Contact an SBA certified lender for a full list of options.
  • In addition to funding, the SBA offers programs and classes through their development and learning center.
  • SBA lenders can be found through sba.gov or 1-800-827-5722

 

Crowdfunding might be trendy, but remember, entrepreneurs can’t afford to just try one way. I hope this article has convinced you that loans, lines, of credit, and SBA funding has evolved and all three might be a viable option for your business depending on the needs of your entrepreneurial pursuit.

 

 

Resources:

Hecht, J. (2016) 5 Best and Fast Small-Business Loans (Some of Which You’ve Never Heard of). Retrieved from https://www.entrepreneur.com/slideshow/314882

Hecht, J. (2017) Lines of Credit: Online Lenders vs. Traditional Banks. Retrieved from https://www.entrepreneur.com/article/271273

Rogers, S. (2014). Entrepreneurial Finance: Third Edition, Finance and Business Strategies for the Serious Entrepreneur. 161-195.

Slotnick, D. (2018) The 8 best small business credit cards to open in 2018. Retrieved from https://www.businessinsider.com/best-small-business-credit-card

Loans Definition – Entrepreneur Small Business Encyclopedia https://www.entrepreneur.com/encyclopedia/loans

Additional links to businesses and financial institutions can be found throughout the article.