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American Censorship Day – Be Very Afraid!

 

 

On November 16th the US Congress will hold hearings on the first American Internet censorship system. This bill can pass. If it does the Internet and free speech will never be the same.

It’s your Internet don’t let them take it away!

Click here http://www.americancensorship.org/# to send a message to the US Congress and express your opposition to this piece of legislation.

If you’re coming from outside the US and think this does not concern you. Think again. Many governments follow the lead of the US and yours could be next. Don’t let this happen in your country.

Act now!

Would You Hire Steve Jobs?

We’ve all heard that Steve Jobs, the iconic CEO of Apple is stepping down (or up) and will remain at Apple as Chairman of the Board and that Tim Cook will take over day-to-day duties as CEO.

As a result, there’s lots of talk these days about talent and whether we’re likely to see another Steve Jobs anytime soon. After all, how many technology CEO’s can you think of that would think much less say: “A lot of people in our industry haven’t had very diverse experiences. So they don’t have enough dots to connect, and they end up with very linear solutions without a broad perspective on the problem. The broader one’s understanding of the human experience, the better design we will have”.

So, let’s imagine that you’re the CEO of a hot tech company, real cutting edge and you just got funded and are on a hiring blitz. You have a candidate named Steve Jobs in front of you. Let’s imagine what would happen.

You: So tell me about yourself.
Steve: Well, I dropped out of college after one semester and went to India and became a Buddhist. That’s why I’m wearing these robes right now. They help me think different.

You: Hmmmm. Do you have any other training?
Steve: Yeah, I audited this really cool course on calligraphy and I think it’s going to have a huge impact on the way people use technology one day. I don’t know how yet, but I just know it.

You: Ah, ha, right. Did you take any technology courses?
Steve: Well, I hung out after high school at HP and listened to a bunch of lectures. But they don’t really know what they’re talking about. Matter of fact, I think they’ll eventually get out of the computer business completely one day.

You: Right. Now, we’re pretty enlightened here but it says on your social media page that you took LSD. Would you like to comment on that?
Steve: Its one of the two or three most important things I’ve done in my life. You see, altered perceptions are what permit a finer connection to the customer experience. It’s the groove. If you can’t grok the customer and what they’re feeling then you have nothing. It’s the void. That’s why I’m going to wear black slacks and black turtle necks all the time some day – to remind me of that.

You: I see. Now our investors want us to do really well. How do you feel about that?
Steve: Being the richest man in the cemetery doesn’t matter to me.

You: We’ll, is there anything else maybe you’d like to add that might make you qualified to join us?
Steve: I’m an orphan, my biological dad eventually married my biological mom but they had already given me away – it’s complicated. And, my dad’s an Arab Muslim. It’s all made me who I am – I think different.

You: Yes, indeed you do. Well, thank you for coming in. We’ll let you know.

So I ask you, how can we expect to have more Steve Jobs unless they rise to the top themselves? Because I sincerely doubt there are many companies that are capable of hiring based on the quality of the thinking a person brings to the table rather than the qualifications they bring on paper.

What do you think?

Biz Dev – Part III – Why No Revenues is Better

Foreigners are different from you and me. It doesn’t matter if you are Dutch, Chinese or American; your neighbor in the country next door is different. Europeans have this funny notion that a company needs to have revenues in order to have value. Americans have this funny notion that a company doesn’t need revenues to have value. Yes, we’re all different. But, if you’re living in Europe and have no revenues your neighbors’ (e.g. American) way of looking at companies – all at once – becomes attractive.

So what makes a no revenue company attractive? Customers! Lots and lots and lots of customers. So many new users each day or month that it becomes difficult to keep track of just how fast the company is growing.

So what, you say. Well, if you’re a US company with hyper-growth (e.g. think Twitter, Foursquare, Facebook) the  venture capitalists and angel investors in America will be throwing money at you.

If you’re based in Europe, you’ll be hard pressed to find a VC or angel investor who “get’s it”. Yes, “get’s it” is only now coming to Europe.

Here’s how it works. Venture capitalists in the US use a rough estimate of $2.00 in revenue per user per year (that’s two dollars) as a target for such hyper-growth companies (See this article). And, if you apply a multiple of 20X; then that user is worth $40 (That’s forty dollars!). And, if you have a million users, you have $40,000,000 in value. [I’m simplifying; but we’re looking at the “order of magnitude here” not fifth decimal point accuracy so put away your slide rule.] Therefore, if you’re investing when there are one million users and next year there will be two million users your investment will of course double. But what if you have 3x, 4x or 5x more users? If you’ve got a company on exponential growth, this isn’t out of the question. So even a $240 million investment at a $15 billion valuation (e.g. What Microsoft invested in Facebook early on), starts looking really good now that Facebook has over 750 million users and a valuation north of $70 Billion.

Let’s look at a company like Vente-Privee founded in 2001 in France. They were the pioneers of flash sales. They had hyper-growth. What did they do? They waited 10 years until a bunch of me too competitors had popped up in the US before even coming here. They just did a deal with American Express and are now launching in the US but hey, with a bucket full of cash, they could have come here 10 years ago. So how much value did they leave on the table because they couldn’t (or wouldn’t) take advantage of their hyper-growth? Billions of value lost.

Yeah, I know. Everyone’s not Facebook. But, there’s lots of companies with smaller numbers that are still impressive. Look at Evernote, steady, sure upward growth. Just a matter a time before they realize their full value for their investors.

So if you have company that’s adding users like crazy (after you give me a call) consider that if you’re in Europe your greatest returns may be in getting US investors to invest in your company so you can realize the value as quickly as possible before someone copies your idea and takes all that value away; unless of course you can find a European investor and VC who “get’s it”.

Biz Dev – Part II – 3 Business Development Tips For Success

Let’s recap my last post. A sale happens when marketing, sales and business development  combine into one lean machine… And business development is a fancy term for when you get your butt out of the office and start knocking on a customer’s door.

So here are three business development tips for you to use:

  1. Just F’ing do it (JFDI) – the easy part. You’d be amazed at how many don’t do it or get it. The VERY biggest client that I ever imagined or anyone else imagined of landing happened like this: “Hello, my name is Patrick Kedziora and I’d like to speak with Henry Kravis please”.  For those of you who don’t know who he is; he is the Sergey Brin, Bill Gates, and Steve Jobs of Wall Street – He’s one of the senior partners at the Private Equity firm of KKR – the world’s largest PE firm for many years and made famous for buying RJR Nabisco. And what did I use? A telephone. No, not Skype. Just a POTS line!
  2. Have something compelling to offer. Have something your client wants. “Yes, hello Henry, nice to meet you. I have some smart (e.g. risk adverse) money to invest and I like what you’re doing. Let’s meet and do some business”. Oh, you say… money… anyone can give away money. Well you try it. Have you looked at what money looks like? It’s green. It doesn’t matter who’s selling it. It all looks the same. So how do you differentiate yourself from the others? You need to know what your customer wants. And, it’s not more money. There’s lots of that around – even today. What they want to know is: are you going to be responsive to their needs, are you going to be there when they need you and are you going to leave them the minute something goes rocky in the relationship. Sound familiar? It should. It’s called relationship building – the same in life as in business.
  3. Just F‘ing do it (JFDI) – the hard part. Yep, so you thought getting in the door would be the impossible part. Sure it was hard. But, now they’ve met you. You told them what you could do for them. They said Yes, Yes, Yes, let’s do it now. And now, you’ve got to go back to your office, your team, your boss or your board and you have to actually make it happen. It’s nice when you’ve already done it before. If you’re a startup everything you’re doing you’ve never done before. In my case, I had no idea if my board would approve such an investment. You’ve got to remember, this is way before anyone heard of Henry or even knew what a PE firm was. But damn it, I knew it was a great piece of business and I was going to convince my board that this would make them money (’cause sometimes you gotta sell the client and your organization). And yes, I got everyone involved, I got our CEO to meet Henry and George and Jerry and what happened?… I got to invest in some of the most lucrative banking deals ever. Why? Because of one phone call. (I’ll tell you how I even thought to call KKR some other day – it’s another thing you’ll need to know).

So there you have it. Simple huh? 1) make the f’ring phone call, 2) have something the client wants and 3) actually deliver on what you said you’d deliver. That’s right, sounds simple but hey that’s the fun of having the rubber hit the road. ‘Cause when you get it right you can hear the screeching rubber and smell the fumes and feel the sucker hit 100 in under 5 seconds and feel your back slammed into the back seat from the acceleration. Now, that’s what I call business development!

[See the above video by Claude LeLouch. Warning: do not attempt this at home. This [the above commentary 🙂 and the video] were completed by a professional driver on a public road.  The film was actually banned in France. If you see it you’ll know why. Every time I go to Paris I dream of doing this! This is business development at its best! Controlled, focused, goal driven and with an objective in mind and pivoting and adjusting all the time.] [Note: March 29th, 2013 The original link showed the entire 8 minute film. YouTube pulled the link because of copyright issues. If you know what you’re doing you should be able to find the original online in about 10 seconds… Take the time, it’s well worth it].

 

Biz Dev – Part I – Know Where You’re Going or At Least Move!

Whether you’re European, Asian, American, Latin American, or African (what’s the stylistic way of including Australia and the South Pacific in such a list? But, I digress.). There’s only one thing on your mind. And no for you guys out there it’s not that…. it’s the other thing… MONEY. That’s what you want! More of it. More revenues, more profits. More, more, more.

What that takes (besides a great product, great customer relations, etc, etc, etc.) is sales. Sales is where the rubber hits the road. Sales is where the strong get separated from the weak. Sales is when a customer says YES, YES, YES, I want your product! But, so many fail at sales. And it doesn’t matter what you call it: some say “to-ma-toe”, some say “toe-may-toe”. Some say marketing, some say sales, some say business development. The sale happens where these three come together. Your marketing is the physical manifestation of your strategy; it’s the web site, brochures, videos and ads. Sales is the stuff inside the web site, brochures, videos and and ads that gives customers a compelling want to purchase from you. And, business development, we’ll that’s a fancy term for when you get your butt out of the office and start knocking on a customer’s door.

This is part one – stay tuned for part two next week where I show you how to kick some butt and part three in two weeks where I’ll talk about something that comes un-naturally: growing your business without revenues.

In the mean time, here’s some homework. Watch this video by Claude LeLouche. Besides being cool – what can you learn from it about business development? I’ll give you one clue: It was banned by the French government for many years. Watch it and find out why.

Click on the image to view the video!

Route map is from http://virtualglobetrotting.com

 

New Patent Law Embraces First to File, un-American July 4th

[Note: On September 8th, 2011 the Senate passed  89-9 to approve the American Invents Act (H.R. 1249). On September 16th, 2011 President Obama signed it and the patent office immediately began to implement it.]

Today is the 4th of July when Americans celebrate so many wondrous things. One thing we won’t be celebrating is the new Patent Law that recently passed the House [and which is expected to pass in the Senate] and which changes a very key element of current patent law which granted a patent to the person who was “First to Invent” something in their garage to the person (read company) that was “First to File” the patent at the patent office. I’m hoping that the President won’t sign this into law. It’s an insult to all inventors, tinkerers and all that we hold dear – the lone person working in their garage to come up with something that can transform the world. Where was the Venture Capital industry on this one?

To add further insult to injury, this is coming on the heels of a whole lot of hooplah surrounding the launch of Change the Equation a major push to re-invigorate science education and innovation in America. Do you really think we’re that stupid? How long will it take some high school inventor to figure out that the game is stacked against them? And, this is supposed to provide our next generation with hope? You’ve got to be kidding!

Sure, I understand the argument that this will put our legal system in line with other countries like Canada and Europe. But, when did it become American to be in line with anybody?

Let’s just consider this from a common sense point of view (Thomas Paine where are you when we need you?). You’re in you’re favorite chair and you think why don’t I go to the garage and invent that new mouse trap. You think a moment and you say “ah, heck even if I invent it I don’t have the money to file a patent now, someone will just steal my idea and file the patent first and I’ll have nothing, so why don’t I just sit here in the my chair and do nothing”. A sad day in America indeed.

So, as they say in French detective novels “Chercher la femme” – “look for the woman” or the person most likely to benefit. Is that the lone inventor? No! It’s those that can afford to pay the patent filing fee. It’s the established companies that benefit. As the New York Times reported “The change in the application system was favored by the large technology and pharmaceutical companies.” There is no more underdog. Simply: the fireworks of innovation are over, dossed in a bucket of legal water and special interests.

There is one small hope though, and that is that some legal scholars think this might be unconstitutional (see here and here). I hope and pray that it is true ’cause that would greatly rekindle my faith in an America where one can invent in one’s garage and build a business from the ground up.

Understanding America – Part III – 5 Things You Need to Know

So you know how big a market America is and how important it can be for your business. But do you really understand the why it’s so important. Here are 5 things you need to know:

  1. Yes, it’s a big market. It’s 311 million million people. But more than that. It’s 311 million people who love to shop. These aren’t Europeans who like to save for a purchase. They’re not Asians with new money and a need to buy all the essentials (i.e. car, laundry machine, iron). Americans have everything but we want more. So what you have is 311 million consumers that want to buy your stuff. You just have to come here and show it to them.
  2. Lots of Credit Cards. Americans have lots of credit cards so you don’t need to worry about if they have money. They have credit (at least some still do). From a non-US perspective this is a bit difficult to understand. There really aren’t any credit cards outside the US. Most of the plastic cards outside the US are debit cards – in short you can’t buy something if you don’t have cash in the bank. Not having cash in the bank never stopped an American. You just whip out your credit card and bang you get to go home with your purchase. You can worry about how to pay for it later. But, that’s another story. So, here’s what you need to know: American’s have lots of money. Companies too have credit (and you will have access to this) – less than they did a few years ago, but if they see something that can help their business Americans are used to buying today and paying tomorrow. Buy today, pay tomorrow – that’s American.
  3. Everyone speaks one language. Yep, that’s 311 million people who speak English (which includes a whole bunch that also speak Spanish). That means you do one set of brochures, one video, one TV ad, one web site, one of absolutely everything you need to reach your customers. If you’re in the European Union you’ll need to do this 22 times. That means your costs are 22x higher (we’ll almost) plus you have all that additional management overhead of managing 22 different regions. The US is one market. The only other market that will reach this scale in the future is China. But, what America has today is  a huge single market, a high per capita income and a sophisticated business environment with lots of legal and and patent protection.
  4. It’s one culture. Beyond having just have one language, America has one culture. The country is incredibly divers but there’s a core set of beliefs that run through the country. Some of those are: self reliance, can do, getting things done, not waiting for Washington to solve a problem (although this may not always work as well as we’d like), not waiting for Washington to provide you with the funds you need to grow your business (although there’s plenty of government money too), the belief in the entrepreneur and a belief that anyone can achieve anything here – heck, how many countries can say they elected a President of mixed race who’s father was from Africa. It’s a country where anything is possible. At least that’s part of the common culture and something most people have in common. Is your home culture one of can-do? Is your home culture one that elevates the entrepreneur? Is your home culture one that depends on it’s solutions (e.g. financing) coming from the capital city? If you can’t answer these questions to your satisfaction then you should bring your business here. You’ll find the environment refreshing – competitive for sure – but with endless possibilities.
  5. Its so darn easy. OK, you’re not going to be plucking gold from the streets – although many used to describe it that way in the 1950’s. America has grown up a lot since then but it still has an undeniable quality that you don’t see in many other countries – and that is: if you have a good product or service all you need to do is get it out into the market. American’s don’t care if you’re new to the market, they don’t care if they have never heard of you, they don’t care if you speak English with an accent. What they care about is: Will you make money for me? Will your product or service be good for my company? From a consumer perspective this isn’t all that different. Sure brands are important, but a foreign brand can be very chic to American consumers so play on it. This point is that you don’t have to have been in business 100 years and super connected to all the power players to sell your products here. What you need is the willingness to pick up a phone (See my blog – This Is Not A Telephone) or knock on that door or in short, the willingness to just to it..

So, there you have it, 5 tips on understanding what doing business in American means. What you need to do is book that flight and start doing business here. It’s a lot easier than you think and a whole lot more profitable than going after the 2 or 3 countries that are next to you. Your 311 million customers are awaiting. So, go ahead. What are you waiting for? Book your flight now!

Understanding America – Part II – How To Incorporate (or how easy it is to get things done)

Whether it’s Americans going to Europe (or anywhere for that matter) or Europeans (or anyone) coming to America; the prospect of incorporating their new business is perplexing at best. But what makes America’s way so different from other nations?

The process in many European countries takes from seven to ten days – not counting time spent talking to your attorney and accountant – but you’ve got to do that in any country, even in the US. So, let’s just focus on how much time it takes to do the actual paperwork.

In the US it’s an easy 1-2-3 step process:

  1. You call a free telephone number for a company like LegalZoom.com at (888) 381-8758 or just do it all online. It should take you no more than 30 minutes. And, it costs as little as $99 dollars – yes that’s right – $99!

    They’ll ask you things like where you want to incorporate. I’ve always chosen to incorporate in the State of Delaware because that’s where most Venture Capitalists like it to be – plus it’s recognized by most investors as a place that has lots of commercial law to protect investors and shareholders. And that is a good thing.

    If you’re an individual it’s probably a good idea to ask for Sub-Chapter S status. Your attorney and accountant can explain this in greater detail. This blog is just about the actual paperwork.
  2. After you’re done, call the Internal Revenue Service (IRS) – the US tax revenue authority – and ask them for an EIN number (Employer Identification Number). The EIN is like a social security number for companies and you’ll need one to open a bank account and most things official. Yep, you can do this by telephone and it’s free. You can reach the IRS EIN number hotline at 1-800-829-4933. This should take no more than 15 minutes.
  3. Now, go to your refrigerator and get something cold to drink. You’ve worked really hard – one hour at most – and you need to catch your breath. Oh, you’re breathless because you can’t believe it was that easy.

So, if it takes seven days to get started in Europe that’s 56 hours (7 days times 8 hours per day).  Alright, so it isn’t 100% of your time but still 56 hours just thinking about this versus less than one hour actually doing it is a HUGE difference. In the US you can incorporate during your lunch hour and go back to work. You can’t do that in Europe – you’ll need to take some time off to get this done.

So there you have it, now you know why America is such an easy place to do business in. It’s easy just to start your business here – you can even do it during your lunch hour.

5 Simple Mistakes That Can Derail Your Startup

I see more careless and avoidable mistakes by entrepreneurs so keen to perfect their product that they loose track of the very simple things. These little mistakes though can mean the difference between getting a new customer or not; or getting that funding that they want or not. In short, simple mistakes can have gigantic repercussions. Oh, BTW, this applies to all startups – US, European, Asian, Latin, you name it… ALL!

  1. Put a full signature on all your outgoing email messages. That means: your full name, telephone number, company url, email and anything else you think is really important. Why all this? ‘Cause you want to make it easy for people to call you back (no looking up your number) and for people to stay in touch (by making it easy for them to cut and paste all your relevant info). Just look up how to do this in your email client. Look under help on adding a signature to outgoing emails. This applies to all messages from your mobile phone too.
  2. If you’ve got a foreign phone number make it easy for persons in the US to understand how to call you. For example, many foreign countries have zeros in their phone numbers which are used if dialed locally but not used if dialed internationally. For example a European cell number might be (33) (0)6 12 34 56 78 but when dialing it in Europe from within that country you would drop the “0”. Confused? Yep, it can be hard to understand at first. So make it easy for someone in the US to call you anc put something like the following in your signature: “From the US dial 011 + 33 6 12 34 56 78”. It just makes it easier and avoids missed calls.

    If you have a US number make sure that you put a 1 before the area code as 1 is the country code for the US. Don’t make the mistake of assuming everyone knows that. They do, but it’s bad customer relations to make that assumption, plus the one person that doesn’t know will probably be the person that places that big order.
  3. Put your contact information everywhere. You’ve spent countless hours preparing your slide presentation. You send it to a friend who then sends it to an important investor. But, oops, there’s no contact information in your slide deck. Oh, it was on the last page you say. Oops the last page got lost. Do yourself a big favor and put your contact information on every slide. At the very least your website and maybe your name, phone number and email.
  4. On your website make sure you provide people with multiple ways to reach you. That includes emails and phone numbers. But you say: I don’t want to get a 1,000 calls. Yes you do. If they are to congratulate you then you’ll know you’re doing something right. If it’s to complain then you know you shouldn’t be wasting more time doing things the way you are. Plus get real, you’re just starting, few companies take off overnight. When they do, then you can maybe remove the phone number and just have an email address. Until then, leave the number on your website.
  5. Use a regular land line telephone to make all your important calls. OK. This one is probably more for European entrepreneurs. But, I’m finding more folks in the US also starting to do this: using the cheapest form of phone call possible; namely: Skype. [See my previous blog entitled Ceci N’est Pas Un Téléphone – This Is Not A Telephone]. Use a regular phone line! It’s the best voice quality you can get. Sure it’s a bit more expensive but a lost customer or a lost funding opportunity is much more expensive. If you must use a mobile phone and must have an important conversation with someone. Ask if you can call them back from a land line and then do it.

So the next time you’re sending an email, putting together a presentation or making a phone call ask yourself: is there a simple detail I’ve forgotten about that could lose me this client or funding opportunity?

Go ahead… you know what you need to do now. So, just do it!

Understanding America – Part I – The Billion Dollar Sure Thing

I get asked all the time by European entrepreneurs what America is like. Many have seen it but to them it still remains a mystery (and so too for many Americans). So what is America?

Winston Churchill understood it quite clearly. He said: “You can always count on Americans to do the right thing – after they’ve tried everything else.”

So what does this mean? Simple. It means that America’s form of democracy is rather messy, problems need to become really big before they are solved or addressed in any meaningful way. It means there are lots of billion dollar opportunities just waiting for the right entrepreneur.

Here are a few examples:

  • Europe has better health care than the States (they live longer) and they deliver it at half the cost (about $3,500 per person versus $7,000 in the US). America is trying to solve this and the only way it knows how is to find the billion dollar sure thing. That means huge insurance premiums (billion dollar sure thing #1) and more money being spent on health care to satisfy the customers (billion dollar sure thing #2). But that’s not efficient you say. Who said anything about efficient, there’s no money in that, the profit is in the inefficiency. See. Simple.
  • Let’s look at another example: Diabetes. This terrible disease is of epic proportions in the US. What that presents is billion dollar opportunities to create clinics, insulin makers, and specialists of all kinds. But what about getting people to eat healthy. Well, we already have the billion dollar junk food business (i.e McDonald’s) and the billion dollar healthy food business (i.e. Whole Foods); what we need now is a billion dollar diabetic business. See? Pretty simple.
  • OK, one last example: Energy, oil, crude, Texas gold – a big multi-billion dollar problem. American just imports and consumes too much energy. So where’s the solution? Well, America’s working on it. A little wind here, a little battery thing there; but it still has not found a solution that has enough “B”s, as in Billions, to begin to be a solution to the existing BBBBBillion dollar energy business. So it keeps looking. Perhaps you have something?

You’re thinking that’s a pretty dumb way to do things. Well, maybe it is, but it’s the American way. It’s much easier to create a billion dollar solution to a problem to keep it in check than it is to solve a multi-billion dollar problem that is protected by as many special interest groups.

So, when you’re looking at opportunities in America. Look at the problems – the really big ones. In them, I’m sure you’ll find the next great billion dollar sure thing in solving them. Then come here, you’ll find the investors and you too could be on the cover of Forbes.

Oh, and if you haven’t noticed. Just because America eventually does the right thing doesn’t mean it stops doing all the wrong things, the wrong things, many times, just end up co-existing with the right thing.