Innovation

One of the brightest bright spots in all eight years of the Bush Administration was Tom Sullivan, chief counsel of the U.S. Small Business Administration, Office of Advocacy.

There are a lot of reasons for that, which I won’t go into right now (although, if you’re interested, feel free to check out my final podcast interview with Tom shortly before he left Advocacy for greener private-sector pastures). But one of the coolest things he left behind him was the r3 initiative.

The Regulatory Review and Reform Initiative (that is, r3) has its roots in Section 610 of the Regulatory Flexibility Act. Under that part of the law, regulatory agencies are required to occasionally blow the dust off the regulations on their books and take a look at them, to see whether they might be outdated, ineffective, duplicative or otherwise unnecessary.

That sounds a lot simpler than it is. There are hundreds of thousands of regulations on the books; just deciding where to start must be fairly overwhelming. Sullivan’s idea was to harness the experiences of small business owners who need to deal with those regulations by asking them to nominate federal regulations they believe are in need of reform.

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Before the Internet, when business was literally done with a firm handshake, small business types relied solely on local customers. The Internet has changed that forever. It allows us to communicate in ways unimaginable only a few years ago. It also makes it possible to discover an endless supply of information with just a few clicks. And these clicks, performed by strangers half-way across the world, may lead to new customers. But there is no possibility of converting clicks into customers if they can’t find us, which is still a challenge frustrating the majority of small businesses.

Back in the day of the firm handshake, the principles espoused in Dale Carnegie’s landmark book, “How to Win Friends and Influence People,” were used by millions of business people with great amounts of success. Although the book was originally written in 1937, it’s as relevant today as it was back then. In fact technology amplifies Carnegie’s philosophies allowing them to impact more people than Carnegie himself could have ever imagined.

And quite possibly the best example of winning friends and influencing people in a Web 2.0 world is President-elect Barack Obama – who many feel has just completed the most successful Internet marketing campaign ever. Here are a few ways Obama’s campaign infused Carnegie’s original concepts with Web 2.0 tools and strategies in order to win and influence millions of people.

Make the other person feel important and do it sincerely

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In early childhood you may lay the foundation of poverty or riches, industry or idleness, good or evil, by the habits to which you train your children. Teach them right habits then, and their future life is safe.—Lydia Sigourney

Too much money is worse than too little for most organizations—not that I wouldn’t like to run a Super Bowl commercial someday. Until that day comes, the key to success for most organizations is bootstrapping. The term bootstrapping comes from the German legend of Baron von Munchhausen pulling himself out of the sea by pulling on his own bootstraps. That’s essentially what you’ll have to do, too.

1. Focus on cash flow, not profitability. The theory is that profits are the key to survival. If you could pay the bills with theories, this would be fine. The reality is that you pay bills with cash, so focus on cash flow. If you know you are going to bootstrap, you should start a business with a small upfront capital requirement, short sales cycles, short receivables terms, long payables terms, and recurring revenue. It means passing up the big sale that takes twelve months to close, deliver, and collect. Cash is not only king, it’s queen and prince too for a bootstrapper.
2. Forecast from the bottom up. Most entrepreneurs do a top-down forecast: There are 150 million cars in America. It sure seems reasonable that we can get a mere 1 percent of car owners to install our satellite radio systems. That’s 1.5 million systems in the first year. The bottom-up forecast goes like this: We can open up ten installation facilities in the first year. On an average day, each can install ten systems. So our first year sales will be 10 facilities x 10 systems x 240 days = 24,000 satellite radio systems. That’s a long way from the conservative 1.5 million systems in the top-down approach. Guess which number is more likely to happen. read more

The debate is as old as the web itself – what is the role of marketing in a medium that is so clearly driven by interaction and communication? I have a lot of thoughts about this topic, but a recent Ad Age article roused me to address one of the most irritating myths out there: That somehow social media and marketing don’t mix.

Titled “P&G Digital Guru Not Sure Marketers Belong on Facebook,” the article quotes Ted McConnell, Manager of Digital Marketing Innovation at P&G in Cincinnati. The money quote: “What in heaven’s name made you think you could monetize the real estate in which somebody is breaking up with their girlfriend?”

As I read on, I became certain that the article, which has gotten a lot of attention given P&G’s profile in the marketing world, took what was clearly McConnell’s nuanced view and gave it all the subtlety of a Michael Bay film.

“Social networks may never find the ad dollars they’re hunting for because they don’t really have a right to them, said Ted McConnell,” the article begins. It then goes on to lay out the reasoning behind such an assumptive lead: McConnell doesn’t like random banner ads, and Facebook’s targeting, which purportedly solves the issue of randomness, leaves him cold. Given those two things, Ad Age drew what I must say is an extremely lazy conclusion: Advertising on social networks doesn’t work – look, a senior guy from Procter says so!

Well, I’m here to call bull on this myth.  And I’m pretty sure McConnell would agree with me. read more

They say “when life hands you lemons, make lemonade.”  The same philosophy should be applied creatively by small business owners to take advantage of the financial conditions and possible slow down in their businesses.

Any event that generates extra time for a small business owner is a gift that should allow time to reflect on the business and think about business and personal growth plans and taking the business to the next level.

There are a myriad of ways to enhance a business when one finally has the time to give the project full attention.  For example, a slow down in business opens up time for the owners to modernize marketing materials and technology, to cross train their employees for greater flexibility, or to shore up their own capital either by accepting an open line of credit or accepting the many offers of new business credit cards that arrive daily for businesses based on sound financial footings.

These ideas are not unique to any one industry, although I apply them to the solo law practice I run, and I previously owned a small law firm that navigated successfully through the last economic slow down/market crash.

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The client-service industries are infamous for ideas that exist outside of the realm of possible. For consulting, idea-generation, advertising, and advisory-type companies, there is often a struggle to really identify with a client’s needs, goals, and situation. There is a tendency to propose ideas without consideration for the “execution experience.” Questions like “will the team go crazy trying to do this?” “do they have the energy to pull this off?” and “can they even afford this?” are often secondary and left unconsidered. Some of the most productive service-based organizations we have interviewed insist that the only way to really understand a client’s reality is to make something yourself. Method, a brand experience agency, is a perfect example of a company that has grounded its client-facing approach with multiple internal projects. Their own website, method.com, was described as a “challenging and very personal branding exercise” by CEO Robbie Vann-Adibé. “We were committed to applying the design fundamentals, strategy, and technical expertise we use for our clients in order to fully support our own brand.”  They benefited from taking a taste of their own medicine.Another great example is New York agency Brooklyn Brothers - the advertising agency that also produces Fat Pig Chocolate, PMS vitamins, and a series of children’s books (see previous interview). The team at Brooklyn Brothers believes that making a product lends invaluable insights into logistics and the real amount of time and effort it takes to execute. Not only do their own products boost profitability (and fun), they are also a competitive advantage when serving clients.  read more

Whether you’re a solo entrepreneur, a small business owner, or a corporate executive, one of the things that can drive you absolutely nuts is trying to figure out how to silence the inner critic that rears its ugly head and stomps your business dreams into the ground whenever you try to take a significant step forward.

It’s even more discouraging when the answers people give you about how to deal with this critical inner voice sound good in theory but are difficult in practice.

No doubt, you’ve already had to contend with “The Critic” when you try to venture out or move your business forward. The following remarks by The Critic may sound familiar:

• Where are you going to get the money to do this?

• This will never work.

• You’re just wasting time with this idea.

• What if you don’t succeed?

• You can’t pull this off.

Well, get ready to celebrate, because I’m about to reveal the secret that will solve this excruciating problem once and for all. And, relax. It doesn’t involve that common but useless advice to “push through your fears.” read more

Reality Check” is a monster of a book. It has 94 short chapters and runs about 460 pages – but it is such an easy, entertaining and hilarious read, that you would never dream that it was that long. In fact, I previewed the book digitally and had commented to a few people that it was a short read. And in a way it is. You can read it any way you like; you can start from start to finish or you can grab a chapter or two whenever you have about 3 minutes to spare. That’s about how long it takes to read any of the chapters.

I’ve been reading this book over the last week or so and it’s a shame that it’s so big because it’s one of these things you want to take everywhere you go – for those few spare minutes where you want to read something short that you can think about and noodle on later.

The book is written in a form that’s a cross between a blog post, a presentation and a conversation. You run into the blog-post style in the introductions and in the commentary throughout the book: read more