Your product or service or consultancy is serving a specific market, and that market must be defined.   Yes, it may be broad-based (“horizontal” as in “all consumers ages 18-49”) or very narrow (“vertical” as in “doctors in private practice in the top 12 metropolitan areas”), but there is always a market to be defined.

Excellent companies focus on this definition, and continuously test and refine this profile based on their successful penetration and on their failures.  Even small one-person consultancies must attend to the definition, and refine it often, especially in light of lost clients that were not well-served.

So, begin with defining your ideal client profile in as much detail as possible.  Then test and test again — does your marketing reach those profiled?  What is your close-rate and your retention rate?  Does the message need to be adapted?  How are leads generated?  If by referral, then you must define your ideal referral source.  If your audience is reached by marketing and advertising, then you must refine your message to fit the profile, or you must segment the profiles into narrower targets so the messaging can be fitted to each.

As you continue to refine your profiles and your outreach to those profiled, you must listen to the feedback you are receiving.  If the outreach gets you “non-clients” and prospects that do not close, change the outreach or change the profile.  Remember that every lost prospect you pursue is not just wasting your time and effort and expense, it is costing you the lost opportunity to pursue your ideal prospect that will close.

This is not rocket-science.  This is discipline.  And this discipline is one of the foundations of success.

We spend a lot of time working on our pitches to gain new clients.  We delineate our services’ features and benefits.  We tell our histories and stories of our mission and our passion.  As we get more sophisticated, we refine our unique value propositions.  We put sizzle in our deck.

But the most effective pitch is the one that speaks directly to the prospect’s interest — “what’s in it for me?”  In truth, your prospects do not care about your story or your passion.  And they don’t even care how you will get their needs accomplished.

All the prospect cares about is:  can you bring your track record of success to meet the required goals?

And the only way to speak to that is to present the results you have achieved in the past, with similar challenges and clients, that will affect the outcome of your proposed work.  This means your success stories, your unique way of approaching problems, your experience in bringing in the results desired.

So pitch those first.

But lately a couple of colleagues have tapped me for some “quick advice” and I find that six or 10 weeks have gone by and they are still “doing the creative thing” or “re-considering how I might start out.”

Now, I believe in planning along with all the other strategists in the world, don’t get me wrong.  But I have learned a lot from my colleagues and clients in the tech world about being “agile.”  We need to be agile when testing our service businesses and consultancies, just as we are in our product-world.

And agile means: take your skill set and go out into the market with your best initial positioning and pricing, and see what you get.

Then adjust.  Re-position something: your offering?  your target prospect profile?  Your pricing?  Your packaging of your services?

And take it out again.  Test the market.  Look where you can provide value to whom.  And adapt again.

I find those with new partners tend to indulge in this creative thinking way too long… it is as if they urge each other on.  Then again, some folks talk to themselves for weeks or months before they act.  Still others, on their own, dream about creating a specialized team of colleagues — that is, not going out to test the market until they have others with them, or others’ bios with them — not understanding that then they will have to “rain-make” for all of them!

There is a message in this behavior.  It might mean they are not going to act.  It might mean they are not going to launch at all.  And at some point their runway (of capital) will run out, and they will be left with their creative ideas and no data from the market or direction from the real world about what value they can offer to whom for what price.

Don’t let this be you.

Many consulting practices have specialized (vertical) offerings within their broad-based expertise, even successful solo practices. Our expertise can easily apply to many industries, so we consider our offerings “horizontal.”

But then, successful positioning becomes a challenge because we are speaking to multiple audiences.  So often I see a highly-regarded consultant listing all of his or her services in one long list, presented to everyone who may drop by the website or Linkedin profile.  The work falls to the readers (prospects) to sort out which services best apply to their situation (this is not “working smarter”).

So I have been working with my clients to refine their positioning and targeting of prospects.  Pulling out these “vertical markets” is not as simple as it seems.  But once identified, we can build out all the value propositions for each specialty, draft positioning language for each one, build supporting materials, content, and presentations to deliver to each sector, and highly refine our targeting of prospects.  Then we can price and package the offerings to suit the buying preferences of each market sector, based on the value delivered.

With all this prepared (whew!), we can design a revenue strategy which prioritizes how many clients we want from each sector, at what price and package and commitment, to bring us the highest margins with the best balance of time and effort (and lifestyle).

One client just carefully converted an aggressive pursuit from an employer (to abandon his practice and take an executive position) into an opportunity for long-term consulting.  Another is considering adapting her pro-bono experience for not-for-profits into a new, paid market sector for similar organizations to hire her expertise.  Yet another is leveraging his recent international work for an emerging market sector for work across the world.

Finding your hidden markets, and addressing them directly, is a key competitive advantage that will raise your profile above the other “generalists” who say they do what you do.

Here are some guidelines for short form brilliance in public speaking:

• The audience will only remember two things you say, so only make two points.
• Back up your two points with two supporting assertions or examples.
• Do not tell stories (an example is not a story) — the shortest story will take you 3 minutes to deliver, and you will run out of time to show your value.
• Align your two key points with your highest value proposition — the best two features of your products, or the best results of your consultancy.  You want the audience to remember your best offerings.
• After you have presented your two points and two supporting examples, draw a conclusion.
• A conclusion is an assertion of the value of your offering (product or expertise) presented as key results of engaging with you or your product.  Or it is a mild threat of the consequences of not engaging with you or your product.  Both approaches are the final statement that reflects the self-interest of the audience to contact you.

Some simple preparation can make your few minutes of fame effective in getting to the next step — the only step you want from these presentations — interesting prospects seeking you out for more information.

Good luck.

I was attending a going-away party for a long-term client of mine, as she moved on to other adventures.There were the usual roasts and testimonials, and the team was re-connecting with past employees who had come by.Folks were mildly buzzed and having a good time.

Near the end of the event, as I was leaving, a former employee (who had since become an independent consultant) accosted me, moving aggressively into my personal space, saying,

“How’s your business?You are still working with the same kind of clients as before, aren’t you?”

I backed up a few steps, and said I was, and that the business was going fine.

“Well, you can refer me to your clients, can’t you?” he said, thrusting his card towards me.

I had not been in touch with this person in many years, since he had left the company.I demurred that perhaps my client base was not the best fit for his services.

“Sure they are!I work with that size company too!”

As I stepped back even farther, he recognized that I was not responding, and immediately turned to a former executive from the company, and began the same type of questioning.

I was so offended, I was nearly speechless.Now, maybe he was drunk, as it was the end of the evening (this is no excuse).His interaction was so self-serving, so completely un-interested in me or my business, except as a lead source for him, that I took his card and wrote “blog” on it, to make sure I would write about the good manners of professional networking.

So, here goes.

Before you ask for a favor, spend some time with genuine interest in your source.Find out what they really offer their clients, whether their client base is actually a fit for your services, and how your source would best position you to them.If appropriate, discuss referral fees for those clients that work with you.

Give before you get.Send articles, free passes to conferences, or introductions of interest to your source.

Build a relationship.If you are interested in this colleague, create a continuing presence in his or her professional life.

Networking continues to be a hot topic and subject of groups, online matching sites, and books and articles.But the truth is, you only get valuable referrals from your colleagues

1. ·who understand your work and its value;
2. ·who trust you not to embarrass them with their clients and colleagues;
3. ·who know the criteria of your target prospects profiles;
4. ·who have a real relationship with you over time.

In light of this, the consultant’s behavior at the party was completely inappropriate on many levels, and left the clear impression that he was desperate for business, and did not know how to behave professionally.Now I will not refer him even if someone asks me directly about his skills.He broke all four of the criteria above.And he did damage to his reputation.

So, tread more professionally, be careful how much you drink, and consider the occasion in which (and the person whom) you solicit for referrals to your business.

I’ve been seeing a lot of business plans lately about companies built on the new ap platforms, or based on social media services, or with off-the-shelf software components combined to make a new product or SaaS offering.

The exciting news is that these recently stabilized platforms are generating a flood of new applications and services, that allow businesses and consumers to apply new technologies to new ways of communicating, to building communities and to consuming the goods and services they need.

On the entrepreneurial side, though, there lies an often-overlooked threat to these new companies: because the intellectual property is not deep, or cannot be patented, or the components that build the product are licensed, there is little defensibility to protect the company itself.

Now, if the entrepreneurs are satisfied to build a “back-bedroom” business, or a cash cow, and can launch the company self-funded, this may not matter.

But if the entrepreneur wants to gain outside capital in the form of professional angel or venture capital, this lack of defensibility is a serious obstacle to that funding.

So, entrepreneurs, listen up. If you are after venture capital, you must make your case that your application or service can withstand replication by much bigger players than yourselves. Oh, these competitors will let you run for a while, will let you prove the market, and even let you make the first-generation mistakes. But once you refine your product, its target audience, and its market reach, once you prove there is a serious revenue opportunity and upside for your idea, the big guys can copycat your idea and throw lots of marketing dollars at it, and leave you, as you were when you started, defenseless.

If you can envision this scenario, so can the investors. So you will need a compelling argument about defensibility before you request funds. You must define why your company will prevail long enough (6-8 years is now the expected rule) to dominate a market sector and create a liquidity event for you and your investors?

I was reminded this week that you should double your development costs and time to market (with all associated costs), and cut in half your revenue projections. Then, you should re-consider if your idea has legs. This is especially true if there is no unique edge to your business that will keep the copycats away, or nothing to gain you a particularly strong market penetration.

Yes, I know all the arguments about first to market taking a dominant position. And I know the case to be made for your competitors “buying” your company vs. “building” their own competition to you.

But examine these closely, in light of how easily you built your application, and needed very little new invention or intellectual property. In these times, it may be easier for your competitor to build the new generation of your idea in-house, fitted well to your competitor’s current product line, than to enter negotiations (and integration) with you. And first to market only matters if you have the capital to sustain your market share and fight off your competition.

So if you are light on IP, or tight on marketing capital, think again. Here are some ways to approach this strategic thinking:

What can you build or add that adds a competitive or defensive edge to your product offering?  It could be a new feature set, or deployment on multiple platforms, or early focus on an adjacent market which is not so competitive.

Research the venture capitalists you want to approach.  Look for synergies with products in their existing portfolios that may be enhanced by your technology, and pitch the VCs that an investment in your company extends the reach of this other company.  If that portfolio company is failing, you have a different pitch, that investment in your company can restore the portfolio company and shore up the VC’s ROI.

Look for strategic capital as well as venture capital.  A significant strategic partner that needs your functionality can provide you the initial market penetration through its partners or channels, legal support, and development funds to make your product truly viable in the market.  They can defend you against the copycats.  Your early strategic partner may become the company that acquires you, and sometimes you can negotiate a formula for acquisition during the initial funding, and allow them the “first look” for acquisition (but not the last look), on your terms when you are ready.

Consider this as well:  you might narrow your target market, refuse outside capital, and build that small, under-the-radar back-bedroom business and use it as a cash cow, and even as a launching pad (a private incubator) for your next new thing.

Just a thought.

]]> https://www.joeytamer.com/defensibility-different-now-and-still-critical-to-funding/feed/ 0 https://www.joeytamer.com/technology-trickling-down-to-change-the-world/ https://www.joeytamer.com/technology-trickling-down-to-change-the-world/#respond Thu, 10 Feb 2011 20:18:04 +0000 http://www.joeytamer.com/blog/?p=2149 Forgive a tech veteran’s nostalgia, but today I was reminded of how technology, over time, changes the world bit by bit (sorry, no pun intended).

Back in early 1984, Steve Jobs released a new personal computer, the Macintosh, a “computer for the rest of us.” Talk back then throughout the industry, and later throughout the world, was that the power of personal computing would “democratize” the power of information.

Even earlier, in the 1970’s, the academic and military world began sharing information through the Internet, before the interface Mosaic, in the 1990s, brought us the World Wide Web, the Internet for the rest of us.

Today, in 2011, a little Chinese child abducted from his parents 3 years ago and set to begging on the streets for his new “father”, was found by the Chinese police through a micro-blog set up for just this purpose. This is in contemporary China, a country holding much suspicion and control over allowing Internet access and the “democratization of the power of information” to its people.

There is a reading in the iChing about Water, one of the basic elements (Earth, Air, Fire and Water). The reading is entitled “The Abyss” because water trickles down and around all obstacles in its natural order, seeking its ultimate destination.

Technology anytime anywhere, electronic knowledge sharing, the Internet – these are all our new element, our new Water, trickling down over time, around all obstacles, to the vision first crafted not so long ago – knowledge for the rest of us, for all of us.

But then I was surprised this week: Google Alerts pinged me that I had been mentioned in a current (January 2011) blog within GameSetWatch with a link to a presentation I had given (a keynote in Melbourne, Australia, if I recall correctly) about doing business in China. I was at that time building a joint-venture in Shanghai. The blog referenced that the content of the presentation, linked in an audio archive on gaming, was relevant today, 14 years later!

Now, I do remember the presentation, but I actually didn’t pay attention in 1997 that it was being recorded. And more to the point, it never occurred to me that the recording would be archived and re-surface again all these years later.

I don’t mind. It’s just that I wasn’t aware then, and was surprised again today –even though I was consulting to Internet companies in 1997.

So be wary — not only is what you post about yourself up in cyberspace forever, everything that you do that is digitally captured is available to arrive there, now or later.

This strategy is beyond creating “buzz” by speaking in public, showing up at events, and posting on social networks. Yes, I know we are all busy – even busier now with the demands of social media, which you might assume lets everyone know what you are doing (not so – not everyone follows social media as closely as you might, or follows the same networks.)

I am talking about personal contact that puts you as a continued presence in the minds of your network. Personal outreach is special and very effective — the point is to let them know you are thinking of them. You should initiate contact perhaps every 2-3 months, even if you are in touch on work-related issues. This includes:

• Following up on all referrals immediately and copying them (or blind copying them, as appropriate) on all correspondence. This would include a public (in the follow up message) thank you, or a private email of thanks.
• Remembering to check back with your referral source on the development of the referral –even if nothing comes of it. A note that says “Just wanted to keep you posted that I met with ABC Company and we hit it off. They want me to get back in touch in a couple of months after they have completed their next phase. Thanks again for the introduction. I’ll keep in touch about ongoing developments.”
• Remembering to check back when the next significant step occurs with this referral, and another thank you.
• If nothing comes of it, and the referral comes to nothing, send an “end-note” that says, “Just checking in that ABC Company has decided to move in another direction. It is the right move for them. Thanks again for keeping me in mind and connecting me with them.” The courtesy of this simple communication thread shows your appreciation for the referral and respect for your colleague. It will get you more.
• Beyond this specific communication, you should be sending trinkets to your best referral sources and other influences. A trinket is a link to an article about something that you know they are interested in. Your email might say “Saw this in the Economist and thought of you. Assume you might have seen it, but in case you missed it, I’m sending it along in this link. All the best.” Same with appearances of people you know they follow, or networking gatherings that would be of use to them which require your invitation, or other resources that they might not be expected to have come across.
• With colleagues who are also personal friends, and where it is appropriate, a note from your holiday or vacation, or a photo they might like while you are away, is a special gesture, as is a birthday card on their day.
• When you send a trinket, don’t ask for anything. It is a gift, not a barter. It is a gesture that you are thinking of them, not an opening offer before asking for a favor.

At some level, this is just good manners. But it astonishes me how few good manners are shown in our busy business world… especially the ones that require that little bit of extra time and attention that “gets” you nothing.

What it gets you is respect, friendship beyond colleagueship, and top of mind for the next opportunity.