Vancouver Sun Business section, Saturday, September 19, 2009

Throughout North America and, indeed, around the world, governments and other managers of economies have recognized that in this century, innovation and knowledge, primarily in the form of technology, will be the main economic driver. For example, in March 2009, the Harvard Business Review suggested that the currency of global competition in the years ahead will be innovation. Some cities and regions have leaped ahead in the economic race by actively encouraging this conversion to an innovative knowledge economy, primarily through the bolstering of entrepreneurship infrastructure for technology startups. Part of this emanates from legacy thinking about the nature of infrastructure. In the 20th Century, infrastructure meant roads, bridges, airports, hydro-electric facilities, and other bricks-and-mortar assets. These were critical elements of social and economic development, creating jobs, stimulating commerce, and assuring our competitiveness nationally and globally.

I've always been extremely adamant about the critical importance of strong market and customer research to validate a product or a company.  I still am for the most part as it still continues to be one of the predominant weaknesses in the business plans I read or the pitches I hear.  But this video by world renowned futurist Patrick Dixon got me thinking about a slightly different slant on this discussion.  Click through for the video.  Enjoy.

Most people have heard of a SWOT analysis -- Strengths, Weaknesses, Opportunities, Threats.  This can be a very useful tool for helping you examine your business and define your strategic direction.  However, over the years I've noticed that many people attempting to use a SWOT analysis have really messed it up. I've even seen it messed up in blogs, educational material, and in some cases even by instructors.  Using a SWOT analysis incorrectly can be a major issue, causing flawed conclusions and consequently leading you to implement flawed business strategy. So do yourself a favour.  Use it right!

If you're starting a new company and looking to secure venture capital (equity financing) you may have already come up against the challenge of having to define the valuation of your company.  Actually, it's not likely much of a challenge for you at all because at the end of the day, the VCs are going to call the shots and the valuation they come up with will be the valuation you come up with (wink, wink). 

But what if you're raising some money from friends and family, or even Angel investors, and you need a valuation for the purpose of determining how much equity to give up for the money being invested?  Also, what if these ultra-early investors have expressed grave concern (as they should) about their equity position being diluted (worth less) once the VCs get involved at subsequent financing rounds.

Here's an article on convertible debt financing - a financing strategy every entrepreneur should be aware of.

http://tinyurl.com/22uglh

I've said it before, and I'm going to keep saying it.  Positioning is critical.  But what the heck is positioning really?  Most importantly, positioning is about grabbing the attention of your audience so they want to learn more.  So, know your audience!  This means, your positioning statement, value proposition, elevator pitch, etc., may need to be slightly tweaked to resonate with different audiences such as customers, partners, investors, and employees to name a few.  But what are the key ingredients of a positioning statement?

I attended the Clean Tech Luncheon hosted by the BCTIA today. Interestingly, yesterday I picked up a copy of Harvard Business Review and read the article "Tapping into the World's Innovation Hot Spots"

http://hbr.harvardbusiness.org/2009/03/tapping-the-worlds-innovation-hot-spots/ar/1

So, with the good 'ole HBR article in mind, I became concerned with what I didn't hear from the speakers or discussion panel at the luncheon - after all, the event was supposed to be a discussion about what we need to do in BC to develop our clean tech cluster, to "seize the clean tech revolution."

A small graphic design agency recently asked me how they can achieve an increase in inbound leads.  In the early stages, like many agencies, they built their business through word of mouth referral only. But now, they want to grow faster.  They want an opportunity to make more design pitches. They want more inboud inquiries and leads to follow up on.  Here are nine ideas to help you:

IBM, HP, EDS, SAP, Oracle, and all the big consulting firms often rely on smaller companies - often much smaller - to provide important components of the mammoth enterprise solutions they're selling.  So, if you're one of those smaller companies, what steps can you take to motivate these larger companies (i.e. your channel) to include your products and services in their proposals? If you're a salesperson, how can you motivate your sales counterpart in the channel to include your products in his or her deals?  I was asked this question a few days ago.  I think my answer was on the money, but afterwards I posed the question to my LinkedIn network only to find the answer isn't all that straight forward.  Here's what they had to say.

It's 6:30pm and it's been a long day at the office of your exciting start-up.  You have a cocktail in one hand and a stack of business cards in the other and you're standing in the middle of a dimly lit room all a-buzz with talk of new technology, innovation, angels, and VCs. It's going to be a great night of meet and greet, and you'll get a chance to promote your ideas and meet some people that can help you finance your business.  When you do, you'll have to absolutely nail your story because first impressions are few and far between. How prepared are you?

You have great ideas, well written business plans, methodically developed launch strategies and most of all, more passion and enthusiasm than a three year old at a petting zoo.  But what are your target customers saying?  In other words, where's the beef?

What does it mean to be truly customer focused in a technology company?  Perhaps you have product managers regularly in the field meeting with customers.  Perhaps your sales people are all schooled up on 'consultative selling' and the art of investigative interviewing for the purpose of fleshing out your customer's problems. Perhaps you have an exceptionally responsive technical support function.  These are certainly great characteristics in any technology company - or any company for that matter.  But what about your R&D department or otherwise, your software engineering department; how well do they know your customers?  What about your marketing communications team; how well do they know your customers, really?

Customers frequently request features.  However, if your company is operating from a customer-centric point of view, you should take care in asking the customer why they want the feature they asked for and what business problem the feature addresses.  You may be surprised how much critical insight comes out of this discussion and very often the opportunity to be innovative is just around the corner as you may identify a better way to solve the customer's problem than the feature they asked for does