There were two very interesting news events this past weekend.
By now, everyone has probably seen the highlights of Derek Jeter hitting a home run for his 3000th major league hit.
While all of the news highlights focused on his performance that day, I thought one of the most outstanding performances that day was actually by the Yankees’ marketing staff.
The historic hit occurred in the bottom of the third inning in front of about 47,000 people in Yankee Stadium. By the bottom of the fifth inning, the 3000th hit souvenir shirts, caps, and other memorabilia had been rolled out to the concession stands and many of the 47,000 were lined up to take home a memory of the day.
What a great focus on customer value. A player reaches a historic milestone, and 20 minutes later you have a line of people ready and willing to buy some more of your products.
That same weekend, the Transformers 3 movie opened and grossed more than $44 million.
Like the other Transformers movies, one of the stars in this film was a Chevy Camaro.
Not only was the Chevy Camaro star of this movie, but the producers and General Motors had partnered to offer a Transformers edition of the Camaro, and this custom version was available for order from your local dealer the same weekend that the movie opened.
Another great focus on customer value. If you enjoyed the role the cool looking car played in the movie, you could go down to your Chevy dealer the next day and put down a deposit on one of your very own.
What great ways to give the customers what they want, and get some higher margins in the process.
Tuesday, July 12, 2011
Sunday, May 29, 2011
Why is there no focus on the business of publishing?
Spent some time last week at Book Expo America at the Javits Center in New York. I've never been to BEA before, but as an author and publisher, I was told this is one of events that I must attend to get a firsthand look at the latest trends affecting the book industry.
The massive exhibit hall at the Javits was filled with book publishers, service providers, and others who in some way make a living from the book industry. Besides the author book signings and the publisher displays of their new titles, the key themes of the conference focused e-books and how to use social media tools to market your book.
As I walked around the exhibit hall and talked to the exhibitors and other attendees, it was very apparent that physical books were still the key focus of many people, and they had not yet made the transition to the e-book and social media mindset. Yes, everyone was talking about e-books and social media, but the exhibits and exhibitors were still in a physical book world.
The second half of the story is that Amazon reported last week that e-books are now outselling physical books on their website.
Which brings me to publishing and the publishing business model. To a relative newcomer like me, as the Amazon data makes clear, the publishing world is changing and it's changing rapidly.
Since the publishing model is changing, one would think that an important part of the content for an event such as Book Expo America would be a discussion of the changes occurring in the publishing model, and how a publisher could leverage this new publishing model to make money.
In my conversations with some exhibitors and industry experts, I asked many times, where was the discussion of the business side of the publishing business?
The answer was very interesting, and went something like this. The creative types who are involved in the publishing business would much rather talk about social media, cover design, and page layout, but are not really interested in talking about the business side of publishing. If you ran a social media session opposite a business of publishing session, the attendance would run 10 to 1 in favor of the social media session
Now the business side of publishing is not the sexy side of the business, however, making some money on the books that you publish, be they e-books or physical books, needs to be a primary consideration. If you are not making any money, you will be out of business pretty quick, and won't have the opportunity to work on all the creative things.
Even for the small publisher, it costs a minimum of $10,000 to produce a book, and the typical number for a good quality physical book is much closer to $25,000. Add to this some marketing expenses, some distribution costs, and publicity expenses, and you could very easily be looking at a $40,000 investment to bring a book to market. Even a simple e-book can cost five figures to produce after paying the editor and designers.
After making this investment, you will receive somewhere between $5 and $10 per book sold. To simply cover the costs of production, you will need to sell several thousand books.
All of this begs the question, if the business side of the publishing business is changing rapidly, and it costs a fair amount of money to publish a book, why is the focus only on social media and how to conduct a book signing, and not on how to produce a book that you can sell profitably?
The massive exhibit hall at the Javits was filled with book publishers, service providers, and others who in some way make a living from the book industry. Besides the author book signings and the publisher displays of their new titles, the key themes of the conference focused e-books and how to use social media tools to market your book.
As I walked around the exhibit hall and talked to the exhibitors and other attendees, it was very apparent that physical books were still the key focus of many people, and they had not yet made the transition to the e-book and social media mindset. Yes, everyone was talking about e-books and social media, but the exhibits and exhibitors were still in a physical book world.
The second half of the story is that Amazon reported last week that e-books are now outselling physical books on their website.
Which brings me to publishing and the publishing business model. To a relative newcomer like me, as the Amazon data makes clear, the publishing world is changing and it's changing rapidly.
Since the publishing model is changing, one would think that an important part of the content for an event such as Book Expo America would be a discussion of the changes occurring in the publishing model, and how a publisher could leverage this new publishing model to make money.
In my conversations with some exhibitors and industry experts, I asked many times, where was the discussion of the business side of the publishing business?
The answer was very interesting, and went something like this. The creative types who are involved in the publishing business would much rather talk about social media, cover design, and page layout, but are not really interested in talking about the business side of publishing. If you ran a social media session opposite a business of publishing session, the attendance would run 10 to 1 in favor of the social media session
Now the business side of publishing is not the sexy side of the business, however, making some money on the books that you publish, be they e-books or physical books, needs to be a primary consideration. If you are not making any money, you will be out of business pretty quick, and won't have the opportunity to work on all the creative things.
Even for the small publisher, it costs a minimum of $10,000 to produce a book, and the typical number for a good quality physical book is much closer to $25,000. Add to this some marketing expenses, some distribution costs, and publicity expenses, and you could very easily be looking at a $40,000 investment to bring a book to market. Even a simple e-book can cost five figures to produce after paying the editor and designers.
After making this investment, you will receive somewhere between $5 and $10 per book sold. To simply cover the costs of production, you will need to sell several thousand books.
All of this begs the question, if the business side of the publishing business is changing rapidly, and it costs a fair amount of money to publish a book, why is the focus only on social media and how to conduct a book signing, and not on how to produce a book that you can sell profitably?
Thursday, February 3, 2011
Why Entrepreneurs Matter
Why Entrepreneurs Matter
I had to smile during last week’s State of the Union address when the President mentioned “the true engine of job creation in this country will always be America’s businesses. But the government can create the conditions necessary for businesses to expand and hire more workers.”
This is the same message I’ve been preaching for years. The road to prosperity for individuals, and for the nation overall, depends on the willingness of individuals to put some of their own money on the table and do the hard work of planning and starting a business.
In the U.S., if you can think up a better product, be it a better mousetrap or an iPad, you are free to create a business to make and sell that product, and to reap the financial rewards of those efforts.
The contrast to starting a business in America jumped off the page when I read Landon Thomas’ article in the Sunday New York Times on the difficulties of starting a business in Greece. In Greece, rather than allowing the entrepreneur to identify a need and create a business to fill that need, there is often the extra step of having to convince some government official to let you have a license for that business, or to change some law to allow you to sell that product at all. As would be expected, the red tape element greatly discourages innovation and entrepreneurship.
Is it any wonder that America is still the land of opportunity for entrepreneurs. I have a feeling that before too long, a new generation of entrepreneurs, perhaps inspired by the President’s speech, perhaps driven by the necessity of earning a living after a corporate downsizing or outsourcing, will continue the process of creating businesses that once again grow the economy. And they will make some money in the process.
I had to smile during last week’s State of the Union address when the President mentioned “the true engine of job creation in this country will always be America’s businesses. But the government can create the conditions necessary for businesses to expand and hire more workers.”
This is the same message I’ve been preaching for years. The road to prosperity for individuals, and for the nation overall, depends on the willingness of individuals to put some of their own money on the table and do the hard work of planning and starting a business.
In the U.S., if you can think up a better product, be it a better mousetrap or an iPad, you are free to create a business to make and sell that product, and to reap the financial rewards of those efforts.
The contrast to starting a business in America jumped off the page when I read Landon Thomas’ article in the Sunday New York Times on the difficulties of starting a business in Greece. In Greece, rather than allowing the entrepreneur to identify a need and create a business to fill that need, there is often the extra step of having to convince some government official to let you have a license for that business, or to change some law to allow you to sell that product at all. As would be expected, the red tape element greatly discourages innovation and entrepreneurship.
Is it any wonder that America is still the land of opportunity for entrepreneurs. I have a feeling that before too long, a new generation of entrepreneurs, perhaps inspired by the President’s speech, perhaps driven by the necessity of earning a living after a corporate downsizing or outsourcing, will continue the process of creating businesses that once again grow the economy. And they will make some money in the process.
Thursday, January 20, 2011
Elevator Speeches That Get Attention!
I recently attended a train the trainer session for Kauffman Foundation’s FastTrac new business training programs. To start off the day, one of the first exercises was to stand and give your elevator speech to the group.
The idea behind an elevator speech is that if you get on an elevator with someone, and they ask “What do your do?” you should have a one or two sentence speech ready that you can deliver during a brief elevator ride that clearly and concisely describes your business.
There were probably 100 people in the room, all experienced business trainers and facilitators. Everyone provided their elevator speech. I remember only three.
One gentleman stood up and said he owned the largest organic cattle ranch in Texas. While this actually had nothing to do with small business development, it was a great opening line. It got everyone's attention. He then followed it up with his role as a business trainer, which unfortunately was much less memorable.
A second gentleman stood up and told everyone he ran a smoke detector testing company. His company would come to your house and push the little red button on your smoke detector to verify it was working. This was certainly an attention getter. Many people had a similar reaction - “What?” It turns out, that this particular gentleman actually ran a marketing business. He used this opening line about smoke detector testing to get you to pay attention to the true pitch about his marketing business.
A third gentleman stood up and told everyone he “Helped business owners retire as millionaires.” That's all he said. The next logical question for most of the people in the room was, “Okay now tell me how you do that.”
Getting to “Okay now tell me how you do that,” is the purpose of an elevator speech. You have a very, very limited amount of time to get someone's attention and you want to tell them what you do in such a way that they will ask for more information.
By doing so, you have turned a brief conversation to a more in-depth discussion of what you do, how you do it, and perhaps what you can do for them.
The elevator speech that I use is “I help people create profitable businesses.”
I provide this one sentence, and then say no more. This gives a person the opportunity to ask me the follow-up question – “How do you do that?”
This opens the door to explain how we work with businesses and individual entrepreneurs understand finance and the financial side of their business; how we can help them plan the business; and ultimately how we can help them turn their ideas into a viable business.
A great elevator speech is short, concise, and leads to the follow-up question "How do you do that?"
Friday, October 8, 2010
Start Up Cash
With the recession still lingering and the unemployment rate still between 9% and 10% in many places, starting a business of your own is an alternative that more and more people are considering.
A few weeks back, Wall Street Journal published an article on "Startups on a Shoestring," highlighting entrepreneurs who had started businesses with as little as $40.
I have always stressed that having enough cash is one of the keys to making a business work. Its really tough to start up a business on shoestring. More typically, its going to cost between $50,000 and $100,000 to start a business. That's why understanding finance and cash flow is so critical to managing a business
Sunday, April 5, 2009
Making Things or Making Money
The events of the last few weeks have me constantly reminded of a cartoon I saw many years ago.
In the cartoon, a professor is standing in front of a group of students in what looks like a business school class. The professor starts off the class by saying “Today we are not going to learn about making money. Rather, today we’re going to learn about making things.” The next frame shows a look of shock on the students in the back of the room. One student says to the other, “But I didn’t come here to learn about making things, I came here to learn about making money.” The other student replies, “I know, we can sue the school, we can make some money that way.”
The reason I’m reminded of this cartoon is the current discussion regarding a bailout of America’s automobile industry.
That seems to be the fight today. Are we interested in making things, or are we only interested in making money?
The one hand, there seems to be lots of money to be given to those who need it to help us make money. As I write this, hundreds of billions of dollars have been given to the likes of Citicorp, Bank of America, AIG, and Fannie Mae and Freddie Mac. These institutions are said to be too big to fail, and are said to be the key to keeping the credit flowing that keeps the housing market moving and facilitates business and consumer spending.
On the other hand, there seems to be a shortage of money available for those who make things. While you can argue the merits of lending money to GM and Chrysler because of a perception that the products are not competitive, or that they are too overleveraged, or too indebted to their pension funds, you cannot argue with the profound impact that these companies, and companies like them, have had on America’s prosperity.
These companies historically have taken raw materials and transformed these materials into valuable consumer products that have altered the lifestyle of the entire continent. These companies made their mark not by the manipulation of financial assumptions, but by engineering and process know how.
They have also done this while paying a decent wage to their workers, a wage that allowed those workers to buy homes and move into the middle class.
America developed into an advanced society not through financial wizardry, but through the ingenuity of a few and the hard work of many. If we are going to continue to be an advanced society, it seems that we will also need to focus on making things rather than just on making money.
In the cartoon, a professor is standing in front of a group of students in what looks like a business school class. The professor starts off the class by saying “Today we are not going to learn about making money. Rather, today we’re going to learn about making things.” The next frame shows a look of shock on the students in the back of the room. One student says to the other, “But I didn’t come here to learn about making things, I came here to learn about making money.” The other student replies, “I know, we can sue the school, we can make some money that way.”
The reason I’m reminded of this cartoon is the current discussion regarding a bailout of America’s automobile industry.
That seems to be the fight today. Are we interested in making things, or are we only interested in making money?
The one hand, there seems to be lots of money to be given to those who need it to help us make money. As I write this, hundreds of billions of dollars have been given to the likes of Citicorp, Bank of America, AIG, and Fannie Mae and Freddie Mac. These institutions are said to be too big to fail, and are said to be the key to keeping the credit flowing that keeps the housing market moving and facilitates business and consumer spending.
On the other hand, there seems to be a shortage of money available for those who make things. While you can argue the merits of lending money to GM and Chrysler because of a perception that the products are not competitive, or that they are too overleveraged, or too indebted to their pension funds, you cannot argue with the profound impact that these companies, and companies like them, have had on America’s prosperity.
These companies historically have taken raw materials and transformed these materials into valuable consumer products that have altered the lifestyle of the entire continent. These companies made their mark not by the manipulation of financial assumptions, but by engineering and process know how.
They have also done this while paying a decent wage to their workers, a wage that allowed those workers to buy homes and move into the middle class.
America developed into an advanced society not through financial wizardry, but through the ingenuity of a few and the hard work of many. If we are going to continue to be an advanced society, it seems that we will also need to focus on making things rather than just on making money.
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