There are a growing number of misconceptions about the place of social media networking and business promotion. It is important to address these concerns as studies show that more and more businesses are joining the groundswell of those companies that are moving to establish a presence in these networks.

• It allows companies to market online in a cost effective way.

• It utilizes few resources beyond the time needed to maintain it.

• It has a successful and proven record of being able to generate leads.

• It allows smaller businesses to keep up with what their larger competitors are doing, in their industry.

• It allows businesses to have an online dialog about what they can offer to their potential customers.

Article marketing is fast becoming a marketing strategy on the Internet. Article marketing is defined as a method of advertising where business enterprises write articles featuring a topic related in the industry they are competing in. Well-written articles are effective for building website traffic, bringing in potential clients and leads into the website, and improving the business’s credibility.

Differentiate your article from competitor articles

Use a targeted submission campaign for your articles

Choose the best places to submit your articles

Traditional Planning Methods

The traditional way for government organizations to plan is for a group of people, usually executives/management, but sometimes including employees, to get together for some period of time each year. Generally, inadequate time is allocated to the exercise, but if it is completed, it results in a document that contains a mission statement, broad organizational goals, and other elements as is deemed appropriate. Then, the plan is usually hidden away somewhere, never to be seen again. Traditional methods yield traditional results. As a wise man once said “If you keep doing what you have been doing, you will get what you have always got”. It needn’t be this way.

Reconceptualizing Strategic Planning

Planning should be considered as a blueprint for change. The plan should be the basis for introducing controlled change into an organization so it can adapt to changing times. By anticipating shifting demands, the plan serves the purpose of allowing the organization to control its own direction, rather than waiting until political forces demand change (and demand change NOW). In addition, the plan allows for consistent monitoring of success, and re-examination of the degree to which organizational resou

rces should be structured and allocated to achieve future goals.

But, if we look at strategic planning in this light, as a blueprint for change, we also need to consider that any organization has built-in inertia.. the tendency to keep on doing what one has been doing. On its own, the strategic planning process, as traditionally undertaken, is insufficient to overcome this inertia. Other forces need to come into play if the plan, and proposed changes get implemented.

Leadership – The Key Force

In the context of strategic planning, leadership means a number of things. We can outline the role of leadership in the following ways, keeping in mind that leadership may come from appointed leaders (management and executive) and from the ranks

1. Those in leadership roles ensure that as many members of the organization as possible buy into the values, mission, and broad organizational goals. There are two components to this function. First, leaders manage the perceptions of staff with respect to the planning process. Remember that most people have experienced the “plan-in-the-drawer” syndrome, where effort expended in planning is seen as wasted when the plan is ignored. Prior to the planning process, leaders must emphasize that THIS TIME, things will be different.

Second, leaders manage the planning process so that staff feel that they have adequate input into the process, that they are heard, and their values and visions are incorporated into the final plan and its implementation. Specifically, leaders arrange things so that the process is open, and conforms to accepted rules of communication. That may mean hiring an external consultant to orchestrate the planning sessions. It will certainly mean that rules get established to guide participation. Everyone who wants to participate should have the opportunity, and even reticent staff should be gently encouraged to involve themselves.

2. While managing perceptions of the planning process is important, the critical role of leadership occurs after the plan has been completed. Leaders must treat the planning results as the “organizational signposts that guide behaviour and decision making”. After all, nobody is going to take a plan seriously if the formal leaders ignore it, or never refer to it again. If you are serious about using strategic planning as a tool for organizational success, consider some of the following actions.

A. When working with staff to set individual objectives, be sure to mention how the individual objectives will contribute to the achievement of the mission and organizational goals as outlined in the strategic plan. Make sure that the employee is familiar with the plan when individual objectives are set.

In addition, at each meeting with each employee, work with the employee to help him/her determine how the values outlined in the strategic plan apply to them. In other words, given the particular values, strategic goals and mission statement how is the employee to behave or make decisions.

B. Once the strategic plan has been completed, the formal leader of the organization (and perhaps others) should present and discuss the plan with the up-line manager or executive. It is NOT sufficient to send a copy. Because you will need up-line support to implement the plan, you will need their commitment, and commitment will only come from discussion and explanation of the plan.

C. At staff meetings, when decisions are required, explain how the strategic plan is used, or is to be used to make decisions. If you are the manager communicating a decision you have made, explain your rationale in light of the mission, values and goals expressed in the plan. If you are using a participative decision-making process, help staff refocus on these components of the plan, so that they can be used to guide decision-making.

D. When doing performance reviews with staff, ask the individual to explain how his or her actions are consistent with the elements of the plan. How has their action contributed to organizational goals? Has their behaviour been consistent with organizational values? What needs to change so that the individual can further contribute to implementing the plan? Consider recognizing contributions to achievement of the plan, even if the individual did not have specific responsibility as outlined in their individual objectives. And, when setting future objectives, consider writing an objective that refers to the values expressed in the plan. For example: “Will act in accordance with the organizational values expressed in the strategic plan”. If you go this route, make sure -that~the implications of these values are clear to the employee in terms of his or her behaviour.

3. A final role of leadership is to create more leaders. One goal that formal leaders (executives, managers) can set for themselves is to encourage down-line employees to take on some of the leadership roles outlined above. This can be particularly effective in decision-making. The ideal situation is for staff to internalize the plan to the extent that some take on the role of reminding people of the plan, and its relevance to any given decision-making process. Cultivate leaders in your organization by giving increased responsibility, and encouraging this kind of leadership behavior.

Conclusion

Leadership, regardless of when it comes from formally appointed leaders, or Informal leaders, provides the link between planning and doing. Effective leadership helps alter perceptions about strategic planning, and the organization itself, helping to overcome inertia, the tendency to keep things the same.

Without leadership, most strategic plans will end up as dead pieces of paper. Most importantly, when planning occurs without leadership, cynicism increases when staff see that the plan is being ignored, or even violated. The outcome of this is that formal leaders suffer a loss of credibility.

The problem in these types of situations is as a salesperson, you’ve invested time and effort and the last thing you want to do is quit and walk away.  You are thinking, “The prospect could be very close to saying  ‘yes.’”  It’s either your pride that doesn’t allow you to walk away or it’s the fear of another week with no sales under your belt. 

The answer is in being able to determine if the prospect is truly a prospect or nothing more than a suspect in disguise.  I know the number one solution is to get the customer involved in the buying process.  That’s right – get them involved. If they’re not willing to be involved, then they’re just using you either for information or because they are afraid to tell you “no.”  You can get them involved by asking them to do something for you after you’ve left. If a customer is truly interested, they’ll do something for you. If they’re not interested, they won’t.  It’s that simple.

Next time a customer stalls out on you, ask them as a next step to review something for you. It might be a report you’re going to email to them or it might be something on a website. The key is to see if they will provide some input to you.  This simple activity is one of the best ways to measure how serious a prospect is in doing business with you.  Someone who is serious will do what you ask them to; someone who is not won’t.  Their response to what you ask them to do will not only give you a sense of their level of commitment, but also may give them a quick “out” to indeed tell you they are not interested.  Either way, it allows you to move forward.  Either they are a serious prospect or it’s time to drop them and move on.

Another great tool to measure the seriousness of a prospect is to ask them to share with you some proprietary information.  It might be a question you ask regarding the strategic focus of their business or how their sales are for this month.  It can be almost anything, but when you ask them a question that requires them to reveal something that is not known outside the company, you will quickly determine if the customer has confidence in you.  Since confidence is what customers are really buying, then a key to knowing if a sale is going to occur is if they will share with you something of proprietary nature.

Keep in mind that neither of these two techniques is 100% foolproof in determining if a customer is serious. This method was  found  to be the most time efficient method to separate prospects from suspects. In the end, the only sales you’re going to close are going to be with prospects who show interest in what you’re providing and confidence in how you’re providing it.

The problem for a locally based business is the huge size of the Internet. A locally based website often gets buried deep in search engines, if they are even there at all. Larger national and international sites dominate the best broad search terms. Localized search marketing requires a different approach.

If your business isn’t a sprawling national franchise, the possibility of being found by someone searching for you that could be in the next office, is slim. Google will not help. Nor will Yahoo or Bing be of any assistance. To be found by the guy down the street a Local Search Engine is the only way to approach local visibility. As a local business, local traffic is the only thing that advertising dollars should be focused on. The business website you have up can be doing wonders for your company image on the net but is it bringing in local traffic? The numbers aren’t pretty here.

Yes, you can find your site on page one of Google. Just type in the site name and there it is; like magic. Now how do you pass along that URL (link) to all those potential customers in a ten mile radius around your business? That’s a tough one. It’s just not going to happen. No matter how specific a search consumers try, your business will be buried in the detritus. With one well placed ad in a value added vertical search engine, a local business can actually generate real traffic that pay with real money. Scratching your head, you ask what the heck is a “value added vertical search engine”?

Glad you asked! A value added vertical search engine usually involves a company whose sole intention is to provide industry specific searches on a local level. That means if your business is Plumbing then searches will only look for local Plumbers. This is usually broken down by zip code or mileage. The value added part usually involves bonuses like mapping within the ad leading to your business. Possibly a customized ad with flattering graphics and detailed summary. We’ve found the best companies out there will give a business the ability to edit their own ad dynamically. They might even provide you with coupon producing capabilities. These coupons can be found and printed right from the ad! This industry is in its infancy and good local search companies are still far and in between. To be sure you’re connecting with the right company, look for those value added features mentioned above. A company which can provide these things has done their homework and has a technological edge over their competitors.

So there you have it. If you’re a small to medium size business and have questions on how to spend your precious advertising dollar, local search is a no brainer. If you compare some of your choices it becomes very clear that the world is changing and to be a success, you’ve got to change with it. If you were paying $500 or more a month for any media advertising including paper based ads like Yellow Pages, you’re throwing away your money. Upwards of 80% of the population now uses the web for local searches. Many paper based companies are fading into the sunset and taking their subscribers with them! The future is now so get online and be seen!

A few companies out there stood above the rest. The one that seemed to provide the most bang for your buck is a young company based in Tustin, California called MapWide.Com. In looking at what they have to offer, the valued added items mentioned above have all been covered and more. They provide industry specific listings for every zip code in the United States. That means their search engine will probe your neighborhood and respond with only the vendors local to whomever is doing the search. The pricing plans are considerably lower than some of their more popular competitors.

Lastly, think about what’s going on in today’s business environment and don’t be afraid to jump in the fray. To be static in any aspect of your business is to give your industry rivals an opportunity to pull your customers out from under you. Be dynamic and make technology work for you.

Author: Chris Borowski

You need three things to create a successful startup: to start with good people, to make something customers actually want, and to spend as little money as possible. Most startups that fail do it because they fail at one of these. A startup that does all three will probably succeed.

And that’s kind of exciting, when you think about it, because all three are doable. Hard, but doable. And since a startup that succeeds ordinarily makes its founders rich, that implies getting rich is doable too. Hard, but doable.

If there is one message I’d like to get across about startups, that’s it. There is no magically difficult step that requires brilliance to solve.

The Idea

In particular, you don’t need a brilliant idea to start a startup around. The way a startup makes money is to offer people better technology than they have now. But what people have now is often so bad that it doesn’t take brilliance to do better.

Google’s plan, for example, was simply to create a search site that didn’t suck. They had three new ideas: index more of the Web, use links to rank search results, and have clean, simple web pages with unintrusive keyword-based ads. Above all, they were determined to make a site that was good to use. No doubt there are great technical tricks within Google, but the overall plan was straightforward. And while they probably have bigger ambitions now, this alone brings them a billion dollars a year.

There are plenty of other areas that are just as backward as search was before Google. I can think of several heuristics for generating ideas for startups, but most reduce to this: look at something people are trying to do, and figure out how to do it in a way that doesn’t suck.

For example, dating sites currently suck far worse than search did before Google. They all use the same simple-minded model. They seem to have approached the problem by thinking about how to do database matches instead of how dating works in the real world. An undergrad could build something better as a class project. And yet there’s a lot of money at stake. Online dating is a valuable business now, and it might be worth a hundred times as much if it worked.

An idea for a startup, however, is only a beginning. A lot of would-be startup founders think the key to the whole process is the initial idea, and from that point all you have to do is execute. Venture capitalists know better. If you go to VC firms with a brilliant idea that you’ll tell them about if they sign a nondisclosure agreement, most will tell you to get lost. That shows how much a mere idea is worth. The market price is less than the inconvenience of signing an NDA.

Another sign of how little the initial idea is worth is the number of startups that change their plan en route. Microsoft’s original plan was to make money selling programming languages, of all things. Their current business model didn’t occur to them until IBM dropped it in their lap five years later.

Ideas for startups are worth something, certainly, but the trouble is, they’re not transferrable. They’re not something you could hand to someone else to execute. Their value is mainly as starting points: as questions for the people who had them to continue thinking about.

What matters is not ideas, but the people who have them. Good people can fix bad ideas, but good ideas can’t save bad people.

People

What do I mean by good people? One of the best tricks I learned during our startup was a rule for deciding who to hire. Could you describe the person as an animal? It might be hard to translate that into another language, but I think everyone in the US knows what it means. It means someone who takes their work a little too seriously; someone who does what they do so well that they pass right through professional and cross over into obsessive.

What it means specifically depends on the job: a salesperson who just won’t take no for an answer; a hacker who will stay up till 4:00 AM rather than go to bed leaving code with a bug in it; a PR person who will cold-call New York Times reporters on their cell phones; a graphic designer who feels physical pain when something is two millimeters out of place.

Almost everyone who worked for us was an animal at what they did. The woman in charge of sales was so tenacious that I used to feel sorry for potential customers on the phone with her. You could sense them squirming on the hook, but you knew there would be no rest for them till they’d signed up.

If you think about people you know, you’ll find the animal test is easy to apply. Call the person’s image to mind and imagine the sentence “so-and-so is an animal.” If you laugh, they’re not. You don’t need or perhaps even want this quality in big companies, but you need it in a startup.

For programmers we had three additional tests. Was the person genuinely smart? If so, could they actually get things done? And finally, since a few good hackers have unbearable personalities, could we stand to have them around?

That last test filters out surprisingly few people. We could bear any amount of nerdiness if someone was truly smart. What we couldn’t stand were people with a lot of attitude. But most of those weren’t truly smart, so our third test was largely a restatement of the first.

When nerds are unbearable it’s usually because they’re trying too hard to seem smart. But the smarter they are, the less pressure they feel to act smart. So as a rule you can recognize genuinely smart people by their ability to say things like “I don’t know,” “Maybe you’re right,” and “I don’t understand x well enough.”

This technique doesn’t always work, because people can be influenced by their environment. In the MIT CS department, there seems to be a tradition of acting like a brusque know-it-all. I’m told it derives ultimately from Marvin Minsky, in the same way the classic airline pilot manner is said to derive from Chuck Yeager. Even genuinely smart people start to act this way there, so you have to make allowances.

It helped us to have Robert Morris, who is one of the readiest to say “I don’t know” of anyone I’ve met. (At least, he was before he became a professor at MIT.) No one dared put on attitude around Robert, because he was obviously smarter than they were and yet had zero attitude himself.

Like most startups, ours began with a group of friends, and it was through personal contacts that we got most of the people we hired. This is a crucial difference between startups and big companies. Being friends with someone for even a couple days will tell you more than companies could ever learn in interviews.

It’s no coincidence that startups start around universities, because that’s where smart people meet. It’s not what people learn in classes at MIT and Stanford that has made technology companies spring up around them. They could sing campfire songs in the classes so long as admissions worked the same.

If you start a startup, there’s a good chance it will be with people you know from college or grad school. So in theory you ought to try to make friends with as many smart people as you can in school, right? Well, no. Don’t make a conscious effort to schmooze; that doesn’t work well with hackers.

What you should do in college is work on your own projects. Hackers should do this even if they don’t plan to start startups, because it’s the only real way to learn how to program. In some cases you may collaborate with other students, and this is the best way to get to know good hackers. The project may even grow into a startup. But once again, I wouldn’t aim too directly at either target. Don’t force things; just work on stuff you like with people you like.

Ideally you want between two and four founders. It would be hard to start with just one. One person would find the moral weight of starting a company hard to bear. Even Bill Gates, who seems to be able to bear a good deal of moral weight, had to have a co-founder. But you don’t want so many founders that the company starts to look like a group photo. Partly because you don’t need a lot of people at first, but mainly because the more founders you have, the worse disagreements you’ll have. When there are just two or three founders, you know you have to resolve disputes immediately or perish. If there are seven or eight, disagreements can linger and harden into factions. You don’t want mere voting; you need unanimity.

In a technology startup, which most startups are, the founders should include technical people. During the Internet Bubble there were a number of startups founded by business people who then went looking for hackers to create their product for them. This doesn’t work well. Business people are bad at deciding what to do with technology, because they don’t know what the options are, or which kinds of problems are hard and which are easy. And when business people try to hire hackers, they can’t tell which ones are good. Even other hackers have a hard time doing that. For business people it’s roulette.

Do the founders of a startup have to include business people? That depends. We thought so when we started ours, and we asked several people who were said to know about this mysterious thing called “business” if they would be the president. But they all said no, so I had to do it myself. And what I discovered was that business was no great mystery. It’s not something like physics or medicine that requires extensive study. You just try to get people to pay you for stuff.

I think the reason I made such a mystery of business was that I was disgusted by the idea of doing it. I wanted to work in the pure, intellectual world of software, not deal with customers’ mundane problems. People who don’t want to get dragged into some kind of work often develop a protective incompetence at it. Paul Erdos was particularly good at this. By seeming unable even to cut a grapefruit in half (let alone go to the store and buy one), he forced other people to do such things for him, leaving all his time free for math. Erdos was an extreme case, but most husbands use the same trick to some degree.

Once I was forced to discard my protective incompetence, I found that business was neither so hard nor so boring as I feared. There are esoteric areas of business that are quite hard, like tax law or the pricing of derivatives, but you don’t need to know about those in a startup. All you need to know about business to run a startup are commonsense things people knew before there were business schools, or even universities.

If you work your way down the Forbes 400 making an x next to the name of each person with an MBA, you’ll learn something important about business school. After Warren Buffett, you don’t hit another MBA till number 22, Phil Knight, the CEO of Nike. There are only 5 MBAs in the top 50. What you notice in the Forbes 400 are a lot of people with technical backgrounds. Bill Gates, Steve Jobs, Larry Ellison, Michael Dell, Jeff Bezos, Gordon Moore. The rulers of the technology business tend to come from technology, not business. So if you want to invest two years in something that will help you succeed in business, the evidence suggests you’d do better to learn how to hack than get an MBA.

There is one reason you might want to include business people in a startup, though: because you have to have at least one person willing and able to focus on what customers want. Some believe only business people can do this– that hackers can implement software, but not design it. That’s nonsense. There’s nothing about knowing how to program that prevents hackers from understanding users, or about not knowing how to program that magically enables business people to understand them.

If you can’t understand users, however, you should either learn how or find a co-founder who can. That is the single most important issue for technology startups, and the rock that sinks more of them than anything else.

What Customers Want

It’s not just startups that have to worry about this. I think most businesses that fail do it because they don’t give customers what they want. Look at restaurants. A large percentage fail, about a quarter in the first year. But can you think of one restaurant that had really good food and went out of business?

Restaurants with great food seem to prosper no matter what. A restaurant with great food can be expensive, crowded, noisy, dingy, out of the way, and even have bad service, and people will keep coming. It’s true that a restaurant with mediocre food can sometimes attract customers through gimmicks. But that approach is very risky. It’s more straightforward just to make the food good.

It’s the same with technology. You hear all kinds of reasons why startups fail. But can you think of one that had a massively popular product and still failed?

In nearly every failed startup, the real problem was that customers didn’t want the product. For most, the cause of death is listed as “ran out of funding,” but that’s only the immediate cause. Why couldn’t they get more funding? Probably because the product was a dog, or never seemed likely to be done, or both.

When I was trying to think of the things every startup needed to do, I almost included a fourth: get a version 1 out as soon as you can. But I decided not to, because that’s implicit in making something customers want. The only way to make something customers want is to get a prototype in front of them and refine it based on their reactions.

The other approach is what I call the “Hail Mary” strategy. You make elaborate plans for a product, hire a team of engineers to develop it (people who do this tend to use the term “engineer” for hackers), and then find after a year that you’ve spent two million dollars to develop something no one wants. This was not uncommon during the Bubble, especially in companies run by business types, who thought of software development as something terrifying that therefore had to be carefully planned.

We never even considered that approach. As a Lisp hacker, I come from the tradition of rapid prototyping. I would not claim (at least, not here) that this is the right way to write every program, but it’s certainly the right way to write software for a startup. In a startup, your initial plans are almost certain to be wrong in some way, and your first priority should be to figure out where. The only way to do that is to try implementing them.

Like most startups, we changed our plan on the fly. At first we expected our customers to be Web consultants. But it turned out they didn’t like us, because our software was easy to use and we hosted the site. It would be too easy for clients to fire them. We also thought we’d be able to sign up a lot of catalog companies, because selling online was a natural extension of their existing business. But in 1996 that was a hard sell. The middle managers we talked to at catalog companies saw the Web not as an opportunity, but as something that meant more work for them.

We did get a few of the more adventurous catalog companies. Among them was Frederick’s of Hollywood, which gave us valuable experience dealing with heavy loads on our servers. But most of our users were small, individual merchants who saw the Web as an opportunity to build a business. Some had retail stores, but many only existed online. And so we changed direction to focus on these users. Instead of concentrating on the features Web consultants and catalog companies would want, we worked to make the software easy to use.

I learned something valuable from that. It’s worth trying very, very hard to make technology easy to use. Hackers are so used to computers that they have no idea how horrifying software seems to normal people. Stephen Hawking’s editor told him that every equation he included in his book would cut sales in half. When you work on making technology easier to use, you’re riding that curve up instead of down. A 10% improvement in ease of use doesn’t just increase your sales 10%. It’s more likely to double your sales.

How do you figure out what customers want? Watch them. One of the best places to do this was at trade shows. Trade shows didn’t pay as a way of getting new customers, but they were worth it as market research. We didn’t just give canned presentations at trade shows. We used to show people how to build real, working stores. Which meant we got to watch as they used our software, and talk to them about what they needed.

No matter what kind of startup you start, it will probably be a stretch for you, the founders, to understand what users want. The only kind of software you can build without studying users is the sort for which you are the typical user. But this is just the kind that tends to be open source: operating systems, programming languages, editors, and so on. So if you’re developing technology for money, you’re probably not going to be developing it for people like you. Indeed, you can use this as a way to generate ideas for startups: what do people who are not like you want from technology?

When most people think of startups, they think of companies like Apple or Google. Everyone knows these, because they’re big consumer brands. But for every startup like that, there are twenty more that operate in niche markets or live quietly down in the infrastructure. So if you start a successful startup, odds are you’ll start one of those.

Another way to say that is, if you try to start the kind of startup that has to be a big consumer brand, the odds against succeeding are steeper. The best odds are in niche markets. Since startups make money by offering people something better than they had before, the best opportunities are where things suck most. And it would be hard to find a place where things suck more than in corporate IT departments. You would not believe the amount of money companies spend on software, and the crap they get in return. This imbalance equals opportunity.

If you want ideas for startups, one of the most valuable things you could do is find a middle-sized non-technology company and spend a couple weeks just watching what they do with computers. Most good hackers have no more idea of the horrors perpetrated in these places than rich Americans do of what goes on in Brazilian slums.

Start by writing software for smaller companies, because it’s easier to sell to them. It’s worth so much to sell stuff to big companies that the people selling them the crap they currently use spend a lot of time and money to do it. And while you can outhack Oracle with one frontal lobe tied behind your back, you can’t outsell an Oracle salesman. So if you want to win through better technology, aim at smaller customers.

They’re the more strategically valuable part of the market anyway. In technology, the low end always eats the high end. It’s easier to make an inexpensive product more powerful than to make a powerful product cheaper. So the products that start as cheap, simple options tend to gradually grow more powerful till, like water rising in a room, they squash the “high-end” products against the ceiling. Sun did this to mainframes, and Intel is doing it to Sun. Microsoft Word did it to desktop publishing software like Interleaf and Framemaker. Mass-market digital cameras are doing it to the expensive models made for professionals. Avid did it to the manufacturers of specialized video editing systems, and now Apple is doing it to Avid. Henry Ford did it to the car makers that preceded him. If you build the simple, inexpensive option, you’ll not only find it easier to sell at first, but you’ll also be in the best position to conquer the rest of the market.

It’s very dangerous to let anyone fly under you. If you have the cheapest, easiest product, you’ll own the low end. And if you don’t, you’re in the crosshairs of whoever does.

Raising Money

To make all this happen, you’re going to need money. Some startups have been self-funding– Microsoft for example– but most aren’t. I think it’s wise to take money from investors. To be self-funding, you have to start as a consulting company, and it’s hard to switch from that to a product company.

Financially, a startup is like a pass/fail course. The way to get rich from a startup is to maximize the company’s chances of succeeding, not to maximize the amount of stock you retain. So if you can trade stock for something that improves your odds, it’s probably a smart move.

To most hackers, getting investors seems like a terrifying and mysterious process. Actually it’s merely tedious. I’ll try to give an outline of how it works.

The first thing you’ll need is a few tens of thousands of dollars to pay your expenses while you develop a prototype. This is called seed capital. Because so little money is involved, raising seed capital is comparatively easy– at least in the sense of getting a quick yes or no.

Usually you get seed money from individual rich people called “angels.” Often they’re people who themselves got rich from technology. At the seed stage, investors don’t expect you to have an elaborate business plan. Most know that they’re supposed to decide quickly. It’s not unusual to get a check within a week based on a half-page agreement.

We started Viaweb with $10,000 of seed money from our friend Julian. But he gave us a lot more than money. He’s a former CEO and also a corporate lawyer, so he gave us a lot of valuable advice about business, and also did all the legal work of getting us set up as a company. Plus he introduced us to one of the two angel investors who supplied our next round of funding.

Some angels, especially those with technology backgrounds, may be satisfied with a demo and a verbal description of what you plan to do. But many will want a copy of your business plan, if only to remind themselves what they invested in.

Our angels asked for one, and looking back, I’m amazed how much worry it caused me. “Business plan” has that word “business” in it, so I figured it had to be something I’d have to read a book about business plans to write. Well, it doesn’t. At this stage, all most investors expect is a brief description of what you plan to do and how you’re going to make money from it, and the resumes of the founders. If you just sit down and write out what you’ve been saying to one another, that should be fine. It shouldn’t take more than a couple hours, and you’ll probably find that writing it all down gives you more ideas about what to do.

For the angel to have someone to make the check out to, you’re going to have to have some kind of company. Merely incorporating yourselves isn’t hard. The problem is, for the company to exist, you have to decide who the founders are, and how much stock they each have. If there are two founders with the same qualifications who are both equally committed to the business, that’s easy. But if you have a number of people who are expected to contribute in varying degrees, arranging the proportions of stock can be hard. And once you’ve done it, it tends to be set in stone.

I have no tricks for dealing with this problem. All I can say is, try hard to do it right. I do have a rule of thumb for recognizing when you have, though. When everyone feels they’re getting a slightly bad deal, that they’re doing more than they should for the amount of stock they have, the stock is optimally apportioned.

There is more to setting up a company than incorporating it, of course: insurance, business license, unemployment compensation, various things with the IRS. I’m not even sure what the list is, because we, ah, skipped all that. When we got real funding near the end of 1996, we hired a great CFO, who fixed everything retroactively. It turns out that no one comes and arrests you if you don’t do everything you’re supposed to when starting a company. And a good thing too, or a lot of startups would never get started.

It can be dangerous to delay turning yourself into a company, because one or more of the founders might decide to split off and start another company doing the same thing. This does happen. So when you set up the company, as well as as apportioning the stock, you should get all the founders to sign something agreeing that everyone’s ideas belong to this company, and that this company is going to be everyone’s only job.

[If this were a movie, ominous music would begin here.]

While you’re at it, you should ask what else they’ve signed. One of the worst things that can happen to a startup is to run into intellectual property problems. We did, and it came closer to killing us than any competitor ever did.

As we were in the middle of getting bought, we discovered that one of our people had, early on, been bound by an agreement that said all his ideas belonged to the giant company that was paying for him to go to grad school. In theory, that could have meant someone else owned big chunks of our software. So the acquisition came to a screeching halt while we tried to sort this out. The problem was, since we’d been about to be acquired, we’d allowed ourselves to run low on cash. Now we needed to raise more to keep going. But it’s hard to raise money with an IP cloud over your head, because investors can’t judge how serious it is.

Our existing investors, knowing that we needed money and had nowhere else to get it, at this point attempted certain gambits which I will not describe in detail, except to remind readers that the word “angel” is a metaphor. The founders thereupon proposed to walk away from the company, after giving the investors a brief tutorial on how to administer the servers themselves. And while this was happening, the acquirers used the delay as an excuse to welch on the deal.

Miraculously it all turned out ok. The investors backed down; we did another round of funding at a reasonable valuation; the giant company finally gave us a piece of paper saying they didn’t own our software; and six months later we were bought by Yahoo for much more than the earlier acquirer had agreed to pay. So we were happy in the end, though the experience probably took several years off my life.

Don’t do what we did. Before you consummate a startup, ask everyone about their previous IP history.

Once you’ve got a company set up, it may seem presumptuous to go knocking on the doors of rich people and asking them to invest tens of thousands of dollars in something that is really just a bunch of guys with some ideas. But when you look at it from the rich people’s point of view, the picture is more encouraging. Most rich people are looking for good investments. If you really think you have a chance of succeeding, you’re doing them a favor by letting them invest. Mixed with any annoyance they might feel about being approached will be the thought: are these guys the next Google?

Usually angels are financially equivalent to founders. They get the same kind of stock and get diluted the same amount in future rounds. How much stock should they get? That depends on how ambitious you feel. When you offer x percent of your company for y dollars, you’re implicitly claiming a certain value for the whole company. Venture investments are usually described in terms of that number. If you give an investor new shares equal to 5% of those already outstanding in return for $100,000, then you’ve done the deal at a pre-money valuation of $2 million.

How do you decide what the value of the company should be? There is no rational way. At this stage the company is just a bet. I didn’t realize that when we were raising money. Julian thought we ought to value the company at several million dollars. I thought it was preposterous to claim that a couple thousand lines of code, which was all we had at the time, were worth several million dollars. Eventually we settled on one millon, because Julian said no one would invest in a company with a valuation any lower.

What I didn’t grasp at the time was that the valuation wasn’t just the value of the code we’d written so far. It was also the value of our ideas, which turned out to be right, and of all the future work we’d do, which turned out to be a lot.

The next round of funding is the one in which you might deal with actual venture capital firms. But don’t wait till you’ve burned through your last round of funding to start approaching them. VCs are slow to make up their minds. They can take months. You don’t want to be running out of money while you’re trying to negotiate with them.

Getting money from an actual VC firm is a bigger deal than getting money from angels. The amounts of money involved are larger, millions usually. So the deals take longer, dilute you more, and impose more onerous conditions.

Sometimes the VCs want to install a new CEO of their own choosing. Usually the claim is that you need someone mature and experienced, with a business background. Maybe in some cases this is true. And yet Bill Gates was young and inexperienced and had no business background, and he seems to have done ok. Steve Jobs got booted out of his own company by someone mature and experienced, with a business background, who then proceeded to ruin the company. So I think people who are mature and experienced, with a business background, may be overrated. We used to call these guys “newscasters,” because they had neat hair and spoke in deep, confident voices, and generally didn’t know much more than they read on the teleprompter.

We talked to a number of VCs, but eventually we ended up financing our startup entirely with angel money. The main reason was that we feared a brand-name VC firm would stick us with a newscaster as part of the deal. That might have been ok if he was content to limit himself to talking to the press, but what if he wanted to have a say in running the company? That would have led to disaster, because our software was so complex. We were a company whose whole m.o. was to win through better technology. The strategic decisions were mostly decisions about technology, and we didn’t need any help with those.

This was also one reason we didn’t go public. Back in 1998 our CFO tried to talk me into it. In those days you could go public as a dogfood portal, so as a company with a real product and real revenues, we might have done well. But I feared it would have meant taking on a newscaster– someone who, as they say, “can talk Wall Street’s language.”

I’m happy to see Google is bucking that trend. They didn’t talk Wall Street’s language when they did their IPO, and Wall Street didn’t buy. And now Wall Street is collectively kicking itself. They’ll pay attention next time. Wall Street learns new languages fast when money is involved.

You have more leverage negotiating with VCs than you realize. The reason is other VCs. I know a number of VCs now, and when you talk to them you realize that it’s a seller’s market. Even now there is too much money chasing too few good deals.

VCs form a pyramid. At the top are famous ones like Sequoia and Kleiner Perkins, but beneath those are a huge number you’ve never heard of. What they all have in common is that a dollar from them is worth one dollar. Most VCs will tell you that they don’t just provide money, but connections and advice. If you’re talking to Vinod Khosla or John Doerr or Mike Moritz, this is true. But such advice and connections can come very expensive. And as you go down the food chain the VCs get rapidly dumber. A few steps down from the top you’re basically talking to bankers who’ve picked up a few new vocabulary words from reading Wired. (Does your product useXML?) So I’d advise you to be skeptical about claims of experience and connections. Basically, a VC is a source of money. I’d be inclined to go with whoever offered the most money the soonest with the least strings attached.

You may wonder how much to tell VCs. And you should, because some of them may one day be funding your competitors. I think the best plan is not to be overtly secretive, but not to tell them everything either. After all, as most VCs say, they’re more interested in the people than the ideas. The main reason they want to talk about your idea is to judge you, not the idea. So as long as you seem like you know what you’re doing, you can probably keep a few things back from them.

Talk to as many VCs as you can, even if you don’t want their money, because a) they may be on the board of someone who will buy you, and b) if you seem impressive, they’ll be discouraged from investing in your competitors. The most efficient way to reach VCs, especially if you only want them to know about you and don’t want their money, is at the conferences that are occasionally organized for startups to present to them.

Not Spending It

When and if you get an infusion of real money from investors, what should you do with it? Not spend it, that’s what. In nearly every startup that fails, the proximate cause is running out of money. Usually there is something deeper wrong. But even a proximate cause of death is worth trying hard to avoid.

During the Bubble many startups tried to “get big fast.” Ideally this meant getting a lot of customers fast. But it was easy for the meaning to slide over into hiring a lot of people fast.

Of the two versions, the one where you get a lot of customers fast is of course preferable. But even that may be overrated. The idea is to get there first and get all the users, leaving none for competitors. But I think in most businesses the advantages of being first to market are not so overwhelmingly great. Google is again a case in point. When they appeared it seemed as if search was a mature market, dominated by big players who’d spent millions to build their brands: Yahoo, Lycos, Excite, Infoseek, Altavista, Inktomi. Surely 1998 was a little late to arrive at the party.

But as the founders of Google knew, brand is worth next to nothing in the search business. You can come along at any point and make something better, and users will gradually seep over to you. As if to emphasize the point, Google never did any advertising. They’re like dealers; they sell the stuff, but they know better than to use it themselves.

The competitors Google buried would have done better to spend those millions improving their software. Future startups should learn from that mistake. Unless you’re in a market where products are as undifferentiated as cigarettes or vodka or laundry detergent, spending a lot on brand advertising is a sign of breakage. And few if any Web businesses are so undifferentiated. The dating sites are running big ad campaigns right now, which is all the more evidence they’re ripe for the picking. (Fee, fie, fo, fum, I smell a company run by marketing guys.)

We were compelled by circumstances to grow slowly, and in retrospect it was a good thing. The founders all learned to do every job in the company. As well as writing software, I had to do sales and customer support. At sales I was not very good. I was persistent, but I didn’t have the smoothness of a good salesman. My message to potential customers was: you’d be stupid not to sell online, and if you sell online you’d be stupid to use anyone else’s software. Both statements were true, but that’s not the way to convince people.

I was great at customer support though. Imagine talking to a customer support person who not only knew everything about the product, but would apologize abjectly if there was a bug, and then fix it immediately, while you were on the phone with them. Customers loved us. And we loved them, because when you’re growing slow by word of mouth, your first batch of users are the ones who were smart enough to find you by themselves. There is nothing more valuable, in the early stages of a startup, than smart users. If you listen to them, they’ll tell you exactly how to make a winning product. And not only will they give you this advice for free, they’ll pay you.

We officially launched in early 1996. By the end of that year we had about 70 users. Since this was the era of “get big fast,” I worried about how small and obscure we were. But in fact we were doing exactly the right thing. Once you get big (in users or employees) it gets hard to change your product. That year was effectively a laboratory for improving our software. By the end of it, we were so far ahead of our competitors that they never had a hope of catching up. And since all the hackers had spent many hours talking to users, we understood online commerce way better than anyone else.

That’s the key to success as a startup. There is nothing more important than understanding your business. You might think that anyone in a business must, ex officio, understand it. Far from it. Google’s secret weapon was simply that they understood search. I was working for Yahoo when Google appeared, and Yahoo didn’t understand search. I know because I once tried to convince the powers that be that we had to make search better, and I got in reply what was then the party line about it: that Yahoo was no longer a mere “search engine.” Search was now only a small percentage of our page views, less than one month’s growth, and now that we were established as a “media company,” or “portal,” or whatever we were, search could safely be allowed to wither and drop off, like an umbilical cord.

Well, a small fraction of page views they may be, but they are an important fraction, because they are the page views that Web sessions start with. I think Yahoo gets that now.

Google understands a few other things most Web companies still don’t. The most important is that you should put users before advertisers, even though the advertisers are paying and users aren’t. One of my favorite bumper stickers reads “if the people lead, the leaders will follow.” Paraphrased for the Web, this becomes “get all the users, and the advertisers will follow.” More generally, design your product to please users first, and then think about how to make money from it. If you don’t put users first, you leave a gap for competitors who do.

To make something users love, you have to understand them. And the bigger you are, the harder that is. So I say “get big slow.” The slower you burn through your funding, the more time you have to learn.

The other reason to spend money slowly is to encourage a culture of cheapness. That’s something Yahoo did understand. David Filo’s title was “Chief Yahoo,” but he was proud that his unofficial title was “Cheap Yahoo.” Soon after we arrived at Yahoo, we got an email from Filo, who had been crawling around our directory hierarchy, asking if it was really necessary to store so much of our data on expensive RAID drives. I was impressed by that. Yahoo’s market cap then was already in the billions, and they were still worrying about wasting a few gigs of disk space.

When you get a couple million dollars from a VC firm, you tend to feel rich. It’s important to realize you’re not. A rich company is one with large revenues. This money isn’t revenue. It’s money investors have given you in the hope you’ll be able to generate revenues. So despite those millions in the bank, you’re still poor.

For most startups the model should be grad student, not law firm. Aim for cool and cheap, not expensive and impressive. For us the test of whether a startup understood this was whether they had Aeron chairs. The Aeron came out during the Bubble and was very popular with startups. Especially the type, all too common then, that was like a bunch of kids playing house with money supplied by VCs. We had office chairs so cheap that the arms all fell off. This was slightly embarrassing at the time, but in retrospect the grad-studenty atmosphere of our office was another of those things we did right without knowing it.

Our offices were in a wooden triple-decker in Harvard Square. It had been an apartment until about the 1970s, and there was still a claw-footed bathtub in the bathroom. It must once have been inhabited by someone fairly eccentric, because a lot of the chinks in the walls were stuffed with aluminum foil, as if to protect against cosmic rays. When eminent visitors came to see us, we were a bit sheepish about the low production values. But in fact that place was the perfect space for a startup. We felt like our role was to be impudent underdogs instead of corporate stuffed shirts, and that is exactly the spirit you want.

An apartment is also the right kind of place for developing software. Cube farms suck for that, as you’ve probably discovered if you’ve tried it. Ever notice how much easier it is to hack at home than at work? So why not make work more like home?

When you’re looking for space for a startup, don’t feel that it has to look professional. Professional means doing good work, not elevators and glass walls. I’d advise most startups to avoid corporate space at first and just rent an apartment. You want to live at the office in a startup, so why not have a place designed to be lived in as your office?

Besides being cheaper and better to work in, apartments tend to be in better locations than office buildings. And for a startup location is very important. The key to productivity is for people to come back to work after dinner. Those hours after the phone stops ringing are by far the best for getting work done. Great things happen when a group of employees go out to dinner together, talk over ideas, and then come back to their offices to implement them. So you want to be in a place where there are a lot of restaurants around, not some dreary office park that’s a wasteland after 6:00 PM. Once a company shifts over into the model where everyone drives home to the suburbs for dinner, however late, you’ve lost something extraordinarily valuable. God help you if you actually start in that mode.

If I were going to start a startup today, there are only three places I’d consider doing it: on the Red Line near Central, Harvard, or Davis Squares (Kendall is too sterile); in Palo Alto on University or California Aves; and in Berkeley immediately north or south of campus. These are the only places I know that have the right kind of vibe.

The most important way to not spend money is by not hiring people. I may be an extremist, but I think hiring people is the worst thing a company can do. To start with, people are a recurring expense, which is the worst kind. They also tend to cause you to grow out of your space, and perhaps even move to the sort of uncool office building that will make your software worse. But worst of all, they slow you down: instead of sticking your head in someone’s office and checking out an idea with them, eight people have to have a meeting about it. So the fewer people you can hire, the better.

During the Bubble a lot of startups had the opposite policy. They wanted to get “staffed up” as soon as possible, as if you couldn’t get anything done unless there was someone with the corresponding job title. That’s big company thinking. Don’t hire people to fill the gaps in some a priori org chart. The only reason to hire someone is to do something you’d like to do but can’t.

If hiring unnecessary people is expensive and slows you down, why do nearly all companies do it? I think the main reason is that people like the idea of having a lot of people working for them. This weakness often extends right up to the CEO. If you ever end up running a company, you’ll find the most common question people ask is how many employees you have. This is their way of weighing you. It’s not just random people who ask this; even reporters do. And they’re going to be a lot more impressed if the answer is a thousand than if it’s ten.

This is ridiculous, really. If two companies have the same revenues, it’s the one with fewer employees that’s more impressive. When people used to ask me how many people our startup had, and I answered “twenty,” I could see them thinking that we didn’t count for much. I used to want to add “but our main competitor, whose ass we regularly kick, has a hundred and forty, so can we have credit for the larger of the two numbers?”

As with office space, the number of your employees is a choice between seeming impressive, and being impressive. Any of you who were nerds in high school know about this choice. Keep doing it when you start a company.

Should You?

But should you start a company? Are you the right sort of person to do it? If you are, is it worth it?

More people are the right sort of person to start a startup than realize it. That’s the main reason I wrote this. There could be ten times more startups than there are, and that would probably be a good thing.

I was, I now realize, exactly the right sort of person to start a startup. But the idea terrified me at first. I was forced into it because I was a Lisp hacker. The company I’d been consulting for seemed to be running into trouble, and there were not a lot of other companies using Lisp. Since I couldn’t bear the thought of programming in another language (this was 1995, remember, when “another language” meant C++) the only option seemed to be to start a new company using Lisp.

I realize this sounds far-fetched, but if you’re a Lisp hacker you’ll know what I mean. And if the idea of starting a startup frightened me so much that I only did it out of necessity, there must be a lot of people who would be good at it but who are too intimidated to try.

So who should start a startup? Someone who is a good hacker, between about 23 and 38, and who wants to solve the money problem in one shot instead of getting paid gradually over a conventional working life.

I can’t say precisely what a good hacker is. At a first rate university this might include the top half of computer science majors. Though of course you don’t have to be a CS major to be a hacker; I was a philosophy major in college.

It’s hard to tell whether you’re a good hacker, especially when you’re young. Fortunately the process of starting startups tends to select them automatically. What drives people to start startups is (or should be) looking at existing technology and thinking, don’t these guys realize they should be doing x, y, and z? And that’s also a sign that one is a good hacker.

I put the lower bound at 23 not because there’s something that doesn’t happen to your brain till then, but because you need to see what it’s like in an existing business before you try running your own. The business doesn’t have to be a startup. I spent a year working for a software company to pay off my college loans. It was the worst year of my adult life, but I learned, without realizing it at the time, a lot of valuable lessons about the software business. In this case they were mostly negative lessons: don’t have a lot of meetings; don’t have chunks of code that multiple people own; don’t have a sales guy running the company; don’t make a high-end product; don’t let your code get too big; don’t leave finding bugs to QA people; don’t go too long between releases; don’t isolate developers from users; don’t move from Cambridge to Route 128; and so on. [8] But negative lessons are just as valuable as positive ones. Perhaps even more valuable: it’s hard to repeat a brilliant performance, but it’s straightforward to avoid errors. [9]

The other reason it’s hard to start a company before 23 is that people won’t take you seriously. VCs won’t trust you, and will try to reduce you to a mascot as a condition of funding. Customers will worry you’re going to flake out and leave them stranded. Even you yourself, unless you’re very unusual, will feel your age to some degree; you’ll find it awkward to be the boss of someone much older than you, and if you’re 21, hiring only people younger rather limits your options.

Some people could probably start a company at 18 if they wanted to. Bill Gates was 19 when he and Paul Allen started Microsoft. (Paul Allen was 22, though, and that probably made a difference.) So if you’re thinking, I don’t care what he says, I’m going to start a company now, you may be the sort of person who could get away with it.

The other cutoff, 38, has a lot more play in it. One reason I put it there is that I don’t think many people have the physical stamina much past that age. I used to work till 2:00 or 3:00 AM every night, seven days a week. I don’t know if I could do that now.

Also, startups are a big risk financially. If you try something that blows up and leaves you broke at 26, big deal; a lot of 26 year olds are broke. By 38 you can’t take so many risks– especially if you have kids.

My final test may be the most restrictive. Do you actually want to start a startup? What it amounts to, economically, is compressing your working life into the smallest possible space. Instead of working at an ordinary rate for 40 years, you work like hell for four. And maybe end up with nothing– though in that case it probably won’t take four years.

During this time you’ll do little but work, because when you’re not working, your competitors will be. My only leisure activities were running, which I needed to do to keep working anyway, and about fifteen minutes of reading a night. I had a girlfriend for a total of two months during that three year period. Every couple weeks I would take a few hours off to visit a used bookshop or go to a friend’s house for dinner. I went to visit my family twice. Otherwise I just worked.

Working was often fun, because the people I worked with were some of my best friends. Sometimes it was even technically interesting. But only about 10% of the time. The best I can say for the other 90% is that some of it is funnier in hindsight than it seemed then. Like the time the power went off in Cambridge for about six hours, and we made the mistake of trying to start a gasoline powered generator inside our offices. I won’t try that again.

I don’t think the amount of bullshit you have to deal with in a startup is more than you’d endure in an ordinary working life. It’s probably less, in fact; it just seems like a lot because it’s compressed into a short period. So mainly what a startup buys you is time. That’s the way to think about it if you’re trying to decide whether to start one. If you’re the sort of person who would like to solve the money problem once and for all instead of working for a salary for 40 years, then a startup makes sense.

For a lot of people the conflict is between startups and graduate school. Grad students are just the age, and just the sort of people, to start software startups. You may worry that if you do you’ll blow your chances of an academic career. But it’s possible to be part of a startup and stay in grad school, especially at first. Two of our three original hackers were in grad school the whole time, and both got their degrees. There are few sources of energy so powerful as a procrastinating grad student.

If you do have to leave grad school, in the worst case it won’t be for too long. If a startup fails, it will probably fail quickly enough that you can return to academic life. And if it succeeds, you may find you no longer have such a burning desire to be an assistant professor.

If you want to do it, do it. Starting a startup is not the great mystery it seems from outside. It’s not something you have to know about “business” to do. Build something users love, and spend less than you make. How hard is that?

Notes

[1] Google’s revenues are about two billion a year, but half comes from ads on other sites.

[2] One advantage startups have over established companies is that there are no discrimination laws about starting businesses. For example, I would be reluctant to start a startup with a woman who had small children, or was likely to have them soon. But you’re not allowed to ask prospective employees if they plan to have kids soon. Believe it or not, under current US law, you’re not even allowed to discriminate on the basis of intelligence. Whereas when you’re starting a company, you can discriminate on any basis you want about who you start it with.

[3] Learning to hack is a lot cheaper than business school, because you can do it mostly on your own. For the price of a Linux box, a copy of K&R, and a few hours of advice from your neighbor’s fifteen year old son, you’ll be well on your way.

[4] Corollary: Avoid starting a startup to sell things to the biggest company of all, the government. Yes, there are lots of opportunities to sell them technology. But let someone else start those startups.

[5] A friend who started a company in Germany told me they do care about the paperwork there, and that there’s more of it. Which helps explain why there are not more startups in Germany.

[6] At the seed stage our valuation was in principle $100,000, because Julian got 10% of the company. But this is a very misleading number, because the money was the least important of the things Julian gave us.

[7] The same goes for companies that seem to want to acquire you. There will be a few that are only pretending to in order to pick your brains. But you can never tell for sure which these are, so the best approach is to seem entirely open, but to fail to mention a few critical technical secrets.

[8] I was as bad an employee as this place was a company. I apologize to anyone who had to work with me there.

[9] You could probably write a book about how to succeed in business by doing everything in exactly the opposite way from the DMV.

Power of Blogs Research

Blogs influence roughly one in five readers at important purchase-decision stages, according to BuzzLogic and JupiterResearch’s “Harnessing the Power of Blogs” report. Specifically, blogs help consumers discover products and services, refine choices, get support and answers, and decide on a specific product or service. From a direct marketing perspective, these findings make sense because blogs aggregate customers who have similar demographic, psychographic, and behavioral traits.

Blogs as a digital media format have become mainstream. “Harnessing the Power of Blogs” underscores this point. Many readers consume lots of information, checking multiple blogs in one session. User comments as well as blog entries aid purchase, while blog links help consumers navigate for additional information. Involved readers also consider blog ads to be relatively credible sources. According to the research, readers trust blog content more than social media sites for shopping. This makes sense, since shoppers look for detailed information to help them make a decision rather than engage with random posters who may have opinions about products.

Focused on the pre-buying process, this research neglected to check blogs’ impact on post-purchase support. It’s common for blogs to also help customers use products they own better while reducing returns and complaints. From a company perspective, these factors can be important cost considerations.

Five Marketing Reasons to Use Blogs

As a marketer, revisit using blogs to help enhance your marketing mix. They can help in several major ways, especially in a resource-constrained environment:

• Provide information across a wide range of topics related to your offering. This can help customers at different points in the purchase cycle, including post-purchase support and advocacy.
• Leverage internal staff expertise. Depending on your company and employee expertise, you may be able to utilize nonmarketing staff to author a blog, such as product developers, merchandisers, and customer service personnel who have offering-related expertise. The advantage is that these experts can give the blog an authentic voice that doesn’t sound like marketing jargon.
• Aid search optimization with additional content and internal and external linking.
• Enhance content offering using other media formats, including photo galleries, videos, and podcasts, to help customers better visualize how they would use your products. Associate text with nontext media for search engine optimization.
• Enable consumer interaction through comments, which should be moderated. This input can help both your firm and customers. It can be broadened to include message boards and photo galleries.

Three Blog-Related Considerations

When using blogs to enhance your marketing, assess the full impact of the blogs, because they aren’t a one-shot promotion yielding immediate returns.

• Blogs require an ongoing investment. This point needs to be stressed, since blogs may be created by nonmarketing staff where there isn’t a management-reporting relationship. To help spread the workload, have several people work on entries. Use an editorial calendar to ensure timely coverage of relevant topics and to help employees schedule their time.
• Blogs can take time to have an impact on purchasing and search optimization. Unlike other online marketing formats where results are realized quickly, like e-mail or search advertising, the sales impact of blogs happens over an extended period.
• Blogs require transparency. As with any form of social media, this is critical and needs to be thought through before the blog is made public. Among the areas to consider are how negative customer comments will be handled.

Five Blog Metrics to Track

As with any marketing strategy, using a blog to enhance the purchase process must be monitored to ensure you’re achieving your goals. Remember, these metrics may take time to yield returns.

• Traffic and/or revenue. As with any Web site addition, measure the number of visitors. Once the blog has reached a critical mass of content, utilize other forms of marketing to help extend its reach. Where appropriate, track sales back to blog entries. Remember, customers may use blogs in the pre- or post-purchase phases, and more complex methods of assessing their sales impact maybe required.
• Internal expenses. As with any marketing program, track the associated costs. Since blogs may be an addition to one or more employees’ workload, determining costs may be a little tricky.
• Customer input. Monitor blog comments as well as input from other customer touch points to determine how consumers feel about your products and your blog. Circulate these comments internally to show customer engagement and give management a better understanding of customers’ perspective.
• Search rankings. Track search rankings for important keywords covered in your blog. Bear in mind that it can take time for the search rankings to build.
• Branding. Use surveys to monitor consumer perception of your brand and company across a variety of brand-related metrics before and after you’ve started blogging to calculate change in mind share.

While no longer the latest, sexiest form of online communications, blogs can be highly effective and cost-efficient in driving sales. But they aren’t a quick marketing fix. They’re a form of online media that requires a long-term investment to help and engage your customers and create more interest in your product offering. By their nature, blogs also aid search optimization and reduce the burden of post-purchase support and customer service.

source: Kinsey Group & MediaPost

More than 86% of online users make local searches

Establishing an online local presence is substantially different from major national sellers. National sellers can easily sponsor thousands of search terms and run broad based online advertising to find customers. Local advertisers, on the other hand, must focus on a myriad of programs to achieve significant customer traffic. This requires a number of different online programs which drive traffic to our customers business.

We develop a comprehensive online presence for small business owners by utilizing a broad suite of techniques including a multi-page search engine friendly website, paid search, organic placement, content development on review and social sites, blogs and video blogs. Our customers can add additional content to their business listing including coupons and pictures.

If you’re a sales executive and you want to increase those sales ask yourself what’s in your toolbox? What’s included in your inventory that going to create excitement and allure for those willing to listen. This article can be part of you arsenal. All these facts point to one thing; Local search is the new methodology by which consumers are seeking out businesses.

If you were to print this information nicely laid on stock post card size paper, it could easily be handed over with your business card. Think about it. If all you give the perspective client when you leave, is a business card, what do they have to ponder? How are they going to explain who we are and why they need us? It’s just copy and paste kids. Give them some meat to chew on so when you call back, their informed and ready to subscribe!

Chris Borowski

Time management is about making changes to the way you spend your time. For effective time management, you have to apply a time management system that will help you see where changes can and should be made.

The first step of time management is to analyze how you actually spend your time so you can determine what changes you want to make.

This is where many people’s attempts at time management fail. They look at a specific day in their Day-Timer or Outlook calendar or on their Palm which is packed with activities from 7 a.m. to 10 p.m. and don’t know what to do with it. So they fall back on the tried and true techniques and eliminate a few events and prioritize others. But they haven’t really managed anything; they’ve just rearranged it. All the perceived problems and frustrations of the day’s activities are still there – and at the end of their day they’re still frazzled and frustrated.

Manage Your Time with Time Management Categories

How do you actually manage time? The secret is in the categories. Look at your calendar for tomorrow. It’s probably already full of events and activities that you’re hoping to accomplish. As you work or afterward, you’ll be filling in the blank spaces.

Now look at the list and categorize it. How much time during your working day did you actually spend?

1) Putting out fires. An unexpected phone call.  A report that’s necessary for a meeting that should have been printed yesterday. A missing file that should be on your desk. How much of your day was actually spent in crisis mode? For most people, this is a negative category that drains their energy and interferes with their productivity.

2) Dealing with interruptions. Phone calls and people dropping by your office will probably top the list when you’re assigning events to this category. Once again, for most people, this is a negative category because it interferes with (and sometimes kills) productivity.

3) Doing planned tasks. This is the most positive use of time during your work day. You are in control and accomplishing what you intended to accomplish. Planned tasks can include phone calls, meetings with staff, even answering email – if these are tasks that you have put on your agenda.

4) Working uninterrupted. You may not be working on a task you had planned to do, but you are getting to accomplish something, and for most people, this is a very productive, positive work mode.

5) Uninterrupted downtime. Those times during the work day that is used to re-energize and regroup. Lunch or a mid-morning break may count IF they’re uninterrupted. If you’re lucky enough to work with a company that offers on-site work-out facilities or nap rooms that would count, too. Everyone needs a certain amount of uninterrupted downtime built into their day to be productive during their work time.

A Week of Your Past Is the Key to The Future

Now that you understand the time management categories, it’s time to use them to analyze your “typical” work week. Using whatever calendar system you use for listing appointments and activities in your daily life, go back and select a recent typical week. Go through the entries of each working day and categorize them according to the time management categories above. Keeping a running total at the bottom of each day will make it easy to see just how you’ve spent your working time each day.

Now you have the data you need to make changes to the way you spend your time at work. Are you spending too much time putting out fires? Then you need to make the organizational or physical changes to prevent or defer these constant crises. Clean up and reorganize your desk, for example, so you can find the files you need easily, and establish a routine of putting the files you need for the next day out on your desk before you leave for the day. Not getting enough uninterrupted downtime during your working day? Then you need to build it in. For instance, stop eating lunch at your desk and physically leave the building for your stipulated lunch time.

By applying my work categories of time management, and making the changes you need to make to spend more of your time during your working day in the positive categories and less time in the negative categories, you’ll truly be able to effectively manage your time at work – and accomplish the true goal of time management, to feel better.

Why is local search so significant to these businesses? Local search uses localized Internet marketing to pair a customer with a nearby business. When a company places an ad online, people from all over the globe can find it. However, what many customers really are looking for is a local business to meet their needs. Search results are now more refined, and with the right targeting, can deliver that walk-in business along with online patronage. For the advertising dollar, a local business would be well served by prominent placement in a powerful local search engine such as MapWide. As research has shown, paper based advertising is close to extinction. 78% of local consumers now rely on local searches to find a business.

What is unique about Mapwide’s advertising model is the valued added features subscribers are entitled to. For about the price of a yellow pages thumbnail ad per month, businesses can purchase a year’s worth of space. Ads include; a prominent page one graphic, personalized blog and chat room features, coupon placement, and other well thought out features. One key element that is very unique to this model involves the businesses ability to log into their subscription and change any element, including regenerating coupons.

“We’ve helped many of smaller advertisers get online to date and the single common denominator is that they’ve keyed in on local search,” said Dr. Said, CEO and founder of MapWide. “This is not a nascent trend any longer — local search is what consumers now demand and only businesses found by these search engines will be in the list of choices.

An informal survey of MapWide clients who are first-time advertisers found that local search topped the list of marketing goals, ahead of Yellow Page Ads and Direct Mail. After three months, MapWide clients reported an increase in localized business leads as a result of targeted campaign management, and these in turn are resulting in a significant number of conversions.

According to Dr. Said, “MapWide has proprietary technology to geographically target Internet marketing to keep it local and to separate traffic so that customers in a specific area are directed to local businesses.” In addition, the company has partnered with top local directories, destination sites and search engines to provide its customers with the best traffic possible.

MapWide’s local search marketing efforts can range from pinpoint campaigns for national companies tied into an event or promotion in a specific locale, to geolocation targeting for smaller private sector firms. Mapdentist Inc. is a marketing-driven technology company that empowers businesses with smaller advertising budgets to maximize their online presence. MapWide’s solutions provide these businesses with the same opportunities as those of larger concerns through the use of advanced reporting tools; dynamic campaign management; a unique optimization engine; personalized customer support; and an advertising network tailored to local and national markets. MapWide’s technology is now being used to manage hundreds of thousands of keywords and campaigns with outstanding results. The privately held company is based in Tustin, CA.

The fact that Gary Mirkin, the former President of Inc. Magazine, is now MapWide’s President, tells the industry that MapWide is becoming a formidable force. Recent investments, coupled with innovative technology has given rise to what could be the next prominent search engine. In regards to vertical searches on a local level, MapWide has already created something so unique that major players are aligning themselves in what is sure to be a major innovation in the way consumers finds local businesses.

Author: Chris Borowski