Most of you came to this blog post from an email I sent you.
The email read as follows:
Subject Line: The Most Important Email
You'll Ever Read
I have an ultra-important message
to share with you.
Visit my blog to read it.
PS. It will only take about 3 minutes to read this.
And you'll benefit for a lifetime.
Visit my blog to read it.
So why is this the most important email (or blog post) you'll ever read?
Because it gives you a critical lesson in communications that is absolutely essential to your success as an entrepreneur.
The lesson is this: 1) be as simple/clear/concise as possible in all important communications, and 2) sell ONE thing at a time.
Let me explain.
1) Be as simple/clear/concise as possible
My email message was extremely concise. It said that I have an ultra-important message
to share with you and that you should visit my blog to find out what it is.
2) Sell ONE thing at a time
My goal in the email was to "sell the click" or convince you simply to click on the link. I wasn't trying to get you to do anything else.
The results: Because I was clear and sold just one thing, you clicked on the link.
So let's apply these lessons to raising funding for your business.
The other day, one of my Crowdfunding clients sent me the email they were about to send to their friends to get them to donate.
The email was very long and gave tons of details about their company and why their friends should donate.
THIS WAS THE TOTALLY WRONG APPROACH!
To begin, the story about the nature of the company should have been no more than ONE LINE long. If you can't already sum up your venture in one line, than stop everything and figure out how to do it. Importantly, that one line doesn't have to provide every detail about what's unique about your business. Rather, it just has to give people the essence of your business.
Secondly, the goal of the email should have simply been to get their friends to click on a link to learn more. To go to a page with a video and a nicely laid out story on why they should donate.
The point is that you can't get many people to donate just from the email, but you can get many people to click. And then once they click, you give them the information they need to donate.
The same is true with angel investors and venture capitalists. No venture capitalist has EVER invested based on an email they received. So why would you ever send an email with the hopes that they will invest?
Rather, the initial email you send to investors should just be to gauge their interest. That's ALL you're selling in the email. Say here's what we're doing and include 5 interesting bullets about your company. And then say, "would you like to learn more?"
That's it. Sell one thing, which is "would you like to learn more?"
And then, if they say "yes," you're goal will be to sell them on investing the time to meet with you.
And then you're selling them on letting you present to the other VCs in their firm.
And then you're selling them on giving you their money with the best investment terms. And so on.
I'm very lucky. My son is a fifth grader. So I have built-in tester. If I tell him a message and he can't repeat it back to me as clearly as I told it to him, then my message is flawed.
And if I ask him to do a complex task and he does it wrong, it's because I tried to sell too many things at once, rather than selling him on doing just the first step.
Many of us have heard the acronym KISS, standing for "Keep It Simple, Stupid." Simplicity in communications is essential. While some people think complexity makes them sound smart, it confuses their messages so the recipients of those messages don't take the desired actions.
In fact, I rather sound like a moron, but convince others to do what I need them to do, than appear as a genius, but a genius that fails to accomplish his goals.
So to reiterate, if you want to succeed as an entrepreneur, you must communicate clearly and simply, and sell just one thing at a time. This is key when selling to everyone from investors, to customers, to partners, to your employees.
Three resources for you:
Readability Score: this cool free tool allows you to see how easy your text is to read. You simply copy and paste your text into the box and click Submit.
FYI, according to this tool, my email was written at just a 2nd grade level. Meaning that even a 2nd grader would have understood exactly what I wanted them to do. This blog post was written at a 6.5 grade level (I have to work on getting that down so it's even easier to read my posts (the New York Times is written at a 6th grade level)).
Truth About Funding: This guide shows you exactly how to raise all the money you need. Importantly, it walks you through 3 different approaches and exercises to create a hard-hitting concise pitch for your company.
Crowdfunding Formula: This program shows you precisely how to raise money from Crowdfunding, the newest and probably the easiest way to raise money for your business. Crowdfunding allows you to leverage the communications techniques explained above.
I just learned about an interesting new website called My Dunk Tank.
The site helps you raise money by asking your supporters to create dares for you and vote with their donations.
Here's how it works:
1. You make a list of dares you're willing to do
2. Your friends vote for their favorite dare by making a gift in your name to the organization you are supporting
3. You do the dare that gets the most votes
So far, people have done some pretty interesting dares from jogging naked to eating worms to kissing a pig.
One of the bigger winners so far was Beth and Katie Cooke who raised $2,913 for The Spina Bifida Resource Network via the dare of "wearing a full head of cornrows in our hair for 2 weeks."
To date, it appears that all the fundraising has been for non-profits like the National MS Society, the Susan G. Komen Race for the Cure, and Talk About Curing Autism.
And the amount of the funding is relatively low, with most funding amounts ranging from $500 to $2,000.
So, if you have a non-profit organization looking for $500 to $2,000, you could certainly try MyDunkTank. But for the vast majority of you, this amount of funding is not going to really help.
However the bigger lesson here might be that dares and stunts can give any type of venture lots of attention.
Consider newspaper man Henri Desgrange. In 1903, his French newspaper was suffering from poor circulation. So, they developed a stunt to promote a new newspaper service route. That stunt garnered national attention and eventually turned into the Tour de France.
So, what kind of stunts can you do for your business to gain attention? I don't think silly stunts like kissing a pig or shaving your head are the answer. They're too short lived. Can you think bigger?
And specifically, is there anything that you can do that's interesting and related to your venture? One of my favorite example is when the manufacturer of Blendtec blenders made a video showing that it could blend an iPhone. That video has gotten over 8.8 MILLION views to date on YouTube (you can watch it here).
The good news is that with brand new funding sources like Crowdfunding, even a startup with no revenues can raise hundreds of thousands of dollars if they can generate enough attention.
So get your creative juices flowing, come up with ideas to generate buzz, and you can parlay that into investors, customers, partners and more.
Last week I commented on Matt Ridley’s incredible book, “The Rational Optimist,” and how it represents an entirely new paradigm re the probabilities for economic growth and prosperity worldwide in the coming years.
A particularly revelatory component of Ridley’s analysis revolves around what the real process of innovation is and what it is NOT.
Ridley first points to what innovation is NOT.
It is NOT Government Research. One of the most cited examples of the importance of government research to commercial technology is America’s successful efforts to land a man on the moon in the 1960’s. It is often said that non-stick frying pans would simply not exist were it not for the Apollo program.
Well, given that close to $200 billion in today’s dollars was spent on the moon effort, it is just a bit underwhelming, isn’t it? Heck, even the Wikipedia entry re the program’s scientific and engineering legacy is a scant 3 sentences.
It is NOT University Research. Buzzwords from academia like “technology transfer” and “commercialization” are, in Ridley’s analysis, just that - buzzwords.
For the tens of billions of dollars in hard costs and the monumental diversion of top-grade intellectual talent from commercial activity that academia represents, no demonstrable commercial return-on-investment has ever been proven.
A “Renaissance lifestyle” value for young people, sure. Civic pride and relationship values of affiliation with top-notch colleges and universities - of course.
But actual hard dollars and cents wealth-creating returns, well it just isn’t there. Probably the best that can be said about the commercial value of the university R+D is that it is normally so stilted and misaligned that it drives away the best entrepreneurial and technical talent very quickly (see Gates, Ellison et al.)
So What Does Drive Real Innovation? Building on the seminal work of Clayton Christensen in the Innovator’s Dilemma, Ridley describes the innovation process and its economic value-add in very prosaic terms.
He points to innovations like Amazon’s ongoing transformation of the ecommerce experience – none of which would be considered breakthrough technology, but which in their aggregate have brought unprecedented consumer productivity gains.
And to eBay, whose core innovation was NOT the idea of online auctions as much as it was that a robust exchange of buyers and sellers could be attracted via pay-per-click advertising (see Google above).
Ridley’s point is that the innovation that creates wealth - versus innovation that looks good on an academic’s or a politician’s whiteboard - is simply the abiding power of Adam Smith’s invisible hand made real.
Namely individuals and small teams tweaking the way things are done only so slightly for one purpose and one purpose only – to make a buck. Or a yuan. Or a rupee. Or a few pesos. Period. End of story.
And you know what else? For the first time in human history, there are now billions of people thinking and working and collaborating in real time toward this basic human desire.
And that is why - and only why - as a species we just keep getting richer every day.
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To learn more about opportunities we are following now and how to grow and profit with them, please click here.
Emeril Lagasse is no doubt one of the most famous and successful chefs of all time.
In fact, Emeril's media, products and restaurants generate an estimated $150 million in annual revenues. Not bad.
One of the reasons for Emeril's success is his personality. And in particular, his ability to make cooking exciting. Particularly when he shouts his catchphrases including "Kick it up a notch!" and "BAM!"
I want to focus specifically on Emeril's "BAM!" and its implications.
Emeril say "BAM!" only at a specific time. He says it when he adds a pinch of a certain ingredient that will make a good recipe extraordinary. Also, like other chefs, Emeril spends time "plating" or focusing on the appearance of the dish.
So why am I telling you this?
Because Emeril gives us a great lesson in developing business plans, particularly if we hope to present our business plans to investors and/or lenders.
To begin, your business plan must have a "BAM!" factor. The "BAM!" is what makes your plan extraordinary or worth reading. I believe that the biggest "BAM!" factor is your list of success factors that MUST go on the first page of your business plan.
Specifically your success factors must detail, ideally in bulleted form so it's simple to digest, why you are uniquely qualified to succeed.
Most business plans neglect this, and most entrepreneurs think that the quality of their idea is more important than this. Not true. Your ability to execute on the idea is of paramount importance.
In addition to including your "BAM!" factor, like Emeril, you need to spend time "plating" or making sure your business plan has a great appearance. Since if it doesn't, investors won't read it.
Making your business plan graphical appealing, with pictures, logos and the right fonts and spacing helps. But even more important is laying the "story" of your business out in a format that constantly compels the reader to want to read and learn more. Rather than bombarding them with every detail about your venture, you lead them down a path.
You succinctly tell them about what your venture is all about. You tell them why you are uniquely qualified to succeed. You show them the market need. And customer wants. And your marketing plan. Etc.
Few people, including investors and lenders looking for deals, really want to sit down and read your business plan. Those business plans that are inviting, and have the "BAM!" factor are the ones that investors pick up and can't put down. And those are the ones they fund. So make sure yours is like that too.
Watch this video for tips and shortcuts for completing your business plan.
When Catherine Lanigan was a teenager, she earned a scholarship to attend college.
While in college, she took a writing course given by a traveling Harvard professor.
During the class, a major assignment was for her to write a short creative story.
Catherine earned an 'F' on the story. Not only was earning an 'F' alarming to her, but if she failed the class, she risked losing her scholarship.
So, she went to speak to the professor. When asked why she received the failing grade, the professor replied, "Frankly, Ms. Lanigan, your writing stinks."
However, the traveling Harvard professor did give Catherine a chance to pass the course. He told her that if she stopped writing and changed her major, that he would allow her to pass the course.
So that's what she did.
Fourteen years later, Catherine Lanigan was hanging around the set of a movie and speaking to screenwriters. When asked why she was there, she told one of the screenwriters that when she was younger, she had wanted to be a writer.
Catherine proceeded to tell the story of the traveling Harvard professor. The story really intrigued the screenwriter, who asked her to write something so he could judge it for himself.
Well, the book that Catherine Lanigan wrote for the screenwriter was called Romancing the Stone. It not only became an extremely successful book, but it was later made into a major motion picture. And it didn't stop there; Catherine was asked to write the sequel, Jewel of the Nile.
The point of this story is that you can't give up in spite of any criticisms you might receive or failure you encounter. In fact, in business, most new things you try fail. It's tweaking those things and trying a second time, or third time, with more and better information, that allows you to be successful.
And realize that most of those criticisms (you're not smart enough, you're not tall enough, you're not creative enough, etc.) you've received throughout your life were dead wrong! We must all overcome them. Gain our levels of confidence. And achieve everything that we want. Because if we don't fear failure, really believe in ourselves, and work hard, each of us can achieve anything we want.
Feel free to use the little train who thought he could as your inspiration. That little train succeeded simply because he thought he could; because he was able to convince his mind that he could and would achieve success. Even though everyone else told him he couldn't. And even though he might have failed before.
If doubt ever creeps in your head, think of the little train, and say "I think I can" "I think I can" "I think I can" over and over in your mind, and then "I know I can" "I know I can" "I know I can." Because if you do this, you can accomplish anything!
(I know what I'm saying may seem corny. But I rather achieve success and be accused of being the corny guy sitting in his office repeating "I think I can," versus not achieving the success I desire.)
Arguably the best book ever written on the power of entrepreneurial capitalism - The Rational Optimist by Matt Ridley - should be required reading by anyone interested in protecting and defending the free enterprise way of life.
In an awe-inspiring tour de force of exposition, Mr. Ridley takes the reader all the way back through human economic history. Back to the 1st entrepreneurs who discovered fire and the copper axe, through the Phoenicians, through the great trading cultures of India and China before their long (and government induced) sleeps, through the age of the Medici and the early Dutch wellsprings of modern trade, through the 19th Century Industrial Revolution in England and Scotland, to the American Century and the dawns of the computer, information, and communication ages.
As the book title implies, it is a tale of sturdy optimism and hope. He takes head-on the naysayers, the pessimists, and the chattering classes that earn their bread via hawking fears of impending woe and doom. Some tidbits of his refreshing wisdom:
Africa – Getting Better Slowly But Surely. Those who hold (either overtly or more quietly because of political correctness) that Africa will not emerge anytime soon from its poverty and strife are just dead wrong. He points to the inspiring example of Botswana, where a hard-earned culture of property rights and rule of law have fueled economic growth rates to rival the highest-flying Asian Tiger. And he notes the cascade of statistics pointing to standards of living increasing dramatically – as productivity has been unleashed by the mobile phone revolution across the continent.
The Climate Change Mafia. Controversially but powerfully, Ridley defends fossil fuel use as being the key driver of modern economic growth. And he points out the vastly under reported costs of "sexy fuel" alternatives - solar, wind, bio-fuels, et al. You may not agree with all of Ridley's points here, but if you care about this debate, you should hear him out.
Optimism as the Intelligent Choice. Most excitedly, Ridley takes head-on ANYONE that claims that the present time is anything but the greatest in human history.
How can Ridley credibly claim this? Very simple – from that tale of human history with which Ridley begins his book. He makes the overwhelming case that the 2 key drivers of human prosperity since time immemorial have been innovation and trade.
And as they are both happening today faster and in greater quantity than at anytime ever, the result is more prosperity for more human beings than at any time ever.
Now you probably know that. But here is something that I had forgotten in the face of all of the talk of recession and global financial crisis out there - that the statistical odds are overwhelmingly in favor of everything just getting better!
For all of us, for our children, and our grandchildren. As in more prosperity, better education, more safety from premature death and disease, and yes even more happiness.
As Mr. Ridley points out, most of our grandparents had standards of living not much greater than that of Zambians today. And by corollary, if current trends continue, the grandchildren of today's Zambians will have standard of living's equal to those of ours today.
And as for our grandchildren, well they will live in a world, like our grandparents before us, that we can only dream of.
And as Mr. Ridley prove conclusively in this wonderful book, for all of this prosperity and bounty it is the entrepreneurs and the innovators above all that we have to thank.
So thank you, Mr. and Ms. Entrepreneur.
And thank you, talented Mr. Ridley.
Looking for Opportunities Now?
Each year, Growthink reviews hundreds of startup and emerging company opportunities and selects those with the best management teams, market opportunities, and financial prospects.
To learn more about opportunities we are following now, please click here.
The 4-minute video below gives an important lesson about concept versus reality and how to convince investors to fund your company.
Comments? Thoughts? Questions? Do you think I've lost my mind? Please post them below.
We've all hear the nursery song "Three Blind Mice."
It goes like this:
Three blind mice,
Three blind mice
See how they run,
See how they run!
They all ran after
The farmer's wife,
She cut off their tails
With a carving knife
Did you ever see
Such a sight in your life
As three blind mice?
But have you heard the "more educated" version called "A Trio of Sightless Rodents." It goes like this:
A trio of sightless rodents,
A trio of sightless rodents
Observe how they perambulate
Observe how they perambulate;
They all pursued the agriculturalist's spouse,
Who severed their caudal appendages with a carving utensil
Have you previously observed such a phenomenon in your existence
As a trio of sightless rodents?
Both versions say the same thing.
And I guess if you wanted to impress someone, you'd tell them the "more educated" version of the tale.
But, most likely, listeners would tune out the "more educated" version.
Why? Because it's much harder to follow and makes them think way too much.
Conversely, the simple "Three Blind Mice" version is easier to follow.
The point is this -- if you can't communicate simply, clearly and concisely, people won't understand what you're talking about. They are not going to invest the time and mental brainpower to figure out what you mean.
And if you are communicating to get someone to take action, be it to buy your product or invest in your company, if you lack clarity, you will virtually always lose the sale.
Most business plans lack this critical clarity. The entrepreneur makes the business far too complex. And as a result, investors don't understand what they are doing, and don't invest in the business.
Here's a test to see if you're communicating your business' value proposition properly. Give someone one minute to read the first paragraphs of your business plan. Then, a minute later, have them repeat back to you the business' value proposition (without looking at the document). If their version is good, you've done a good job concisely explaining your business. If not, then it's back to the drawing board.
Even better, have the first person state the value proposition to a second person, and then have the second person repeat it back to you. A clear, compelling message will survive this grapevine.
When I created Growthink's Ultimate Business Plan Template, I focused on making every section of the business plan simple, clear and concise. So that investors can quickly understand all the key points about your business. And so they will invest. Because certainly, investors will not invest in what they don't understand.
So, make sure all of your verbal and written communications, starting with your business plan, are simple, clear and concise so everyone "gets" it and takes the actions you desire.
Today, like I do every Monday, I bought the company lunch.
A lot of productivity experts advise against lunch meetings as participants focus too much on the food, and not enough on the discussion.
I buy that argument. But I also think that everyone appreciates it when the company springs for lunch, and we often have high-quality creative discussions.
Today we opted for Chinese food. Last time we had Chinese was about two years ago. I like to eat healthy, and I guess the others have to deal with that guideline too when it comes to Monday lunches.
And with Chinese food comes the obligatory fortune cookies.
My take on fortune cookies is this -- they are always fun and interesting to open; but I just don't think they taste very good. But, I always eat them hoping for a better experience than the last time. Today, once again, the cookie tasted decent-at-best and definitely wasn't worth eating. I guess I have trouble throwing away food though.
The one thing that is so interesting about fortune cookies is that people always read their fortune, and they always think about it for a moment.
Today, my fortune was "By listening, one will learn truths. By hearing, one will only learn half truths."
So, my personal lesson for today was to listen more. To really pay attention to those around me and the things that I experience everyday. So I can better help others and better help myself achieve my goals.
And now, by writing this down, I am confident that I will get better at this. And by improving, my life will improve and I will move closer to achieving my goals.
What is fascinating to me is that it takes a note inside a fortune cookie sometimes for people (including myself) to stop what they're doing, read something, and really think about what they have read, what it means to them, and how they can use that information to improve their lives.
So, if you don't mind, I'd like for you to stop for just one second. Take a deep breath. Imagine that you had a fortune cookie in front of you. Crack it open. And read the note inside. And I want you to imagine that the note said this "Tomorrow, you will achieve all of your goals."
Now flip the note over. And you'll see that it says, "But only if you define your goals today."
As today was the first day of August, during our lunch meeting we reviewed our July goals and our July results, and we set our goals for August. I urge you to do the same. Because without defined goals, you can't achieve the results you desire.