Growthink Blog

Martin Conroy's Billion Dollar Story


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storyOn a beautiful late spring afternoon, twenty-five years ago, two young men graduated from the same college. They were very much alike, these two young men. Both had been better than average students, both were personable and both - as young college graduates are - were filled with ambitious dreams for the future.

Recently, these men returned to their college for their 25th reunion.

They were still very much alike. Both were happily married. Both had three children. And both, it turned out, had gone to work for the same Midwestern manufacturing company after graduation, and were still there.

But there was a difference. One of the men was manager of a small department of that company. The other was its president.

What Made The Difference?

Have you ever wondered, as I have, what makes this kind of difference in people’s lives? It isn’t a native intelligence or talent or dedication. It isn’t that one person wants success and the other doesn’t.

The difference lies in what each person knows and how he or she makes use of that knowledge.

And that is why I am writing to you and to people like you about The Wall Street Journal. For that is the whole purpose of The Journal: to give its readers knowledge - knowledge that they can use in business.

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The above story/sales letter, written by Martin Conroy, was used by the Wall Street Journal for 25 years starting in 1974. Doing the math regarding how many people this letter was sent to, the percentage of orders that came from it, and the subscription prices, it is estimated that this story resulted in $1 billion in sales for the paper.

So, what’s the point?

The point is that stories are an extremely effective, but often overlooked, sales tool that can allow emerging ventures to compete with large established companies. Stories allow companies to get their prospects involved in their message. It gets them excited. And then they want to learn more.

Here's an example of another startup who crafted a great story...

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I’m about to tell you a true story. If you believe me, you will be well rewarded. If you don’t believe me, I will make it worth your while to change your mind. Let me explain.

Lynn is a friend of mine who knows good products. One day he called excited about a pair of sunglasses he owns. “It’s so incredible!” he said. “When you first look through a pair you won’t believe it.” What will I see? I asked. What could be so incredible?

Lynn continued. “When you put on these glasses your vision improves, objects appear sharper, more defined. Everything takes on an enhanced 3D effect and it’s not my imagination. I just want you to see for yourself.”

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The story goes on to discuss all the benefits of Joe Sugarman’s BluBocker sunglasses… over 20 million pairs of which have now been sold!

Does your company have a great story?

13 Costly Feasibility Study Mistakes ...And How To Avoid Them


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To make your new venture succeed -- whether you are creating a new product, constructing a hotel, or developing a community center -- you must convince investors and/or management to fund your initiatives.

Feasibility studies play a critical role in this early planning and fundraising process.

A feasibility study is a detailed investigation and research analysis of a proposed venture or development project. The purpose of a feasibility study is to determine whether it is technically and financially feasible to move forward with a new project.

An effective feasibility study demonstrates the following:

  • That your ideas are sound

  • That there is a need for your venture

  • That your execution plan is practical


To help you navigate through the feasibility study development process, we have just released a special report titled:

13 Costly Feasibility Study Mistakes – And How To Avoid Them


In this free report, you will learn:

  • The key mistakes to avoid when conducting a feasibility study

  • The important difference between “data” and “intelligence”

  • How entrepreneurial over-confidence can doom a feasibility study


Click here to download the report.


How to Write a Business Plan for Raising Venture Capital


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Are you looking to raise venture capital?

You need a good idea – and an excellent business plan.

Business planning and raising venture capital go hand-in-hand. A business plan is required for attracting venture capital. And the desire to raise capital (whether from an individual “angel” investor or a venture capital firm) is often the key motivator in the business planning process.

But how exactly will your business plan persuade investors to sign a check?

This article provides advice on how to position each section of the business plan for an investor audience. These tips draw on Growthink’s decade of experience consulting to start-ups in the business planning and capital raising process.


Executive Summary

Goal of the executive summary: Stimulate and motivate the investor to learn more.

  • Hook them on the first page. Most investors are inundated with business plans. Your first page must make them want to keep reading.


  • Keep it simple. After reading the first page, investors often do not understand the business. If your business is truly complex, you can dive into the details later on.


  • Be brief. The executive summary should be 2 to 4 pages in length.



Company Analysis

Goal of the company analysis section: Educate the investor about your company’s history and explain why your team is perfect to execute on the business opportunity.

 

  • Give some history. Provide the background on the company, including date of formation, office location, legal structure, and stage of development. 


  • Show off your track record. Detail prior accomplishments, including funding rounds, product launches, milestones reached, and partnerships secured, among others.


  • Why you? Demonstrate your team’s unique unfair competitive advantage, whether it is technology, stellar management team, or key partnerships.

 

Industry Analysis

Goal of the industry analysis section: Prove that there is a real market for your product or service.

 

  • Demonstrate the need – rather than the desire – for your product. Ideally, people are willing to pay money to satisfy this need.


  • Cite credible sources when describing the size and growth of your market.


  • Use independent research. If possible, source research through an independent research firm to enhance your credibility. For general market sizes and trends, we suggest citing at least two independent research firms.


  • Focus on the “relevant” market size. For example, if you sell a portable biofeedback stress relief device, your relevant market is not the entire health care market. In determining the relevant market size, focus on the products or services that you will directly compete against.


  • It’s not just a research report – each fact, figure, and projection should support your company’s prospects for success.


  • Don’t ignore negative trends. Be sure to explain how your company would overcome potential negative trends. Such analysis will relieve investor concern and enhance the plan’s credibility.


  • Be prepared for due diligence. It’s critical that the data you present is verifiable, since any serious investor will conduct extensive due diligence.



Customer Analysis

Goal of customer analysis section: Convey the needs of your customers and show how your company’s products/services satisfy those needs.

 

  • Define your customers precisely. For example, it’s not adequate to say your company is targeting small businesses, since there are several million of these.


  • Detail their demographics. How many customers fit the definition? Where are these customers located? What is their average income?


  • Identify the needs of these customers. Use data to demonstrate past actions (X% have purchased a similar product), future projections (X% said they would purchase the product), and/or implications (X% use a product/service which your product enhances).


  • Explain what drives their decisions. For example, is price more important than quality?


  • Detail the decision-making process. For example, will the customer seek multiple bids? Will the customer consult others in their organization before making a decision?



Competitive Analysis

Goal of the competitive analysis section: Define the competition and demonstrate your competitive advantage.

 

  • List competitors. Many companies make the mistake of conveying that they have few or no real competitors. From an investor’s standpoint, a competitor is something that fulfills the same need as your product. If you claim you have no competitors, you are seriously undermining the credibility of your plan.


  • Include direct and indirect competitors. Direct competitors serve the same target market with similar products. Indirect competitors serve the same target market with different products, or different target markets with similar products.


  • List public companies (when relevant, of course). A public company implies that the market size is big. This gives the assurance that if management executes well, the company has substantial profit and liquidity potential.


  • Don’t just list competitors. Carefully describe their strengths and weaknesses, as well as the key drivers of competitive differentiation in the marketplace. And when describing competitors’ weaknesses, be sure to use objective information (e.g. market research).


  • Demonstrate barriers to entry. In describing the competitive landscape, show how your business model creates competitive advantages, and – more importantly – defensible barriers to entry.



Marketing Plan

Goal of the marketing plan: Describe how your company will penetrate the market, deliver products/services, and retain customers.

 

  • Focus on the 4 P’s. They are: Products, Promotions, Price, and Place.

    • Products. Detail all current and future products and services – but focus primarily on the short-to-intermediate time horizon.


    • Promotions. Explain exactly which marketing/advertising strategies will be used and why.


    • Price. Be sure to provide a clear rationale for your pricing strategy.


    • Place. Explain exactly how your products/services will be delivered to your customers.


  • Detail your customer retention plan. Explain how you will retain your customers, whether through customer relationship management (CRM) applications, building network externalities, introducing ongoing value-added services, or other means.


  • Define your partnerships. From an investor’s perspective, what partnership you have with whom is not nearly as important as the specific terms of the partnership. Be sure to document the specifics of the partnerships (e.g. how it will work, the financial terms, the types of customer leads expected from each partner, etc.).



Operations Plan

Goal of the operations plan: Present the action plan for executing on your company’s vision.

 

  • Concept vs. reality. The operations plan transforms the business plan from concept into reality. Investors do not invest in concepts; they invest in reality. And the operations plan proves that the management team can execute on your concept better than anybody else.


  • Everyday processes. Detail the short term processes and systems that provide your customers with your products and services.


  • Business milestones. Lay out the significant long-term business milestones for the company, and prove that the team will execute on the long-term vision. A great way to present the milestones is to organize them into a chart with key milestones on the left side and target dates on the right side.


  • Be consistent. Make sure that the milestone projections are consistent with the rest of the business plan – particularly the financial plan.


  • Be aggressive but credible. Presenting a plan in which the company grows too quickly will show the naiveté of the management team, while presenting too conservative a growth plan will often fail to excite an early stage investor (who typically looks for a 10X return on her investment).



Financial Plan

Goal of the financial plan: Explain how your business will generate returns for your investors.

 

  • Detail all revenue streams. Be sure to include all revenue streams. Depending on the type of business, these may include sales of products/services, referral revenues, advertising sales, licensing/royalty fees, and/or data sales.


  • Be consistent with your pro-forma statements. Pro-forma statements are projected financial statements. It is critical that these projections reflect the other sections of your business plan.


  • Validate your assumptions and projections. The financial plan must detail your key assumptions, and it is critical that these assumptions are feasible. Be sure to use competitive research to validate your projections and assumptions versus the reality in your market place. Assessing and basing financial projections on those of similar firms will greatly validate the realism and maturity of the financial projections.


  • Detail the uses of funds. Understandably, investors want to know what, specifically, you plan to do with their money. Uses of funds could include expenses involved with marketing, staffing, technology development, office space, among other uses.


  • Provide a clear exit strategy. All investors are motivated by a clear picture of your exit strategy, or the timing and method through which they can “cash in” on their investment. Be sure to provide comparable examples of firms who have successfully exited. The most common exits are IPOs or acquisitions. And while the exact method is not always crucial, the investor wants to see this planning in order to better understand the management team’s motivation and commitment to building long-term value.



Above all, the business plan is a marketing document that helps to sell the investor on the business opportunity, the management team, the strategy, and the potential for significant return on investment.

Raising venture capital is a difficult and time-intensive challenge. There is no easy shortcut or silver bullet. However, you can greatly improve your chances of raising venture capital by writing a business plan that speaks directly to the investor’s perspective.

Ready to get started? Download Growthink's business plan template and finish your business plan today.

 

 

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About Growthink

Since 1999, Growthink's professional business plan writers and investment bankers have assisted more than 2,000 clients in launching and growing their businesses, and raising more than $1 billion in growth financing.

 

Need help with your business plan?

Speak with a professional business plan writer today.


Raising money from individual "angel" investors?


Contact our private placement memorandum experts.

Or, if you're developing our own PPM, consider using Growthink's new private placement memorandum template.


20 Reasons Why You Need a Business Plan


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business plan1. To prove that you’re serious about your business. A formal business plan is necessary to show all interested parties -- employees, investors, partners and yourself -- that you are committed to building the business.

2. To establish business milestones. The business plan should clearly lay out the long-term milestones that are most important to the success of your business. To paraphrase Guy Kawasaki, a milestone is something significant enough to come home and tell your spouse about (without boring him or her to death). Would you tell your spouse that you tweaked the company brochure? Probably not. But you'd certainly share the news that you launched your new website or reached $1M in annual revenues.

3. To better understand your competition. Creating the business plan forces you to analyze the competition. All companies have competition in the form of either direct or indirect competitors, and it is critical to understand your company's competitive advantages.

4. To better understand your customer. Why do they buy when they buy? Why don’t they when they don't? An in-depth customer analysis is essential to an effective business plan and to a successful business.

5. To enunciate previously unstated assumptions.
The process of actually writing the business plan helps to bring previously "hidden" assumptions to the foreground. By writing them down and assessing them, you can test them and analyze their validity.

6. To assess the feasibility of your venture. How good is this opportunity? The business plan process involves researching your target market, as well as the competitive landscape, and serves as a feasibility study for the success of your venture.

7. To document your revenue model. How exactly will your business make money? This is a critical question to answer in writing, for yourself and your investors. Documenting the revenue model helps to address challenges and assumptions associated with the model.

8. To determine your financial needs. Does your business need to raise capital? How much? The business plan creation process helps you to determine exactly how much capital you need and what you will use it for. This process is essential for raising capital for business and for effectively employing the capital.

9. To attract investors. A formal business plan is the basis for financing proposals. The business plan answers investors' questions such as: Is there a need for this product/service? What are the financial projections? What is the company's exit strategy?

10. To reduce the risk of pursuing the wrong opportunity. The process of creating the business plan helps to minimize opportunity costs. Writing the business plan helps you assess the attractiveness of this particular opportunity, versus other opportunities.

11. To force you to research and really know your market. What are the most important trends in your industry? What are the greatest threats to your industry? Is the market growing or shrinking? What is the size of the target market for your product/service? Creating the business plan will help you to gain a wider, deeper, and more nuanced understanding of your marketplace.

12. To attract employees and a management team. To attract and retain top quality talent, a business plan is necessary. The business plan inspires employees and management that the idea is sound and that the business is poised to achieve its strategic goals.

13. To plot your course and focus your efforts. The business plan provides a roadmap from which to operate, and to look to for direction in times of doubt. Without a business plan, you may shift your short-term strategies constantly without a view to your long-term milestones.

14. To attract partners. Partners also want to see a business plan, in order to determine whether it is worth partnering with your business. Establishing partnerships often requires time and capital, and companies will be more likely to partner with your venture if they can read a detailed explanation of your company.

15. To position your brand. Creating the business plan helps to define your company's role in the marketplace. This definition allows you to succinctly describe the business and position the brand to customers, investors, and partners.

16. To judge the success of your business. A formal business plan allows you to compare actual operational results versus the business plan itself. In this way, it allows you to clearly see whether you have achieved your strategic, financing, and operational goals (and why you have or have not).

17. To reposition your business to deal with changing conditions. For example, during difficult economic conditions, if your current sales and operational models aren’t working, you can rewrite your business plan to define, try, and validate new ideas and strategies.

18. To document your marketing plan. How are you going to reach your customers? How will you retain them? What is your advertising budget? What price will you charge? A well-documented marketing plan is essential to the growth of a business.

19. To understand and forecast your company’s staffing needs. After completing your business plan, you will not be surprised when you are suddenly short-handed. Rather, your business plan provides a roadmap for your staffing needs, and thus helps to ensure smoother expansion.

20. To uncover new opportunities. Through the process of brainstorming, white-boarding and creative interviewing, you will likely see your business in a different light. As a result, you will often come up with new ideas for marketing your product/service and running your business.

 

 

 

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About Growthink

Since 1999, Growthink's business plan experts have assisted more than 1,500 clients in launching and growing their businesses, and raising more than $1 billion in growth financing.

Need help with your business plan? 

 


Ideas That Spread, Win


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Seth Godin’s Purple Cow has a relatively simple premise that new products need to be truly remarkable in order to succeed. His book is packed with great examples and insights.

In this video, Godin starts off by explaining the failure of the sliced bread machine and explaining that ideas that spread, win. Worth watching:


Baseball and the Science of Effective Business Building


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Over the last thirty years, baseball statistician Bill James has revolutionized the way that players, managers and fans think about statistics in baseball. By carefully analyzing statistics, James has dispelled numerous myths and has shifted the Boston Red Sox management’s decision-making process from one based on intuition and “gut” to a rigorously fact-based approach.

What has been the result? After decades of loss and heartbreak, the Red Sox have won two World Series Championships in the past 5 years.

Bill James’ analyses have dispelled many myths and have helped both the Red Sox and much of the industry focus on proven measures of performance. For example, James was a leading force in emphasizing the significance of on-base percentage over a player’s batting average. On-base percentage, James argues, is a more significant statistic, since batting average fails to account for bases gained from walks.

Regarding batting strategy, James says that the order of the line-up is inconsequential to overall performance, and that the concept of a “clutch” hitter is nonsense.

On the subject of a player’s lifetime performance, James concluded that the “prime” years of a baseball player’s career are his mid-late 20s. The Red Sox took James’ recommendations into account when deciding against re-signing star player Johnny Damon.

Regarding pitching strategy, James argues that “closers” – pitchers traditionally brought in during the final inning(s) of a game – should instead enter at critical moments when a team’s lead is at stake (e.g. perhaps in the 6th inning), rather than waiting longer.

What does all of this have to do with business building and entrepreneurship?

James makes a compelling case that all businesses – not just professional baseball teams – can benefit from careful statistical analysis. Such analysis can dispel unfounded theories, identify significant measures of performance, and illuminate creative, counter-intuitive strategies to bolster a business’ competitive advantage.

James’ fact-based analytical approach is especially valuable for emerging companies who are competing against larger, more established businesses.

If Bill James were to analyze your industry or your business operations, what myths would he dispel? What performance benchmarks would he stress? What strategies would he recommend?

  • Bill James was profiled on CBS’ 60 Minutes last Sunday. You can read more about the episode and watch a clip here.

  • An excellent book on this topic of statistical analysis is Competing on Analytics: The New Science of Winning by Thomas H. Davenport and Jeanne G. Harris. It's available for sale on Amazon here.

Secrets of Investing in Startups and Emerging Companies


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We just released a white paper titled "Secrets of Investing in Startup and Emerging Companies." It provides tips and advice for those looking to make early stage investments in private companies.

We're releasing the report in the midst of strong "angel" investing activity in the United States. According to the University of New Hampshire's Center for Venture Research, in 2006, there were approximately 234,000 active individual angel investors and approximately 49,500 private companies which received funding from individual investors.


Early stage angel investment can produce stratospheric returns on investment. Our report cites the famous example of Google's first private investor, Andy Bechtolsheim, who wrote a $100,000 check to Google in 1998 when it was an early stage private company. That $100k investment grew to be worth $1.5 billion.

And, according to more than 20 years of data collected by Thomson Financial, early and seed stage private company investing has over the long-term, outperformed all other investment classes -- with average annual returns of over 20.6%.

The report provides an overview of private investing, including its benefits and risks, and key advice for successfully investing in early stage private companies, including:

- How to Find, Evaluate, and Profit from Early Stage Investment Opportunities
- How to Position Yourself to Earn Outsized Returns
- How to Mitigate Your Risk Through Diversification and Investment Monitoring

To download the report, please follow this link: Secrets of Investing in Startups and Emerging Companies.


The 25 Most Successful Musician-Entrepreneurs


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Many musicians are happy just creating music and enjoying the lifestyle that being a famous musician provides. However, a lot of pop, rap & rock stars have interests beyond music, including a passion for entrepreneurship.

 

Here is a list of the 25 most impressive musician entrepreneurs. While it’s tough to compare people in different fields, here are some of the factors that weighed heavily for these rankings:

 

  • Success.

 

  • Diversity. When it comes to musicians, there are certain ventures that are more popular than others (as evidenced by the number of clothing lines you’ll see below). Bonus points for anyone willing to try something unique.

 

  • The artist’s DIY attitude. In other words: How personally involved are they in these entrepreneurial ventures? Do they take an active role, or do they just lend out their name and let others do the dirty work?

 

Here we go…

 

 

25) Benji & Joel Madden

 

The brothers of Good Charlotte, who once sang negatively about the “Lifestyles of the Rich & Famous,” made themselves both rich and famous with their music and their clothing line. The Maddens started MADE Clothing in 2005, and eventually renamed the company DCMA Collection after expanding into hats, belts and other accessories. MADE/DCMA has become very popular with celebrities such as Paris Hilton, as well as artists and fans within the pop/punk music genre.

 

 

 

 

 

24) Kanye West

 

Kanye dropped out of art school and made a name for himself in the music business, first as a producer and then as a solo artist. Since achieving success, Kanye has set up his own record label (GOOD Music) and written a book (Thank You and You’re Welcome! - due in 2008). He also plans to open a café in Washington D.C., with some help from his father.

 

 

 

 

 

 

23) Pharrell

 

Pharrell Williams made a name for himself producing, but he also released hits with his group N.E.R.D. Known for his fashion as well as his music, Pharrell started both a clothing line (“Billionaire Boys Club”) and a footwear line (“Ice Cream”). These ventures uniquely fuse rock, hip hop and skateboarding culture.

 

 

 

 

 

 

22) Alicia Keys

 

In 2006, a 24-year old Alicia Keys started her own production company and signed a deal to produce a sitcom for the CW Network. Keys, who has been described as a “workaholic” and an “independent person,” also acts as the spokesperson for various charities. She has acted in a number of TV shows and movies. Keys also co-founded KrucialKeys Enterprises, a musical production and songwriting company.

 

 

 

 

 

21) Moby

 

In 2002, electronic artist Moby and his girlfriend opened a café called TeaNY in Manhattan’s Lower East Side. The vegetarian/vegan tea café was designed to be a hangout for New Yorkers, but eventually grew into a major attraction. TeaNY features about 100 different types of tea, all of which can be purchased online. The company expanded by partnering with White Knight Beverages and creating a line of bottled iced tea.

 

A natural businessperson, Moby is known for his progressive attitude toward licensing songs. He was instrumental in lessening the “sell-out” stigma once frequently attached to artists who licensed songs to commercials.

 

 

 

20) Dexter Holland

 

Dexter Holland, front man of The Offspring, started his own independent punk label in 1994, right around the same time The Offspring was experiencing mainstream success. Along with co-founder and Offspring bassist Greg Kriegel, Holland has run Nitro Records ever since, introducing new punk artists to the mainstream while allowing them to maintain artistic integrity. Holland also found time to create his own brand of hot sauce (called “Gringo Bandito”), which can be purchased online or in grocery stores across California.

 

 

 

 

19) Gene Simmons

 

Since the inception of KISS several decades ago, Gene Simmons has sold the KISS name to every product imaginable, from KISS checkers to KISS bowling balls to the KISS Kasket (yes, that is a real product). In fact, Simmons has approximately 2,500 licensing deals in total. When not making money from licensing, Simmons has kept busy with a variety of entrepreneurial ventures, including his own record label, TV shows and autobiographies.

 

 

 

 

 

18) Bono

 

In addition to fronting U2 for the past three decades and working as a political activist, Bono has undertaken a number of business ventures. In 1992, Bono and band mate Edge purchased The Clarence, a two-star Dublin hotel. They did a complete renovation and turned The Clarence into a luxury 5-star hotel. In the early 2000s, Bono and a handful of elite businessmen founded Elevation Partners, a private equity firm focusing on intellectual property. To date Elevation has invested over a billion dollars in various media projects.

 

Bono also unveiled his own clothing line in 2005. The line of blazers, t-shirts and jeans was created by Bono, his wife Ali, and designer Rogan. The clothing line was designed to provide jobs and money for impoverished citizens of Africa.

 

 

17) Gwen Stefani

 

In 2004, Gwen Stefani founded L.A.M.B., a fashion line heavily influenced by Asian and Central American culture. The L.A.M.B. name comes from Stefani’s first solo album, and Stefani is involved with all facets of production. In 2005, Stefani branched out into accessories. She also created her own line of cell phones and cameras. Her latest venture is a fragrance line, launched in 2007.

 

 

 

 

 

 

16) Queen Latifah

 

Dana Owens, known to most as Queen Latifah, was a trendsetter for rappers and musicians-turned-actors. Owens is President of Flavor Unit Productions, and has production credits for a bunch of films and TV shows. She has hosted her own talk show, starred in a sitcom, acted in several movies, and written an autobiography. Owens is also a spokesperson for Cover Girl cosmetics, where she created her own make-up line for the company.

 

 

 

 

 

 

15) David Bowie

 

David Bowie was ahead of his time as a musician, and when he became an entrepreneur, that didn’t change. Bowie started a technology company and an Internet service provider in the late 90s, making him one of the first musicians to fully realize the power of the web. In the early 2000s, Bowie started his own record company to free himself of the corporate structure of his previous label. He also runs a website where art students can sell their work without the burdens of a traditional art gallery (www.bowieart.com). These days, Bowie uses his website (www.davidbowie.com) as a means of promoting the artists on his label.

 

 

 

 

14) Beyoncé

 

Even when she was part of Destiny’s Child, Beyoncé was known for her style, so it’s no surprise that she formed her own fashion line, House of Deréon, in 2004. Beyoncé made House of Deréon into a popular worldwide brand by promoting it on “Oprah” and “The Tyra Banks Show.” Beyoncé even snuck a plug into one of her songs, singing “Shake your derriere in them Deréons” on the track “Get Me Bodied.”

 

In addition to being an entrepreneur, Beyoncé also makes a ton of money from sponsorships with companies such as Pepsi, L’Oreal, Emporio Armani, Samsung, American Express and DirecTV. Her net worth is currently in the neighborhood of $300 million.

 

 

13) Victoria Beckham

 

Even though Victoria Beckham was in one of the most successful pop groups ever, she’s just as well known for being a style icon. In 2004, Beckham designed a line of jeans for Rock & Republic, and in 2006 she launched her own fashion line called dvb Style. The dvb brand specializes in jeans and eyewear, but Beckham has also launched a fragrance line and designed handbags and jewelry for a Japanese company. Beckham doesn’t just lend her name to these products; she is involved with all stages of production. In addition to her fashion achievements, Beckham has written two books and signed a reality TV deal. For all of these accomplishments, Beckham was named Glamour Magazine’s “Entrepreneur of the Year” in 2007.

 

 

 

12) Sammy Hagar

 

While many fans preferred David Lee Roth as singer, Sammy Hagar is definitely the Van Halen front man you’d want running your company. In the 80s, Hagar opened the resort Cabo Wabo in Cabo San Lucas, Mexico. The resort has become such a hit that Hagar opened a second location in Lake Tahoe, UT, but what’s more impressive is the brand of tequila it spawned. Hagar created Cabo Wabo tequila in 1996 as the “house” liquor, but has since taken the brand worldwide. In 2006, more than 140,000 cases of Cabo Wabo tequila were sold. In 2007, Hagar sold 80% of the Cabo Wabo tequila brand to beverage company Gruppo Campari for $80 million.

 

 

 

 

11) Ludacris

 

Ludacris (a.k.a. Chris Bridges) has a business degree from Georgia State, and while he may have chose to pursue music, that degree definitely came in handy. When Ludacris couldn’t get a record deal, he stopped trying to impress execs and started his own label instead. For the past decade, Luda has transformed Disturbing tha Peace Records from an avenue for releasing his own records into a major company, signing hit artists such as Chingy and Bobby Valentino. And while many rappers go into acting, Ludacris has done it better than most, appearing to critical acclaim in Crash, 2006’s Best Picture. Ludacris will also be opening a $2.7 million upscale restaurant in Atlanta in April, and is considering additional restaurants as well.

 

 

 

10) Madonna

 

In the late 1970s, Madonna dropped out of college and moved to New York with just a few dollars. Today she is worth approximately $325 million, mostly because of her business savvy. Madonna is known for staying ahead of trends, musically and in her business ventures. Her 1992 book, Sex, was both extremely controversial and extremely popular. She has started an entertainment company, a publishing company, and a clothing line. She is also an avid investor. One business professor even called Madonna “America’s smartest businesswoman.”

 

 

 

 

9) Dr. Dre

 

In 1995, unhappy with the direction of his record label, Dre formed his own label, Aftermath Entertainment. Aftermath hit it big by signing popular artists such as Eminem and 50 Cent, and throughout the 2000s Dre has consistently been one of the top earners in all of music. Dre, a long-time director of music videos, has announced that he will begin producing films for Crucial Films in the near future. He also recently signed a partnership to “develop and market” both alcoholic and non-alcoholic beverages for Drinks America. Dre is well-known for being a perfectionist, a trait that has both earned him respect and caused difficulties between him and other artists.

 

 

 

 

8) Justin Timberlake

 

Justin Timberlake has been omnipresent in the music business since 1998, so it’s amazing that he has time to branch out into other areas. Timberlake has opened a handful of restaurants, including the new Southern Hospitality in New York City (seen in Timberlake’s Super Bowl commercial). He also, along with a lifelong friend, launched a clothing line sold through Bloomingdales. Recently Timberlake started his own record label, Tennman Records. In a very forward-thinking maneuver, he signed YouTube sensation Esmee Denters as the label’s first artist.

 

 

 

 

7) Jennifer Lopez

 

After succeeding in music, J.Lo launched a clothing line in 2003, and made everything from jeans to lingerie to gloves. Lopez also launched various accessory lines, a jewelry line, 9 fragrance lines, and even a children’s clothing line, resulting in a net worth of over $250 million. In addition to her fashion businesses, Lopez owns a production company called Nuyorican Productions. The company has produced both reality shows and feature films. In 2002, Lopez opened a restaurant called Madre’s in Pasadena, CA. She helped design the interior, and many of the dishes are inspired by her grandmother’s cooking.

 

 

 

 

6) Jermaine Dupri

 

As a teenager, Jermaine Dupri became a successful producer when he discovered the 12-year old rap sensations Kriss Kross. He went on to produce hits by TLC, Janet Jackson and Mariah Carey, among others. Along the way, Dupri founded So So Def Recordings, and became one of the most respected figures in music. He started So So Def Sports, a sports management company. He is owner and partner of 3 Vodka Distilling, makers of high-end alcohol. In 2007, he released an autobiography. And on top of these entrepreneurial ventures, Dupri was appointed President of Island Records’ urban division in 2007.

 

 

 

 

5) Pete Wentz

 

Wentz, the bassist for Fall Out Boy and idol to teenage girls worldwide, is also an active entrepreneur. Wentz runs his own record label, Decaydence Records, which is currently thriving despite the declining state of the music industry. Wentz also started a clothing company called Clandestine Industries in 2004. His clothes are extremely popular amongst fans of the emo/punk genre.

 

Wentz is also an author, having published a fictional book titled The Boy With The Thorn In His Side. Last year, Wentz opened a bar in Manhattan called Angels & Kings. He plans on putting out another book and opening a hair salon in the near future.

 

 

 

 

4) Master P

 

Percy Miller, a.k.a. Master P, started No Limit Records in 1990 with $10,000 that he received from a wrongful death lawsuit after his grandfather passed away. By the late 90s, Miller was a multi-millionaire and No Limits was worth an estimated $661 million. Among the company’s holding were a clothing line, a film company, a sports management agency, and a real estate company. Master P even tried to play in the NBA, nearly making the Charlotte Hornets’ roster in 1998.

 

Master P’s career has cooled down considerably since the 90s, and No Limit was reorganized in 2004, but Miller is still involved in many entrepreneurial ventures. He is currently developing a video game, and he also releases music via a new label, Guttar Music. Miller co-founded Guttar Music along with his son Romeo, who is a freshman at USC.

 

 

 

3) 50 Cent

 

Curtis Jackson is one of the most popular and best-selling rappers of the decade, but he’s actually made most of his money outside of music. Jackson developed the G-Unit Clothing Company in 2003 and signed a deal with Reebok to distribute his G-Unit sneaker line. Along with the beverage company Glacéau, Jackson created and marketed a Vitamin Water flavor called “Formula 50.” When Glacéau was purchased by Coca-Cola in 2007, Jackson reportedly made over $100 million after taxes as part of the deal. Like so many others on this list, 50 has his own record label, G-Unit Records. He is also an actor and author.

 

 

 

 

2) Jay-Z

 

Shawn Carter co-founded Roc-A-Fella Records in 1996, and over the past 12 years he has grown the fledgling label into a massive empire using both his musical abilities and his business savvy. Roc-A-Fella now features a production company and a Spanish music label, and the company also owns U.S. distribution rights for the high-end Scottish vodka Armadale. Jay-Z and Roc-A-Fella famously created Roc-A-Wear, an incredibly popular clothing line that was sold last year for $204 million dollars.

 

In 2004, Jay-Z sold his stake in Roc-A-Fella and became President and CEO of Def Jam Recordings, where he remained until a few months ago. Jay is also part owner of the New Jersey Nets, and the 40/40 Club in New York City. Currently worth over $500 million, Jay-Z shows no signs of slowing down.

 

 

1) Diddy

 

There’s nothing Sean Combs can’t do. Diddy worked his way from humble beginnings into Howard University’s business school. There, he preferred to spend his time working and making money rather than studying. By age 21, Diddy was developing talent at Uptown Records in New York, while also working as a back-up dancer in music videos. In 1993 he left Uptown to form Bad Boy Records, which became home to many big-time artists, most notably Notorious B.I.G.

 

Bad Boy is now an empire worth hundreds of millions, and Diddy has set up many other ventures. His Sean John clothing line is extremely popular and worth millions. His Unforgivable fragrance, launched in 2006, sells for roughly $70 a bottle. He serves as CEO of Blue Flame Marketing and Advertising. Last year, Diddy signed a deal with Diageo PLC to promote Ciroc Vodka. He’ll have a major role in the vodka’s branding and marketing, and he’ll split profits 50-50. Diddy also created (and appears on) the TV series “Making Da Band.” In 2004 he acted in the Broadway play “A Raisin in the Sun,” and he recently starred in the Made-For-TV version of the play. Diddy also owns restaurants in New York and Atlanta (named “Justin’s,” after his son). And if that’s not enough, Diddy holds the honor of having designed the Dallas Mavericks’ green alternate jerseys. All of this amounts to a net worth of roughly $350 million.

 

While music critics might tell you Diddy can’t rap, few people will deny that he’s a truly amazing businessperson. As Diddy himself once said, “Don’t worry if I write rhymes… I write checks.”

 

 

 

Let us know what you think. Who is the best musician entrepreneur, and what other musicians deserve to be on the list?

 

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Landing Page Optimization, Business Planning and Google's Success


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Over the past few weeks, I've spent a lot of time studying a field called Landing Page Optimization. It's a fascinating field that deals with improving landing pages, which are the pages of your website that visitors come to either organically or through paid marketing initiatives. The goal of Landing Page Optimization is to maximize conversions (e.g., sales, newsletter signups, etc.) of these visitors.

One of the guiding principles of landing page optimization is that landing pages need to be simple. If there is too much information on the page, the reader gets confused and either clicks the back button or closes the browser.

This principle is the same as a guiding principle of business plan development; mainly that the plan, and particularly the executive summary, needs to present the business concept concisely so that the audience quickly understands it. If not, they will simply discard the business plan.

Interestingly a concise message might not only improve your business plan and your landing page, but your entire business’ success. Consider the case of Google. The Google homepage has always had very little text on it. In fact, if you go to it, it doesn’t even say that it is a search engine. But, by having a big empty box in the middle and having a button underneath it that says “Google Search”, it is pretty intuitive that Google is a search engine.

Now, when someone was referred for the first time to Google over the past few years and came to Google.com, what do you think they did? Well, due to its simplicity, I think we can assume that nearly all people who came to Google.com typed in a search term and hit the search button. Then, they instantly saw high quality search results and were sold on the fact that Google is a great search engine.

So, by keeping their landing page and business concept/proposition extremely simple, Google was able to get people to try its product. Because the product is high quality, those trials resulted in loyal users.

While there are many examples out there, one interesting company that I think could really improve its business plan, landing page, and thus chance of success is SpinVox. I first read about SpinVox in this Guy Kawasaki post in which he says, “This service translates voicemail to text and then sends a text message to your phone and/or an email to your computer.”

While Guy Kawasaki does a great job clearly explaining SpinVox in this 22 word sentence, I don’t think SpinVox does. On its homepage, SpinVox has the following text:

"SpinVox captures spoken messages and cleverly converts them into text. It then delivers your message to a destination of your choice – inbox, blog, wall or space. Right in the moment. Giving you the power to Speak Freely... Simply put, we do one thing – turn voice into text. But it's one thing that can be applied to the many ways you communicate, from your Voicemail to your Blog. Use the finder below to find the right one for you."

If I were to come to this page without Guy Kawasaki’s clear explanation, I would most likely leave without trying the service. It neither clearly explains the most common use nor the value proposition of the service.

To sum up, KEEP IT SIMPLE. Use simplicity to hook the investor, the customer, the partner, or whoever else you are trying to influence. Once hooked, over time (which could be as little as 2 minutes later), you can tell the full story.


Growthink Client in the News: DCIP


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Last week, several theater chains and studios announced they were nearing an estimated $1.1 billion financing deal to upgrade cinemas to digital technology. This investment is expected to boost attendance and save Hollywood billions of dollars in various annual print and delivery costs.

"We're hopeful that in the second quarter we will get it all arranged," said Travis Reid, chief executive of Digital Cinema Implementation Partners (DCIP).

DCIP is a joint venture between Regal Entertainment Group, Cinemark Holdings Inc and AMC Entertainment Inc.

Growthink assisted in the development of the strategic business plan for the joint venture.

Read more about DCIP and digital cinema technology here and here.


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