Shrouded in the drumbeat of negativity that passes as international business reporting these days has been the bursting growth in U.S. Service Exports – increasingly from U.S. startups and small businesses.
Contrary to the image of imports and exports being only “stuff” flowing in and out of places like the Port of Long Beach, last month the Census Bureau noted that services accounted for 32%, or $60.3 billion of total U.S. exports in August. And unlike our huge “hard goods” trade deficit, in the value of U.S. service exports is 47% greater than that of imports, and growing.
Business, professional, and technical services are now the fourth largest U.S. export category, and represent close to 15% of global commercial service exports, making America hands-down the world’s dominant service exporter.
Of many, let me flag three main drivers:
1. Purchasing Power Parity. Purchasing Power Parity (PPP) posits that with free-flowing markets wages and prices worldwide approach parity.
Protectionist types interpret this to mean that “our wages will get pushed down to “their” levels – or more viscerally, “if this keeps up we’ll all soon be making $2 dollars per hour.”
Well, let’s leave for now the huge economic fallacy of this thinking and concentrate on the fact that the narrowing of the relative wealth differential between the U.S. and the rest of the world has allowed for phenomena like a Ukranian manufacturing company hiring U.S. advisors to help them define strategic growth opportunities in Poland and Eastern Europe
2. U.S. Services are Increasingly Exportable. The drumbeat always goes on how “we here in the U.S. don’t “make anything.” Well, beyond the fact, that as I note in my “Made In China” post that very few Americans dream that their children will grow-up and work in a factory, we here in America “make” the most important stuff that has ever existed and we do it better than any society has ever done so.
That stuff? Ideas and Innovations. Strategies. Or more prosaically, Brands. Websites. Entertainments in all their wondrous forms – Movies, Video Games, Social Networks.
Even our favorite whipping boy industry – financial services – continues to bring us world-bettering innovations like Venture Philanthropy (i.e. applying market principles to solve the world’s humanitarian challenges), Super Angel Funds (overcoming the “outlier” or “Black Swan” conundrum of startup investing) and Crowdfunding (democratizing fund-raising and investing in ways never before even dreamed possible.)
3. We are all Transparent. Perhaps my favorite, namely that business best practices worldwide are visible and replicable to and for all. And the corollary, the really screwed-up and ineffective ways of doing things are totally transparent too.
From lists like the “Most Business Friendly” countries to California now having a portal where parents can see teacher’s ratings to the U.S. Senate studying Chinese Technocrats to the simple reality that the Internet makes it crystal-clear to all who is winning and losing in the world (see North Korea, Iran, etc.), transparency breeds competition which breeds innovation which breeds the cream rising.
And who, when it comes down to doing business right, is the richest cream, the sweetest soup?
It is, of course, U.S. startups and smaller and emerging companies.
And as they, like the U.S. economy as a whole, continue to become increasingly services-focused, the best of them will continue to profit handsomely from the world of selling opportunities growing all around them.
2016 is just 30 days away.
And if you want to make 2016 your best year ever, you need to start planning now. So come January 1st, you’ll be off to the races.
To help you succeed, I’m hosting a complimentary Webinar this Thursday, December 3rd at two times:
12pm Eastern / 9am Pacific - Register Here
8pm Eastern / 5pm Pacific - Register Here
The webinar is called "How to Make 2016 Your Best Year Ever!" and I’m hosting it with Growthink's co-Founder and President, Dave Lavinsky.
On the webinar you will learn:
• How to dramatically increase your sales and profits in 2016
• The precise way to figure out the best opportunities to pursue in 2016
• How to set your 2016 goals so they are attainable and lead to your long-term success
• My #1 tactic for ensuring your breakthrough success in 2016
• And much, much more!
You can expect to hear a positive, motivating message loaded with golden nuggets to make 2016 an incredible year.
Click below to save your spot:
12pm Eastern / 9am Pacific - Register Here
8pm Eastern / 5pm Pacific - Register Here
P.S. Whenever I host a Webinar, I get a lot of emails asking if there will be a replay. Right now I don’t have any plans to do a replay -- so my advice is to be on the Webinar LIVE!
Last week, in Austin I had the opportunity to participate in a 2 - day “Mastermind-type” meeting with a gathering of technology and Internet entrepreneurs and executives from around the globe.
It was an impressive group - leaders of companies with average sales of $8 million and competing and prospering in industries that run the gamut - from consumer products, to healthcare IT, to energy and entertainment, to mobile apps and wearable technologies, to real estate, and more.
To those who have never participated in a business mastermind, you don’t know what you’re missing! Originally conceived by legendary personal development guru Napoleon Hill, a Mastermind is a gathering of like-minded professionals that meet regularly and over time develop a productive, high-trust dynamic through which to attain breakthroughs of insight and accountability around and about strategic, tactical, and management challenges.
Mastermind groups, both generic ones as I attended in Austin, branded versions like Vistage and YPO, and informal versions as organized by trained facilitators, are where the hard, methodical work of entrepreneurial business - building and growth gets done.
The “table topic” for our meeting was best practices as to data-driven decision making and strategic planning.
It is obviously a very timely one - as Big Data and Business Intelligence (BI) tools and software are at the center of vast swaths of venture capital financings and strategic and managerial best practices for companies of all types and sizes.
We talked about how the companies getting the highest “BI ROI” connect the dots between their "old" and "new" school strategic planning and thinking.
They are old school (in the absolute best, non-pejorative sense of the term) in that they recognize that strategy…
…arrived at through Mastermind get-togethers, through board and advisory board meetings, through strategic planning processes led either internally or by an outside consultant - remains fundamental in attaining and maintaining long-term business success.
And they are new school in their leveraging the very many best-of-breed business application software as services to arrive at this strategy.
Tools like CapitalIQ, Sage, KISSmetrics, AWeber, SurveyMonkey, RingCentral, Campaign Monitor, Zoho, Marketo, CAKE, FuseDesk, Maropost, and Hubspot that automate and optimize traditionally laborious and repetitive business functions.
And, as they do, collect massive reams on the marketing, sales, operations, finance and managerial performance of a business.
And, as importantly, the technology has finally matured to where all of this collected data can be organized, analyzed, and benchmarked against comparable - but better performing - companies from around the globe.
This “New School” data wizardry, when combined with old school Masterminding, risk-taking, and a ton of hard work…
…is what allows companies to both run more day to day efficiently and profitably, and more in strategic alignment with their missions and long-term goals than ever before.
It is not hyperbole to define a successful organization as one that finds the balance between a) making the right changes at the right time and b) having the discipline to “keep on keeping on” and just doing more of what is working.
Note well that b) is particularly hard to maintain when the tasks and activities that ARE working become repetitive and lack in excitement and drama.
So how does an organization find this balance - between thinking laterally and creatively and just keeping their heads down and plowing forward?
Well, luckily in the past few years a large and impressive business literature has sprung up that codifies best practices of how to balance this need to incorporate change in an organization with that to maintain doing “more of the good same.”
This thinking can best be summarized by the phrase “Immersion plus Spaced Repetition” and goes like this:
1. Everything, of course, begins with ideas, and the best, business ones normally arise from a series of individually and organizationally introspective strategic planning and goal-setting sessions that clarify objectives and the obstacles standing in the way of their accomplishment.
This immersive process - done at least annually but at organizations with ambition quarterly - both defines what needs to be done and inspires all of the participants to take on the hard and often painful work of getting it done.
The latter point here cannot be underestimated – Thomas Edison famously said that “genius was 99% perspiration and 1% inspiration” but that 1% “spark” is uber-critical in propelling an organization through the first threshold of change.
2. But, as anyone that attended an exciting or invigorating conference or strategic planning session can attest (and as I am sure Mr. Edison reflected on often during long nights at the lab), inspiration fades over time.
Even worse, when the inspiration is not followed through on, cynicism can set in and actually leave an organization worse off than if the planning sessions were never done in the first place!
So how to avoid this distressing fate?
3. Well, by keeping the ideas, goals, and objectives of the planning session alive through their regular review and adjustment.
Think of it this way - if a well-run strategic planning session is the essence of good leadership, then well run, spaced and repetitive goals and objectives reviews are the essence of good management.
Great managers check in with their teams as often as daily – if only for 5 or 10 minutes – to review the day’s objectives and to keep the shorter term work flow aligned with the longer term planning and mission objectives.
The old adage that the only way to eat an elephant is one bite at a time is never more true than when it comes to these spaced and repetitive management check-ins. When done right, they measure, acknowledge, and reward incremental progress and prevent the desire for the perfect from getting in the way of the doable and the done.
Now, at least annually and preferably quarterly, the entire organization needs to reconvene to review actual progress versus stated goals, to assess what worked and what got off track, and then to refine and define updated goals and objectives.
And after this next round of strategic planning sessions, what is to be done?
Well, the spaced and repetitive management check-ins begin anew. Wood is chopped, water is carried.
Following this simple but disciplined formula, over time great ideas become great realities, businesses are built, and legacies and fortunes are made.
And for investors, far more than technology it is these “above the line” leadership and management disciplines that separate the well-run companies to back from the haphazardly ones to avoid.
If you're not familiar with Zig Ziglar, he was a well-known author, master salesman, and motivational speaker. Unfortunately Zig passed away last November. I apologize for taking so long to honor him with this essay, in which I tell my favorite Zig Ziglar story.
In Zig's early years as a salesman, he visited peoples' homes, making presentations to sell them high-quality cookware.
He had a competent assistant at the time who helped him keep track of appointments and handled administrative duties. One week, however, Zig realized he had two appointments scheduled for the same time. Not waiting to cancel any appointments he asked his assistant to cover one of the appointments for him.
She was terrified. She did not want to do it and he wasn't going to make her!
Being the consummate salesman that he was, Zig eventually got her to calm down. Then he assured her that she knew the presentation as well as he did, and that she would do great. After he solemnly promised to never ask her to do a presentation again, she agreed to cover the appointment just that one time.
Zig recounts that at the end of the evening, she was convinced she had fumbled half the presentation. But, to her surprise and delight, the clients ordered quite a bit of cookware. Most surprising, is that when she got over her nerves, she found she rather enjoyed the experience.
His timid and sales-panicked assistant evolved into a top notch salesperson, was his right hand partner for many years, and years later (with his delighted consent) became a highly-sought out and respected sales trainer for a leading cosmetic company.
Zig shared this story to show human potential. He puts all the praise on her and generously applauds her for her accomplishments. While I am inspired by her transformation, I want to focus on his role in her transformation because I believe that was Zig's greatest gift to the business world. Yes, his sales training is worth bars of gold, but ultimately what really made him a success was his ability to develop others.
He could have made millions as a star salesperson. He could have kept his philosophy, his techniques, and his secrets to success all to himself. Instead, he made hundreds of millions by sincerely applying himself to improving everyone around him who was willing to listen.
Zig Ziglar was a true leader.
Yes, he sold books, and videos, made speeches, and made money, but he invested in people. He believed that the success of a company was largely dependent on the quality of their sales force, and the quality of their sales force was solely dependent on how much that force really cared about helping people.
And, a sales force isn't going to care about helping anyone if they don't feel that their company cares about them.
Zig could have benched his assistant, sent her right back to her phone and typewriter after she covered that one appointment. Instead, he nurtured her potential and encouraged her to continue developing her sales skills. Now think about this, how much more money did Zig make by having her on his team at her full potential instead of at her lowest potential?
How much more money will your company generate if you make the time to develop your team to their full potential? Beyond just money, how much loyalty will you cultivate? Will you feel more confident about your future success when you have a top-notch team you can trust? How many talented people will want to work for you when the word gets out about your leadership?
Yes, it takes time and energy, yet Zig demonstrated over and over that when you invest in helping someone be the best version of themselves possible, the rewards, material and otherwise, greatly outweigh the sacrifice.
Zig Ziglar died in November of 2012. He left behind dozens of books, thousands of hours of video and audio, and most of all, he left behind millions of grateful professionals whose lives were touched and even changed by the empowering lessons he left behind. His message that you could accomplish more in life and in business through caring and investing in the success of others is a timeless gem that lives on.
As he once said, "You can have everything in life you want, if you will just help other people get what they want."
Rest in peace Zig. We'll miss you. And for all of you listening, develop your employees and customers, and everyone around you, to their full potential, and you will achieve incredible success!
It is remarkable how large the accountability gap has grown between what is considered normal and expected in the world of business and private enterprise…
…and the profound lack of accountability that sadly we have become so accustomed to and from the other major Institutions of our society - Government, Education, Healthcare, Religion, Etc.
It goes like this: Businesses must deliver daily on their product and service promises or a) Customers just stop buying and b) significant reputational damage is effected in this “Online Star Rating” world of ours.
For everybody else? Not so much.
Imagine, with its 9% approval rating, what Congress’ ’“Yelp” / “Trip Advisor” star rating would be?
Or, for that matter, what it would be for our local high school, community college, or hospital?
And, at the risk of controversy, I think most religious leaders would seriously shirk from having their institutions’ reputational scores widely shared with the general public.
Now, one could say that - because the intents of most businesses are so different from these other institutions - that this is an unfair comparison.
Or that we can’t define “accountability” for these other institutions because of the legitimate “values” disagreements within them - i.e. for education is the accountability around teaching say - hard work or creativity?
For government is it about liberty or equality? For healthcare longevity or wellness?
To this I say poppycock!
Like for $50,000 per year for average private school tuition, how much hard work and / or creativity are universities really teaching our young?
Or for the 35% of the wealth of our society that local, state, and federal governments appropriate, how much freedom and how much equality are we really getting? Or more prosaically, for what we are paying for it how high is the quality of our airports, roads, schools, and parks?
Or how much wellness are we getting for that $2,600 MRI?
Or that $30,000(!) average hospital stay cost?
The answer, of course, is that if even the most mediocre of businesses were given access to the resources that these other institutions have that the value and customer ROI delivered per dollar spent would increase dramatically.
So how can the ambitious entrepreneur and executive leverage this accountability gap to their advantage and gain?
Well, for starters, step out more and shout from the rooftops how proud you are to be In Business – both in general and specifically as to the value your business delivers.
It is good for our personal psyches, and is inspirational for all when some of the spotlight and attention is taken away by "the other guys."
And then, reflect long hard on the connection between the experiences of your customer, the accountability mindset within your organization, and your business's online reputational scores.
Improving any of them is almost always dependent on improving all of them.
Through this Kaizen - this commitment to constant improvement - will not just further widen the accountability gap between business and all of the other institutions of our society…
…but that between our tightly measured and always improving enterprises and our more “fuzzily run” competition.
It was business star-studded affair - 150 Silicon Valley technology executives and investors gathered together to network and brainstorm on IoT - described by many as fundamental a technology shift as the emergence of the Internet itself was in the 1990's.
As I wrote after the 2014 event, this premise of a world where online connectedness is no longer a computer/ tablet/smart phone thing, but is now woven into the very fabric of our cars, buildings, equipment, minds, and bodies is unnerving to many, including to the event’s panelists from companies like Chevron, Cisco, CSAA, Invensense, Schneider Electric, Splunk, Stanford Health Care, and the U.S. Navy.
But far more then balancing this threat and concern is the almost limitless variety of New Business Models, Work Process Improvements and Personal Delights an IoT world makes increasingly possible.
New Business Models. The ability to measure outputs, in real time, allows for fractionalized delivery of traditional industrial services - like as mentioned by Splunk CTO Snehal Antani - the rental and leasing forklifts not by a period of time (i.e. hour, day, year) but instead by the amount of lift of weight lifted and moved.
The result? Both a vast expansion of a potential customer base for a product/service and a delivery of it in exactly the way those new customers wish to purchase and consume.
Work Process Improvements. Panelists ranging from Chevron's CIO Alysia Green to Stanford Healthcare's CIO Dr. Pravene Nath made the powerful point that an Internet-connected sensor on “everything” allows for work process improvements ranging from the safety of a refinery technician approaching a pressurized valve to the ability to predict the exact time when a doctor will see their patient. On a case x case basis, perhaps barely noticeable incremental improvements, but transformative in their aggregate.
Personal Delights. For me, the most inspirational takeaway from the gathering was IoT’s under-stated potential to make our lives more “Personally Delightful” on a day-to-day basis.
At the event Ron shared his vision for Enjoy, where customers buy and have delivered and installed IoT devices like iPhones, Sonos Home Theater Systems, Withings Smart Body Analyzers, GoPro Cameras, and of course laptops and desktops.
His key point was that only in a “Internet-Connected Sensors Everywhere: IoT world is the Enjoy business model possible – one where Enjoy can hire, train, and deploy highly competenet and empathetic “Fellow Humans” to show and teach us how to make all of the IOT things in our life work for, empower, and not frustrate us.
So whether we like it or not, The IoT world is both here and coming.
What GTK's and Pillsbury’s IoT event taught me last week is that we can make money in it, be safe in it, and with a little help from our Internet friends, enjoy it too.
On many levels, competition is good.
For example, when you start a business, you want there to be competition. Since if there was no competition, there may not be a market or customers who want to buy what you are selling.
And once in business, competition is generally good since it forces your company to get better. It forces you to better satisfy customers (or they will choose your competitors) and it forces you to become more efficient (so you reap more profits even if you have offer more competitive pricing).
Now, while competition does provide these advantages, you clearly want to have less competition, and you'd like for fewer new competitors to enter the market. In doing so, you'll enjoy more of a monopoly in your market, which means more customers and more profits.
The best way to knock competitors out of your market and discourage new entrants is to build "business assets" that your competitors don't have. (I define "business assets" as resources you build now that will give you and your company future economic value.)
Here are five examples of business assets you can build:
1. Customers: Most mobile phone companies offer 2 year service contracts that all new customers must sign (and face penalties if they leave before the two years are up). This essentially "locks up" customers making it harder for new entrants (or existing entrants) to come in the market and take their customers. Customer agreements and contracts are one of the most powerful business assets you can build.
2. Systems: Most franchise organizations (e.g., Subway, McDonalds, etc.) have made significant investments in systems in areas such as taking orders, producing products, handling customer complaints, etc. These systems make it easier and less expensive to hire and train employees and better service customers. This makes it harder for others to compete against them. Likewise, I know many companies who have built customized software systems that allow them to perform faster, cheaper, and more consistently than their competitors.
3. PPE (Plant, Property and Equipment): When I was a teenager, I made a lot of money shoveling snow. I used that money to buy a snow blowing machine. Equipped with the snow blowing machine, I was able to remove snow ten times faster than my competitors. This allowed me to dominate my local market.
4. Product or Service Variations: A local pizza shop promotes itself as having 36 varieties of pizza. Offering this large variety makes it harder for new pizza companies to enter the market. Because a new company would have a very hard time creating 36 varieties from the start, it would be harder for them to satisfy customers.
5. Exclusive Partnerships: Creating exclusive partnerships could be a key business asset that gives you competitive advantage. For example, if you create exclusive partnerships with top organizations in your industry, they would only work with you and not your competitors. For example, let's say you and a competitor both serve the senior market. But you have an exclusive relationship with the AARP whereby they only promote you, and not your competitors. With 37 million senior members, your AARP relationship would give you considerable advantage.
What I want you to consider now is how you can build business assets that "unlevel the playing field." How can you make it so that nobody wants to compete against you?
Importantly, whatever answers you come up with, realize that building these business assets will take time. Often times they may take as much as a year (or even longer). And also realize that short-term profits may go down when you are building them. For example, in the AARP example above, forging such a relationship could take 6-months, during which you invest lots of time and generate no incremental revenue.
But, once the asset is built, you may profit (and profit big) for years.
So make sure to properly plan and prioritize the development of your business assets, even though they often have less short-term benefits than other activities (such as setting up a new advertising campaign).
Set a long-term goal for when you want the assets built. And make sure that you build time into your daily, weekly and monthly schedules to move the development forward. Doing so will dramatically improve your revenues and profits, and at the dismay of your competitors who will be forced to go elsewhere.
I recently shared why business intelligence dashboards are now a must have for executives seeking to better understand, leverage, and ultimately profit from the treasure troves of data surrounding their businesses.
This data includes insight from their companies’ web and social media traffic, from its e-mail send and open rates, from its lead tracking systems and sales logs, from its product fulfillment records, and from its accounting software as it records revenues, expenses, and cash flows.
Pretty basic stuff, eh?
Well, maybe when viewed one source at a time, and/or over a limited time period with just a few data points, but given that a business doing as little as $1 million in revenues now has on average more than 20 data sources – from software services like Google Analytics, Salesforce, Quickbooks, ZenDesk, to dozens of Excel files and spreadsheets of every type and purpose, figuring what to do with it all quickly gets overwhelming.
And in business, when something gets overwhelming, what happens?
Yes, all of these treasure troves of data, insight, and intelligence just gets ignored.
Reports aren’t run. Or when they are run, they aren't read.
And when they are read, they are not really mined for insight, for “aha” moments and breakthroughs, for competitive advantage.
This sad state of affairs is the unfortunate reality for most executives in this information-overloaded business world of ours.
But not for everybody.
There are a select few that as opposed to being overwhelmed, are energized by all of this precious and unprecedented data.
That use it to both inform and confirm their "gut."
And when the data and their guts disagree? Well, more often than not they let the data hold the trump card.
These executives worship at the altars of both big and little things.
Big things like strategy, mission, vision, values, and culture.
But little things too like form conversion stats, proposal close ratios, page bounce rates, call hold times, quick ratios, and net margin growth to name a few.
How do they do it?
Well, first per the above, they have a functional relationship with data. They don’t whine about it nor are they consumed with how much of it there is.
And secondly, they don’t try to sift through and make sense of it by themselves.
They let technology do a lot of work for them. Both predictive analytics technologies like Civis, Kxen, Foresee, Angoss, and Verisium.
And strategic and business intelligence dashboard technologies like Domo, Pentaho, Birst, GoodData, and my firm Guiding Metrics.
Technologies that find the signals in the noise, and that help them win both the big and little games of modern business.
So now, how about you?
To Your Success,
P.S. Like to demo our dashboard offering? Then Click Here to learn more.
I recently shared the depressing statistic on how less than 1 out of 5 companies marketed for sale are able to find a buyer and to consummate a successful sale transaction.
And how even this depressing statistic vastly under-estimates how few companies are able to attain a successful exit, as the great majority of the over 6 million U.S. business owners because of how they are structured and run can’t even contemplate commencing a “business-for-sale” process.
What did they do / do they have that your company does not?
Well, from my more than 15 years of helping companies of all types and sizes breakthrough to new plateaus of growth and value, I have discovered three universal truths:
1. Most entrepreneurs and executives make the same strategic and tactical errors over and over again.
2. These are simple errors and easy to quickly correct.
3. When they are corrected, immediately an enormous amount of latent business value is untapped and unleashed.
Webinar Invitation: The Five Steps to Maximize Your Valuation
I would like to cordially invite you to join me on Thursday, October 22nd at 1 pm ET / 10 am PT for an invitation only webinar - The 5 Steps to Maximize Your Valuation - where I'll reveal the 5 steps you can take to dramatically increase the sale price of your business, and dramatically decrease the time needed to achieve it, including:
• The 3 Mistakes that most Entrepreneurs and Executives make that effectively render their businesses unsellable
• The 5 things that all business that sell for high valuations have and do
• A simple formula to determine how much your business could be worth if you execute the right plan
I assembled this webinar presentation in conjunction with both the Growthink Research team, which over the past year has performed industry, market, and competitive analyses for hundreds of high growth companies…
…and with the predictive analytics team at Guiding Metrics, who have are currently working with dozens of companies in automating and optimizing their key marketing, sales, operational and financial metrics.
The combined statistical insights of all of this “on-the-ground” business fieldwork are the basis of the to-be presented webinar findings and insights.
Market and economic conditions will probably never be better than they are right now. I encourage all leaders of companies frustrated with their low growth rate and unclear pathways to exit to attend, listen intently, and then act on this awesome webinar content.
Sign up Here: