Growthink Blog

Edison DID NOT Invent the Light Bulb


Categories:

Did you know that Thomas Edison DID NOT invent the light bulb.

Why do I tell you this?

Because every single day at least one entrepreneur contacts me with some fear about someone stealing their idea.

And their fear is unjustified.

Successful entrepreneurs don't focus on the fear of someone stealing their idea. Rather, they focus on executing on the opportunity by bringing their idea to market.

Which is what the 22 inventors of the incandescent light bulb before Thomas Edison FAILED TO DO.

That's right. Twenty-two inventors had the idea before Edison (not only did they have the idea, but 22 people actually invented incandescent electric lamps before Edison did).

And Edison didn't steal their idea. Rather, Edison improved on their idea by first understanding the market. He realized that a more commercially viable and longer lasting light bulb was needed if light bulbs were to go mainstream.

So, he and his team created this product and the rest is history.

The moral is that he who has the idea first generally doesn't win. In fact, if your idea is so good, usually others have thought of it before you or at the same time. The winner is the one who takes is to market first, tweaks it based on customer feedback, and scales the business.

Most people don't have what it takes to go from an idea to a commercially viable product to taking it to market. That's why spending tons of time and energy protecting your idea is often a waste of time. Since the people you're protecting your idea from can't execute anyway. And those that can (i.e., successful entrepreneurs) generally have a ton of their own ideas to focus on. So you should be spending your time on execution.

(Likewise most ideas change dramatically once you start getting customer feedback; and you NEVER get that feedback if you keep your ideas to yourself!)

Importantly, the world is littered with quality ideas which never materialize. From motivational speaker Les Brown:

The wealthiest place in the world is a cemetery. Now one would ask, "For what justifiable reason is the wealthiest place in the world a cemetery?"

Simply put, in a cemetery, you will find that there are books that were never written. There are songs that were never sung. There are ideas that were never acted upon-dreams that were long forgotten. If one were to die today, then what ideas and what aspirations would die with him or her?


So, please stop focusing so much on protecting your ideas, and start acting on them!


How to Build an Amazing Corporate Culture


Categories:

Reed Hastings, CEO and Founder of Netflix, was recently named Fortune's Business Person of the Year.  He is, in the mold of Tony Hsieh (Zappos), Richard Branson (Virgin, etc.), and Herb Kelleher (Southwest Airlines), truly an entrepreneur and businessperson to emulate. And the Netflix corporate culture one to strive toward...


3 Ways Entrepreneurs Can Overcome Naysayers


Categories:

There is one thing that invariably stands between an entrepreneur's idea and their ultimate success.

And that thing is naysayers.

Naysayers are everywhere.  All too ready to say that your idea won't work. That nobody will buy your products and services. That it'll never work in "the real world."

Consider this great passage from "Rework" written by entrepreneurs Jason Fried and David Heinemeier Hansson:

"That would never work in the real world." You hear it all the time when you tell people about a fresh idea.

This real world sounds like an awfully depressing place to live. It's a place where new ideas, unfamiliar approaches, and foreign concepts always lose. The only things that win are what people already know and do, even if those things are flawed and inefficient.

Scratch the surface and you'll find these "real world" inhabitants are filled with pessimism and despair. They expect fresh concepts to fail. They assume society isn't ready for or capable of change.

Even worse, they want to drag others down into their tomb. If you're hopeful and ambitious, they'll try to convince you your ideas are impossible. They'll say you're wasting your time.

Don't believe them. That world may be real for them, but it doesn't mean you have to live in it."


Naysayers predicted failure when the copy machine was invented in 1956. Yup, in 1956, John Dessauer developed the prototype for the first paper copy machine. He approached IBM with an offer to license it to them. After 18 months of study, IBM concluded there was no market for this product. The said there wasn't enough copy volume. And that the xerography process was too expensive per copy as compared to the AB Dick mimeograph process which was being used at the time to make copies. I guess we can say that this was a pretty expensive naysayer mistake by IBM!

And exactly 40 years later, when Google launched in 1996, even one of the world's top venture capitalists was a naysayer. David Cowan from Bessemer Venture Partners would not fund Google, thinking that there were already enough search engines in the market. Another incredibly costly naysayer mistake!

So what should you do if naysayers are telling you your ideas won't work? Here are 3 strategies.

1. Don't spend time with naysayers. If your friends are naysayers, then you have to make a choice - continue to hang out with them and give up your dream of becoming a successful entrepreneur, or get new friends.

2. Challenge naysayers. Explain to them the Xerox and Google stories above, and let them know that every new product or service has naysayers. And then get them to help you brainstorm new ideas. Ask them, "that being said [referring to the Xerox and Google stories], do you have any ideas that you think WOULD make this idea work?"

3. Surround yourself with optimistic entrepreneurs. It is often said that you are the average of the 5 people you spend the most time with. If that's true (which I believe it is), than shouldn't you be hanging around most with 5 successful entrepreneurs? Of course you should!!! Surround yourself with successful and optimistic entrepreneurs who can support you and your ideas. One easy way to find these entrepreneurs is to go to http://www.meetup.com, type in "entrepreneur" in the "Topic or interest" box and then enter your zip code and click "Search." You should find several local events where you can meet these entrepreneurs.

Have you encountered naysayers? Do you have any other strategies to deal with them? Let me know by adding your comments below.


Why Minimal Viable Products are So Important


Categories:

productsToo many entrepreneurs conceive products and services with too many "bells and whistles." The problem is that creating these products and services become too expansive because they are too complex. As a result, the entrepreneurs have too many opportunities to fail....They can fail to raise the increased capital that is needed to develop the bells and whistles. They can fail by taking too long to get to market. And they can fail because when they finally get to market, customers may not want what they have.

A better solution is to start by creating the minimum viable product (MVP). The MVP is the version of your product or service that allows you to gather the maximum amount of customer intelligence with the smallest amount of effort.

For example, the minimum viable product could simply be a survey given to prospective customers. Or it could be sketches of a new product that you show to customers. Or it could be just a very basic version of the product you'd eventually like to create.

By focusing on the MVP, you need less capital (or no capital), and more quickly get to market to get customer feedback. This feedback will give you the best information on what additional features customers desire in order to buy your product or service. And it better positions you to raise outside capital as needed (since you've lessened or eliminated the key risk factor that customers truly desire what you are creating).

So, what can you do to simplify your proposed products and services and/or create and get your MVP to market?


An Entrepreneur's Tryptophan


Categories:

We've all heaTurkeyrd it before - eating Turkey on Thanksgiving makes you tired.

And the ingredient within turkey that's responsible for this is called Tryptophan.

Is this true?

No.

Yes, tryptophan can make you sleepy. That is, if you ingest a ton of it on an empty stomach. But that's not what happens on Thanksgiving.

Rather, on Thanksgiving, people get tired from all the food they stuff into their bodies. Their bodies then need to work extra hard to digest all the food (particularly the carbohydrates and fats), and this in turn makes them tired.

And not only does all the extra food consumption make people tired, but I think the placebo effect comes into play too. Mainly that people THINK they are supposed to be tired after eating turkey.

So, people get tired both physically (body digesting all the food) and mentally (you think you should be tired) which is the double whammy that makes them really tired.

More importantly, I want you to think about the "tryptophans" you see every day in your quest to be a successful entrepreneur.

What half-truths are holding you back? What is making you physically and/or mentally tired so that you can't accomplish your goals?

Likewise, what excuses are you making? Are you saying you don't have enough time? That you don't have enough money? That you don't have enough expertise?

Well, everyone has these limitations, but the most successful entrepreneurs figure out how to overcome them.

Think about what's holding you back. And more importantly, how you are going to overcome them.

We still have plenty of time before the year ends. Write down one thing you want to accomplish before the year ends. And then get it done, and don't let anything get in your way.


7 Ways to Terrorize Your Competition


Categories:

One of my favorite movie lines, which I think about often, comes from the 1993 movie Rudy. In his pre-game inspirational talk in the film, Notre Dame football coach Dan Devine says, "No one, and I mean no one, comes into our house and pushes us around."

Yet, this happens all the time in our businesses.

We let competitors push us around. We let them steal our customers. We let them push our prices and margins down. And we let them dictate how we run our businesses.
 
So how do we stop this? How do we dictate how competitors need to act? And to go even further, how can we terrorize our competition so they don't even want to compete with us?

Here are 7 of my favorite ways:

1. Know More Than Them

By investing in the latest education, you will always have an edge on your competitors (assuming they don't also do this). Learning the best new techniques in sales, marketing, operations, finance, HR, etc. will allow you to outperform your competition on multiple fronts.

2. Create a Vision and Stick to It

Spend the time to create a solid vision of the company you want to create. For example, my vision at Growthink is to become the number one place where entrepreneurs go for assistance starting and growing their companies.

When you have a solid vision, you will not make knee-jerk reactions to your competitors' actions. Rather they will react to you. Also, while competitors' actions may cause you to shift your strategies, if you have a set vision, you will spend less time strategizing and more time executing.

3. Really Listen to Your Customers

One of my favorite quotes is from marketing expert Jay Abraham which goes, "Your customers are geniuses; they know exactly what they want."

By spending more time listening to the needs of your customers, you will create better products and services than your competitors.

4. Focus on Customer Retention

Focus more on retaining your customers than getting new ones. Studies have shown that it costs up to 7 times as much to acquire a new customer than it does to retain an existing customer. The profit is in retaining customers and selling them more things (that they need) over time.

Let your competitors fail to make profits, burn out, and go out of business by exclusively focusing on acquiring new customers.

5. Hire Right

As you grow your business, the less "doing" (e.g., building the product or providing the service to the customer) you will do and the more "managing" you will do. So your success will be put into the hands of those you hire. Spend the time to hire right and to train them well. And if you ever have the concern, "what happens if I train them and they leave?" then think the opposite, "What happens if you don't train them and they stay."

6. Create Systems

I heard the following acronym definition of "system" at a conference last week (yes, I am practicing what I preach and constantly invest in my own education).

The definition is:

Save
Your
Self
Time
Energy &
Money

Yes, systems may take time to develop. But once you've developed them, you will save time, energy and money on an ongoing basis.

7. Do Something Your Competition Would Have a Hard Time Duplicating

I know of one business that has an extremely rigorous client development process. Among other things, it consists of 6 months of pre-written emails sent to prospects twice per week, and weekly letters and packages sent to them in the mail. The process works extremely well, and not only would it take competitors 6 months to learn their systems, but creating a similar program would be a significant undertaking.

Other companies create a host of niche products that make it harder for a new competitor to enter their market. For example, if someone wanted to compete against Growthink with a capital raising product, it would be hard for them as we offer a product for raising angel capital, a product for raising venture capital, a product to get loans, a product to get grants, etc.

So, think about how you could create a company that your competitors can't replicate. In doing so, your competitors will be at a huge disadvantage. Also in doing so, you will become a great acquisition candidate for larger companies who realize it's easier to buy what you've developed than try to recreate it themselves.

Do you have any other ways you've used to "terrorize" your competitors (ethically speaking of course)? If so, please add them in the Comments section below.


A Fishy Business Plan


Categories:

I recently came across this poster:


Pretty funny (although not for the fish).

While it's amusing, there is an important lesson to it.

That lesson takes shape when you consider that starting and growing your business is your "journey of a thousand miles."

And when you haven't clearly planned out where you want to be at the end of the thousand miles, and precisely how you're going to get there, it could end very, very badly.

As Yogi Berra once said, "if you don't know where you're going, you might not get there."

This is very true for your business. In developing your business plan, you need to think through your vision for your company. Where would you like to see it in one year, three years, and five years?

What will your company look like at these times? How many employees will it have? What will you be doing on a day-to-day basis? What other companies will you be working with? And so on.

Once you have that clear vision, think through what it will take to get there. What specific milestones and accomplishments will you need to achieve? What are realistic dates for achieving them? What resources (money, people, etc.) will you need to achieve them?

The last thing you want is to go the thousand miles only to have your company fail (or be eaten by the bear in the poster).

So, spend the time now formulating your vision and your action plan for achieving it. And document it in your business plan. Sure, your business plan will change over time; it is not set in stone. But you must create it (and continually modify it) if you expect your journey to end with the success you desire.

Think about the successes you've achieved in your life already. For each of them, did you previously envision success? Did you have a formal or informal game plan that led to your success? Please answer these questions in the Comments section below. I look forward to reading them!

 


6 Things Entrepreneurs Should Do to Excel


Categories:

Tony Schwartz, the author of The Power of Full Engagement and The Way We're Working Isn't Working, among others, recently wrote a great blog post entitled Six Keys to Being Excellent at Anything.

In his post, he makes the key point that each of us has the ability to build any skill or capacity. He also cites the great Aristotle quote "We are what we repeatedly do."

Now, clearly this is not revolutionary thinking. I think we all know that if we practice something over and over again, that we can get considerably better at it.

The challenge however, is that practice is rarely enjoyable. Sure, the success that results from practicing and achieving your goals is highly satisfying. But, you first need to go through the pain of practice.

In his post, Schwartz sites six ways to improve the way your practice in order to get the results you want.

1. Pursue what you love. You must love what you do if you are going to excel at it, and be willing to put in the hard work and practice needed to succeed. Mark Twain said it best when he said, "The secret to success is making your vocation your vacation."

2. Do the hardest work first. Brian Tracy calls this "eating the frog." Because we try to avoid pain and gravitate towards pleasurable activities, we naturally procrastinate on tackling the most challenging but important tasks. By doing those things first, a) they get done, and b) we get more energy to complete other tasks thereafter.

3. Practice intensely, without interruption for short periods of no longer than 90 minutes and then take a break. We need to practice the areas we need to improve. And marathon practices are not the way to go; rather, practice for less time but frequently.

4. Seek expert feedback, in intermittent doses. Vince Lombardi said, "Practice does not make perfect. Only perfect practice makes perfect." Make sure you get expert feedback to make sure you are practicing the right way. Getting a business advisor is a great way to get ongoing expert feedback.

5. Take regular renewal breaks. As an entrepreneur, you cannot work 24/7. You will burn out eventually. Make sure you schedule some downtime. Physically you need it and mentally, the downtime will spur your creativity.

6. Ritualize practice. According to Schwartz, "the best way to insure you'll take on difficult tasks is to ritualize them - build specific, inviolable times at which you do them, so that over time you do them without having to squander energy thinking about them."

I do this with regards to going to the gym. I go every Monday, Wednesday and Friday after work. It's part of my routine. I don't even think about it; I just go. If I had the mindset that I would go to the gym if/when there was time, I would go much less frequently. By building this activity into my schedule it gets done nearly 100% of the time. Think about what skills you need to improve, and build practice time into your routine.

Follow these six tips to make sure you build the skills you need to become a successful entrepreneur. And realize that your skill-building will never end. Even the most successful entrepreneurs continue to invest in education and practice; since there are always areas in which you can improve. So establish the best methods for you and make this practice part of your daily life.


What To Do When You Screw Up


Categories:

On your path to becoming a successful entrepreneur, you will make a lot of mistakes. In fact, even after you become a successful entrepreneur, you will continue to make a lot of mistakes. Importantly, the difference between success and failure is often how you handle these missteps.

A recent article "How to Deal With Angry Customers" discusses how top restaurant owners deal with dissatisfied customers and provides some good lessons on what you should do when you screw up.

These lessons include:

1. Pamper Them: when a customer seems evenly remotely upset, go way out of your way to ensure their happiness. Just knowing that you really care about them and are looking out for them will go a long way to ensuring their satisfaction.

2. Make No Excuses: When was the last time you voiced a concern as a customer, got a reply that it was somebody else's fault (e.g., the waiter saying that the chef must have screwed up and overcooked the food), and were satisfied? Never. Making excuses and/or passing the buck never works. 

In fact, I love this quote by the executive chef at a New York's Maialino restaurant, "Excuses will only elevate the customer's sense of your restaurant's incompetency."

Importantly, most often the person at your organization receiving the complaint will not be the person who made the mistake. So make sure you build an organization with a culture that avoids passing the buck; a culture where everyone is empowered to make decisions to satisfy customers, and not make excuses.

3. Comp Judiciously: Simply put, if a customer is not happy, refund their money. I have taken this one to heart and as you may know, every single one of Growthink's products comes with a 100% money back guarantee. 

Now, this is actually a little extreme, and most businesses can't "comp" or refund customers so openly and still maintain profitability. But you must consider refunding your customers in order to maintain their satisfaction. In making this judgment, consider the customer's potential lifetime value and their potential ability to spread good or bad word of mouth (it's hard to tell these days who has this power, as any particular customer may have a Twitter or Facebook account with a huge following). Finally, consider how badly you screwed up (and if you screwed up really badly, you should give the refund).

4. Focus on the Solution, Not the Problem: Customers don't want to hear a lengthy discussion of the problem; they just want it solved. So in the short-term, focus exclusively on providing a solution to the upset customer. Later, after the immediate situation is resolved, figure out how the problem possibly could have been avoided in the first place.

5. The Customer Is Not Always Right: An important point is that the customer is not always right. Oftentimes this type of problem can be avoided by setting expectations before the product is delivered. For example, if the waiter said that the steak was prepared with a pink center while the customer was ordering, the customer wouldn't be upset when they received it (versus if they were expecting it to be cooked more and then saw that the center was pink).

Even if the customer is wrong, your organization must determine the best way to handle the situation in order to lessen the impact.

Finally, I've been shopping quite a bit on Amazon.com lately. And I generally look at the customer reviews. Consider the book "Think and Grow Rich" which is a classic great book. On Amazon.com, it has 489 customer reviews with an average rating of 4.5 which is pretty much unheard of. While 75% of buyers gave it a full 5 stars, 36 buyers (7%) gave it just 1 star. 

The point is that you are never going to satisfy all of your customers all of the time. So make sure you have a culture and systems to deal with dissatisfied customers. Since this can greatly impact your success!

 


Serious Pain: The Difference Between a Mediocre & Great Company


Categories:

 

When you're in serious pain, what do you take? Probably an aspirin or ibuprofen.

When you're trying to be healthy, what do you take? Probably a vitamin.

Now, which product do you think you crave more? The aspirin when you need it to alleviate an immediate and serious pain? Or a vitamin that may help ward off future illness?

Clearly, the aspirin is the winner.

Interestingly, according to a recent article in Fast Company entitled "Turning Vitamins Into Aspirin: Consumers and the Felt Need", making sure that your product or service is more like an aspirin than a vitamin is crucial to your success.

In fact, the article cites one little tweak that Netflix made to turn its service from a vitamin into an aspirin. And how this little tweak was the #1 cause for its success (without it, Netflix probably would have failed).

What was this tweak? Well, initially, Netflix operated like every other movie rental company. You received the movie from Netflix, and if you didn't return it on time, you had to pay late fees.

Sure, Netflix added some convenience by allowing customers to rent and return movies through their mailbox, and not have to go out of their way to their local video store. But, it turns out that the real customer pain was complete convenience, including not having to pay any late fees.

And when Netflix moved to its subscription model, which eliminated late fees, its sales started skyrocketing. In fact, it knew nearly immediately that it had a winner; in the first month after starting its subscription business, 80% of customers who signed up for a free Netflix trial became paying customers!

According to Fast Company, "Netflix as a DVD mailer was a vitamin. But Netflix as a late-fee vanquisher was an aspirin. It eliminated a pain."

Importantly, if you are seeking venture capital, know that most venture capitalists also think in these terms. They look at your product and service and assess whether it is an aspirin or a vitamin. And if it's a vitamin, chances are that they won't fund it.

But even if you're not seeking venture capital, you must figure out how to make your products and services aspirins. If your customers crave something, they will buy it. Consider cell phone carriers. Many cell phone carriers offer high prices and poor customer service. But since consumers now consider cell phones to be a necessity (or an aspirin) they continue to buy cell phones and service plans.

The key to creating a product or service that is an aspirin is your customers. And specifically figuring out what pain is your customer in with regards to your product or service. To gain this intelligence, speak to current and prospective customers. And watch them using your product to see how they interact with it (once great example here was Sony, which years ago gave its camcorders to a group of kids and observed them; it quickly noticed that the left-handed kids had a really hard time using them; as a result Sony invented the first camcorders with a swiveling holder that could be used by both lefties and righties).

The final note I'd like to make here is a point I make a lot. Which is this - rarely is your first idea your best idea. In Netflix's case, its subscription model was NOT its first idea. Rather, the founder, Reed Hastings, simply TOOK ACTION on his initial idea. And by taking action and starting his company, he was able to solicit customer feedback and try new ideas to arrive at the ultimate solution. 

If he had never taken action on his initial somewhat flawed idea (that people would rent movies via the mail simply because it was a little more convenient than renting from storefronts), it wouldn't have achieved success. And more recently, Netflix has been growing it's video on demand business. Once again, this wasn't even a consideration when Hastings started the business, but a natural outgrowth of a going concern started by an entrepreneur who took action.


Syndicate content

Most Popular
New Videos

"Business Plan
SHORT-CUT"

If you want to raise capital, then you need a professional business plan. This video shows you how to finish your business plan in 1 day.

CLICK HERE
to watch the video.

"The TRUTH About
Venture Capital"

Most entrepreneurs fail to raise venture capital because they make a really BIG mistake when approaching investors. And on the other hand, the entrepreneurs who get funding all have one thing in common. What makes the difference?

CLICK HERE
to watch the video.

"Brand NEW
Money Source?"

The Internet has created great opportunities for entrepreneurs. Most recently, a new online funding phenomenon allows you to quickly raise money to start your business.

CLICK HERE
to watch the video.

"Old-School Leadership
is DEAD"

"Barking orders" and other forms of intimidating followers to get things done just doesn't work any more. So how do you lead your company to success in the 21st century?

CLICK HERE
to watch the video.

Blog Authors

Jay Turo

Dave Lavinsky