Written by Pete Kennedy on Wednesday, April 9, 2008
1. 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.
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?
Written by Dave Lavinsky on Wednesday, April 9, 2008
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:
Written by Pete Kennedy on Wednesday, April 2, 2008
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?
Written by Growthink on Tuesday, March 25, 2008
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.
- How to Find, Evaluate, and Profit from Early Stage Investment Opportunities
Written by Tom Zeleznock on Wednesday, March 19, 2008
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:
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.
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.
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.
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.
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.
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.
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.
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.
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?
Ready to Create Your Empire?
The first step is to create your business plan.
Written by Dave Lavinsky on Tuesday, March 18, 2008
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:
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.
Written by Pete Kennedy on Sunday, March 16, 2008
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
Written by Growthink on Thursday, March 13, 2008
It's always said that access to funds is the life blood of any company. Going out and securing outside financing to help grow a business is an important step in the life of an emerging organization. Keep in mind, the process of commercial borrowing is best done in preparation for needing the capital, rather than when the request is made in a dire situation. Here are some necessary tips to keep in mind when preparing to seek a loan.
Written by Tom Zeleznock on Wednesday, March 12, 2008
There is no simple formula for creating a successful business. Luckily, there is an easy way to improve your chances.
Ready to Create Your Empire?
The first step is to create your business plan.
Written by Jay Turo on Wednesday, March 12, 2008
We speak every week to many entrepreneurs and managers of emerging and middle market businesses seeking our assistance in strategizing, drafting, and packaging business plans.
Sometimes, the client has a very clear idea of their business vision, their key value propositions to their core target customers, an understanding of the competitive landscape in which they exist, and their mission critical milestones.
More often, however, folks come to us with a great idea, a contagious enthusiasm, and a gut, intuitive "feel" that there is a real opportunity in the marketplace for their business vision.
At Growthink we naturally share this enthusiasm, passion and excitement, and are fundamentally eager to dive right into the business plan drafting and the business-building process. We pride ourselves on being entrepreneurially allied with our clients and embodying a proactive, solutions-focused approach to the challenges and heartaches inherent to the entrepreneurial process.
But almost invariably, in short order what is revealed is what Bette Midler sang about in “From a Distance” – that “the world looks blue and green, and the snow-capped mountains white…and the eagle takes to flight” – with the unsaid being that upon closer inspection there is very little that is without blemish nor complexity.
Nowhere is this truer than in a business plan. There are no perfect ideas – no “slam dunk” business models driven by such creative insight and breakthrough that the business plan development process is simply a matter of documenting it on paper for posterity's sake.
Instead, the sometimes convoluted, sometimes messy, and always challenging process of fleshing out the various multi-faceted aspects of a business – its marketplace, its competitive realities, its profit model, and its “Monday morning” action plans – is where the new business idea will face its first real viability test. It is not an undertaking for the faint of heart nor for the lazy as it is hard, time and energy-intensive work. Those, however, that get through it can take solace in that they have dramatically increased their business’ likelihood of eventual success - and correspondingly - its value.
For Bette Midler, click here
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