• Innovative Strategies That Create More Profits

Author: harborcapitalgroupinc

Why A Core Story Is Critical To Your Success

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Why A Core Story Is Critical To Your Success

When you look at startups that have developed into very successful companies, you find that one of the things that make them so successful is that they have a core story, which is also their strategy. These core stories sound deceptively simple but are extremely powerful. You should be able to tell your company’s story in one sentence or even a tweet.

Here are a couple of examples:

Google’s core story is Google: provides access to the world’s information in one click.

Apple’s core story is: Apple empowers individuals with well designed, easy-to-use computers.

Your target audience will be able to “get it” immediately if they don’t get it; they are probably not in your target audience. Once prospects understand who you are, what you do, and the benefits of what you do, expanding on your story is easy. You can direct the conversation in many different directions, depending on who’s in the audience.

Now, you need to implement this core story/strategy into everything you do, from product design to hiring people, to operations, marketing, and after-sales service.

If you live your story, you will have the ability to grow and add to your product line over time. It will be easier because you will have loyal customers who trust you. Think about how Apple and others have expanded over the years with the same core story/strategy and maintain a loyal customer base.

Now, for the hard part. Defining and creating your core story/strategy is challenging to do and takes time, But, take the time. It might be the difference between success and failure.

Now, let’s look at defining the core story/strategy in a little more detail. There is additional material on the different aspects of creating and telling your story that you will want to read as well.

What is a core story/strategy

Simply stated, a core story is a powerful narrative about your company, which explains what you do (problem, solution, benefit, or results) plus why you do what you do.  In other words, your core story is your strategy, and it drives success.

A core story also creates an emotional impact, will hold the reader’s attention over time and is flexible enough to be able to explain your company in different ways to different audiences.

This core story is not a  story about you, its the company’s story about your customers. Carmine Gallo, the author of “Talk like TED,” states that a company story is the company strategy, and the CEO is the keeper of the story. You are creating a clear and compelling vision and story around the “why,”  which is a fundamental task of leadership.

Answering the why question is how you build trust and eventually loyalty,  Business books are full of advice on how to achieve specific objectives and goals, but they are light on the Why questions. Carmine Gallo, the author of TED Talks, says to ask the following questions, Why are we doing this? Why should I join the company? Why should I invest in this company? Why should you buy this product or service from this company? The answer to why is the company story.

A core story also motivates employees, defines company culture, and provides a vision to attract investors and even define future product development. However, your story must be authentic or the results could turn customers away.

According to Christan Riedal at Mind Caffeine, a core story is the basic narrative that structures why we believe something is meaningful. It is the story you live by. The core story of a company can be an experience, a specific moment in time, or a belief that shows the real purpose of the enterprise: why you are doing what you do.

It is also a story that is designed to create relationships and gently persuade an audience into suspending their cynicism to buy into an emotional point of view. We make decisions with emotions.

 If you take the time to refine your story, you refine your thinking and the company strategy, Companies that don’t have a clear, articulated core story don’t have a clear and well-thought-out strategy.

Don’t make the mistake of thinking that the story is just about marketing. It’s bigger than just marketing. The story is your strategy. If you make the story better, you make your strategy better.

 

The Elements Of Your Business Plan

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Your business plan is the primary document you will use to convince investors and others to work with you or invest in your startup. This business plan is not a one size fits all. You will want to tailor your material to what the audience wants. For example, if it is a venture capital company with recently raised funds, they will be looking for a longer-term view. If it is a venture capital company that has been investing for a while, they may be interested in more of shorter-term outlook and faster exit, 

Following is the typical format for a business plan. It is intended as a guide because different kinds of companies will have different requirements. 

1 Executive Summary

Describe (summary only) what your company is, what it does, and why it will be successful. Include your story, products and services, goals, company leadership and team, growth plans, financial information, and why and use of the funds you need.  

2 Company Description

This section goes into more detail about your company. What are the problems you are solving, how you solve them, and the benefits to the buyer from buying your product or service? You can go into detail here with a list of specific customers, markets, organizations you serve, and any partnerships you have established.

Explain the competitive advantages your product has over the competition and if that advantage is long term—for example, Intellectual property, Patents, Trademarks, .etc.

Describe the strengths of your company, including product, market, or industry expertise.

3 Market Analysis

What are your target industries and markets?  What is the outlook for size and growth in each target market?  Who are your competitors, and how do you compare to them. Do any of them have a significant advantage (market share, business model, IP, etc.) over the others in the market? What about pricing and market share?

Why is your solution to the problem better, faster, cheaper, etc.?  Are there any barriers to entry?

 4 Organization and Management

Start with your legal structure (incorporation or Limite Liability Company), which be essential depending on the type of investor you seek. Mostly, angel investors are with LLCs, but venture capital companies want companies that are incorporated.

Explain your company’s structure and who will head up each department. Use an organizational chart, if possible, to talk about how each department head is qualified to run that department.

5 Service or Product Group

Explain your line of products or services in some detail, including their features, functions, and benefits. Describe how each of these products benefits the customer. What is the product life cycle? How long will you be in Beta?

Do you have any plans for future patents, trademarks, or other product designs that will protect the uniqueness of your products or services?

6 Marketing and Sales

What is your sales story? Describe how you plan to get, keep, and expand sales to your target audience. What marketing methods will you use? Will you be using outside agencies or inhouse personnel for marketing and sales. What kind of experience do these marketing and salespeople have? 

 How long is the sales cycle? What kind of funnels will help develop prospects? Will you be using any distributors or wholesalers. If so, who are they, and what procedures and compensation are involved?

7 Funding Request

Describe your funding requirements in as much detail you can. If it is for one year, five years, or are you planning to fund by milestones? What type of funding are you looking for: debt, equity, loans, or some combination. Are you looking for a strategic partner or multiple investors?

How do you plan to use this funding: product development, sales, marketing, equipment, facilities, salaries, etc.

8 Financial Projections

Sone of the documents that will be requested includes the capitalization table, income statements, balance sheets, cash flow statements, capital expenditures, and budgets. Also, you will need to prepare a Pro Forma which uses assumptions and hypothetical events that occurred in the past and may occur in the future. This comprehensive financial overview gives outsiders a good look at your business from an economic viewpoint going into the next five years.

 9 Appendix 

Thie appendix includes documents that support your business plan like resumes, licenses, patents, legal documents, permits, any contract documents, etc.

 

A Quick And Effective Way To Tell Your Story

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Some people find it hard to develop an easy way to create a story or get it started. We usually use the three steps of problem, solution, and results or outcomes. Here is another way to get you started. Nick Morgan, author, and coach, tells people to use the story formats of famous and well-known stories as their framework, Then explain their story within that framework,

Before you start, don’t confuse a story with an anecdote, which is more of a description of something that happened. Nick says a story has three parts: a situation, a complication, and a resolution,

You need to tell a story if you want to grab someone’s attention and hold it until you reach the Call To Action (or, as Jerry Weissman would say, get them from point A to Point B).

You can do that with stories because stories work the way your mind works, Memory depends on attaching emotion to facts, Too many people try to use lists (3 of these, 6 of those) but people have a difficult time remembering those lists. Stories do a much better job.

But if you are having a hard time creating a story, use one of the traditional story frames that have proved themselves over the years,

Here are the five frames you can use.

Quest is the most fundamental frame. In this scenario, the hero goes off to achieve a definite goal but runs into a problem(s), generally finds a mentor, and then, throughout the story, reaches the target (for example, a new solution to a problem).

The Stranger in a Strange Land is a much different story; the hero finds himself in a strange place where he is unsure of what to do (e.g., maybe a research task without any defined criteria), the rules, or even the path forward. But he finds a mentor and a solution to something he didn’t know he was looking for initially.

Rags To Riches is the traditional story of starting out with nothing and, through hard work and some luck, ending up with fame and fortune. Maybe an investor pitch showing the investors how your startup started with nothing, is now at milestone B and is ready to scale.

Revenge is simply about a wrong done to the hero who, through no fault of his own, loses everything/. Then, he prepares a plan and sets out to get revenge for the wrong done to him. For example, this could be a public relations story about a company getting its reputation back after some false stories about it. This happened to one of our clients years ago.

Love stories are about both love found and love lost. For example, a new great partnership being formed or a partnership is dissolved,

The main point here is that you can use a story’s frame to help you create your own story without having to create a new structure. Also, these frames are familiar and understandable from the beginning, which makes your job and their ability to follow your story easier.

Do you have a situation in which one of these frames would make sense as a starting point to create your unique story?

 

How do you restart a stalled early-stage company

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 Often startups are launched before the founder(s) have determined the viability of their business idea, and eventually, for many reasons, the startup runs into trouble. Other times, there are Initial revenues, but they are irregular, don’t last, or they don’t grow as expected. How can you fix this?

In either case, you need to start diagnosing the problem by using the same analysis you would use to determine the viability of your business idea initially. If you haven’t launched yet, you need to assess the feasibility of your business idea before you launch. However, if you have begun, this same analysis would be the fastest way to diagnose the problem and see where you might be able to change, modify, or pivot to restart the pathway to success. 

First Look At The Market  

1 What is the market size or demand? If you don’t know, you can get some idea from Google Keyword Learning Tool (number of people searching for a keyword) https://ads.google.com/home/resources/using-google-ads-keyword-planner/

Also, Buzzsumo ( https://buzzsumo.com/ (number of people each day talking about your product).

2 Who are your competitors?  

The more you know, the fewer surprises. This analysis also gives you an enormous amount of information about products, pricing, various business models, etc 

3 Is this market trending, and in which direction?  

Which direction is market headed. Google Trends, https://trends.google.com/trends/?geo=US can help you learn if a trend is growing or not.

4 Who are your target customers?

Who is a buyer, influencer, disrupter, etc.? You can use websites like Quantcast https://www.quantcast.com/ and Alexa https://www.alexa.com to find out more about demographic information of the potential market.

You can also learn about people in your target audience from Twitter. Who follows your interest, demographics, age, sex, etc.? Hashtag your keywords.  

5 What does it cost to acquire customers?   

Acquisition costs are critical.  How will you acquire customers, and what will it cost to get them? One way is to find out how to use Landing Pages. 

Using social media, AdWords, etc., test for people searching for your product and your messaging, and drive them to a landing page. Make sure you have a strong Call For Action based on your value proposition aimed at getting the information you want, email information, or potential sales. From these click-through rates, you can begin to estimate conversion rates and costs. Plus, you can continue to correspond with them for more information.

 

6 Challenge your assumptions

You likely will get some information with which you will disagree. You don’t want to accept everything at face value (in discussions with prospects also), but you have to challenge your strong held biases, You are looking for something different. Something that will lead you to a better way to position or operate your company.   

It may take many trials and evaluations to get all the information you need, so keep at it until you are confident you have insights that will lead you forward.

Has your market assessment changed?   

This blog is the first of three blogs on this subject I plan to write in the future. The next one will deal with product viability.

You might also like 15 Benefits Of Storytelling In Businesses

Jim Zitek, Harblor Capital Group Inc

We empower entrepreneurs with information, insights, and the conviction they need to find, develop, and embed their stories throughout the development process to build successful companies.

Do You Know When To Scale?

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The goal of every founder is that moment when you have product-market fit

and you are ready to scale the business, But understanding when that moment has arrived is difficult.

Many startups jump the gun and begin to scale too quickly and end up just burning cash.

Net; getting the timing right is critical. If you have discovered a pathway to repeatable revenues,

you are beginning to get organic revenues (proving product-market fit) and are convinced you are ready to scale.

In general, you are correct about product-market fit,

But these early sales are most likely from early adopters.

You still have one or two obstacles to get over. According to Steve Blank, if you are introducing

a new product in a new market, you don’t have a market. You have to create the market.

So, as you run out of early adopters, about 16 percent of the market, you will have to educate

buyers who are unfamiliar with you, your product, and its benefits. That will take some time and money to accomplish.

Therefore, after that early revenue peak, your new revenues are likely to begin slowing down rather

than speeding up until you have the mainstream market educated.

So timing is critical because marketing costs from scaling up are rising, and revenues are not.

A lot of companies have been caught in this trap.

If you are introducing a new product into an existing market, your goal is

to take sales away from your competitors. The market is there.

Therefore, you should be able to keep revenues growing with your better product.

However, you still have to cross the chasm from early adopters to mainstream customers,

and they are more skeptical than the early adopters, and it takes time to convince them to switch over to your product.

Therefore, your Scaling should be more in sync with your revenue growth.  Unless, of course, money is no object.

For startups, timing is an essential element that you must always be conscious of.

 On the other hand, Scaling isn’t the same as increasing sales.

Scaling also means enhancing and improving your capacity and capability; scaling requires a well-thought-out plan

(written down) that includes all of your sales and marketing, operational systems,

the technology that will help with both revenue generation and operations,

financial requirements necessary to scale, and potential risks.

At the same time, Scaling also requires that you continue to focus on your customers.

It would be best if you thought like Amazon, which puts billions into infrastructure

and operations to take care of its customers. Is your goal to have your startup scale?

If yes, do you have the profit margins and market size to scale?

If not, you can still have a great business, but it will be hard to attract investors.

Would You Like To Know The Answer Ahead Of Time?

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Will your startup be viable? Will customers want to buy your new product? What is the optimal price point for your new product? These and many other questions can be answered in a matter of days for only a few hundred dollars, and you can even do the research yourself.  

Entrepreneurs usually have to make decisions with little data no history. Think of all the angst you could get rid of and replace it with some real data. Here is a Landing Page research program can give you the answers you need, And you can even do it without a website if you want,

MailChimp has the tools you need (email capture and database, analytics, and templets for the Landing pages) for about $15 per month. You write the copy. If you have a social media following, you can use them or you can buy pay-per-click ads from Google or others with a defined budget of $100 per month. And one month will certainly give you some information. 

The amazing thing about this program is that it is easy to do, provides lots of data for your analysis and decision making… and it is extremely inexpensive to implement. 

Also, you can continue testing one question after another to get the information you need or to optimize a program. Plus, with these low costs and quick turnarounds, you can make a lot of progress in a very short time. 

 Here is How It Works

1 Open a MailChimp account. Mailchimp is a marketing automation platform and an email marketing service. They have a free account but you will need the $9.99 per month account and the Landing Page module at $4.99 month.

2 Once you have your account, you have an option to use your URL (@company.com) or you can use a URL from MailChimp or you can buy a URL to use for your research.

3 You can then create landing pages which you will use to do your testing. Landing pages are a single web page that appears when someone clicks on your “advertisement” (from Google AdWords, Facebook. Twitter. Or from your content marketing program, or other social media). 

4 MailChimp hs several landing page templets you can use. These templates are easy to use. No coding. Just drag and drop. 

5 When someone comes to the Landing Page and sees your “offer” which could be anything from information, discounts or even get on a waiting list or to purchase something, Obviously, the more compelling the offer, the more sign-ups.

6 When prospects sign up, the information (name and email address) goes into your “audience file” at MailChimp. You will get data and analytics also which you can use for evaluation.

7 Also, you can set up an automatic response page welcoming everyone. You decide what to say on the response page,

And finally, in today’s market, you need to continuously improve your product or service so your company and its product stay viable over the long term.

There you have it. Get answers to specific questions in a matter of days and at a cost of only a few hundred dollars. 

What answers would you like to get in the next 30 days?

Want To Make Better Decisions? Here’s How To Start

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We all make some decisions. Some we celebrate and some we would like to redo. Estimates are that CEOs from established companies make the right decision 57% of the time. However, If you are the leader of a startup company, you will have to make more decisions, more quickly, and with uncertain information or little information at all.

Our culture says that leaders are strong, confident, have conviction and remain consistent. But what if they are wrong? It actually happens quite often. For example, Blockbuster, Blackberry, Xerox, and Sears to name a few. Ninty-five percent of startups are started and closed every year in the U.S. Most of us could do better. Here’s how.

The key to better decisions, according to Al Pittampali in his book “Persuadable,” is the willingness and the ability to change your mind in the face of new information. To do this, you have to reject absolute certainty and treat your beliefs as temporary. Plus, understand that no matter how confident you are in your view, you could be wrong,

This kind of thinking requires you to seek out counter-arguments against even your most long-standing trusted beliefs.

Therefore, exceptional decision-makers, are people who are first, “Persuadable” and have the mental flexibility to change their opinion. If they are persuadable, they need to evaluate critical information or arguments as objectively as possible and update their beliefs accordingly. This analysis starts with a good knowledge of critical thinking skills. We will have information on critical thinking skills at a later time.

Here is another way to think about it, Maybe rather than you trying to persuade someone else of your opinion, maybe you may need someone else to persuade you.

Do you consistently question yourself about your opinions and biases?  And let others know you are willing to listen to their arguments and views?

 At Harbor Capital Group, we help entrepreneurs turn ideas into businesses.

Creating And Sustaining A Competitive Advantage

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An advantage is rooted in asymmetries among rivals. It is leadership’s job to identify which asymmetries could offer an advantage. You want to exploit real advantages and be careful to avoid your weaknesses.  You also don’t want to get into a fight you can’t win.

A Sustainable Competitive Advantage

A sustainable competitive advantage like lower costs or higher quality is the goal of every business, but you also have to realize that your advantage may not be across the board. Your advantage may only be in certain products or services. Also, your customers are not monolithic. They differ in knowledge, biases, perceptions of quality, budgets, etc. Therefore, your advantages may be limited or temporary and not extend across the market.

To have a sustained advantage, your competitors can not be able to duplicate your advantage (eg, even lower prices or higher quality). To achieve that you need patents or processes, or unique skills and methods that you have obtained through experience or a strong brand name like Apple.

Interesting Advantages

Some advantages are more interesting than others. Richard Rumelt in his book “Good Strategy/Bad Strategy” explains that a competitive advantage that is “interesting” only when the advantage helps you increase value.

Competitive advantage and profitability are not equal. You can’t make money or get wealth by simply having, owning, buying, or selling a competitive advantage. The connection between competitive advantage and wealth is dynamic. Wealth increases when competitive advantage increases or when the demand for the resources underlying it increases.

How to increase value

Increasing value requires a strategy to do at least one of the following:

  1. Continue to strengthen your advantage (stay in beta mode forever)

  2. Keep expanding your advantage in both products and markets

  3. Create a higher demand for your advantaged products

  4. Make it difficult for competitors to copy or imitate your advantage

Deeping your competitive advantage

Start by defining advantage in terms of surplus — the gap between buyer value and cost. In other words, widen the gap by increasing value to buyers, reducing costs or both. This is difficult for two reasons:

One, Management must believe that improvement is a “natural” process and that it can not be accomplished by pressure or incentives alone. Improvements come from reexamining the details of how work is done, not just cost controls.

The same improvement rules apply to products except observing buyers is more difficult than examining one’s own systems. Companies that excel at product development and improvement carefully study the attitudes, decisions, and feelings of buyers. Then have empathy for buyers and anticipate problems before they occur.

Two. The second reason deepening your advantage is difficult is when your methods and processes themselves are weak. The improvements must be embedded or protected from rivals.

Broadening Your Advantage

Extending your competitive advantage into new products or markets means encountering new competitors. This requires looking at and reexamining the underlying skills and resources of your proprietary knowledge.

Extension based on customer beliefs (brand, reputation, etc,) may be diluted or damaged by careless extensions. (look at how Disney has protected — no cursing,  no sex, and no gratuitous violence- its brand while expanding) A brand’s value comes from guaranteeing certain characteristics of the product. But those characteristics are hard to define

Creating Higher Demand

Advantage increases when the number of buyers grows or when the quantity demanded by each buyer grows Technically it is the scarce resources that underlie the advantages that increase in value.

Note; increases in long-term profits only occur if you have already created a competitive advantage and you continue to use your proprietary processes and methods to expand demand. Engineering increased demand for the services of scarce resources is actually the most basic of business strategies. The increased value will come from less imitative competition.

If you continuously improve, more and stronger patents, strengthing your brand-name additional copyrights, etc your competition will have a hard time imitating your products. It’s like staying in “Beta” forever.

 

How To Leverage Your Competitive Advantage 

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Leadership needs to identify and understand the specific asymmetries between your offer and your competitors’ offer. For example, if you can produce your product at a lower cost then your competitor you have a competitive advantage. However, how you use that advantage can make a significant difference.

Much of the following information comes from UCLA Professor Richard Rumelt’s  discussion of the sources of power and how to overcome obstacles in his book on good strategy/ bad strategy,

The advantage is not generally across the board, It depends on which products and which applications, knowledge and tastes, etc. There is no such thing as having an advantage across the board to all customers,

For advantages to be sustained, competitors must not be able to duplicate them or the resources underlying the like patents, trademarks, talent, economies of scale, network effects, etc. Apple is a good example.

Competitive advantage and profitability are not equal. You can’t make money or get wealth by simply having, owning, buying, or selling a competitive advantage. The connection between competitive advantage and wealth depends on the interaction between the product and the market, Wealth increases when competitive advantage increases or when the demand for the resources underlying it increases.

Increasing value requires a strategy for progress on at least 1 of 4 different fronts,

  • Deepening the advantages
  • Broadening the extent of advantages
  • Creating a higher demand for advantaged products
  • Strengthing the isolating mechanisms that block easy replication and imitation by competitors

Therefore, a competitive advantage is interesting when one has insights into ways to increase its value,

Have you identified your competitive advantage overall and product by product, and how you are going to exploit their value?

Anticipation Is A Strategy Leverage

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Anticipation is simply Insights into anticipated future events or others’ behavior that you can turn into

an advantage (e.g., investing in a property that you think will increase in value).

In business, we think of anticipation in terms of potential changes in consumer demands

or actions competitors will likely take. (e.g., Netfilicks vs Blockbuster).

Most of the time, we worry about current competitors and potential new entrants into our market.

At the same time, competitors are trying to anticipate what you are going to do.

Most strategic anticipations draw on predictable “downstream” results such as;

1 Results of events that have already happened

2 Trends already at work

3 Predictable economic or social dynamics 

You have to be careful when you do “standard” forecasting because we tend to predict

three things and then take the middle one (like shoppers do in stores when they have three choices).

Also, we tend to extrapolate a continuous rising curve to future developments,

which may not be valid. e.g., n the 1970s, the price of oil kept rising rapidly to $100 a barrel,

and then oil was so valuable in the ground that producers started

to pump more oil, increasing supply, and prices began to tumble.)

 

 You don’t have to be a psychic to anticipate what might happen in the future.

Just look around, and pay attention to consumer habits and other trends. These trends will be in plain sight.

 

Next, you have to look at pivot points.

To achieve strategic leverage, you have to have insight into specific pivot points that you can

focus on and use resources to gain a significant advantage. These pivot points could be

products, technology, processes, operations, or business models.

You are looking for specific insights that have the potential to increase demand and leverage your advantage.

 

Finally, You Have To Concentrate

After you have identified your pivot point, you have to concentrate your talents and resources on exploiting it.

When you focus on fewer objectives, you can generate more significant payoffs.

Also, your company may have some constraints you have to deal with, and there may be

a threshold requirement (like the amount of advertising and sales required to break through the everyday noise).

It may also make sense to introduce a new product region by region,

concentrating its advertising where the product is new to spur adoption.

Also, it may be preferable to dominate a small market segment over having

an equal number of clients who represent only a sliver of a large market.

Questions

Is keeping track of and anticipating future changes and trends on your radar?

Is it on every team member’s radar?

Do you have touchpoints with your entire organization every so often to discuss strategic alternatives?