A Connection Worthwhile


Did you ever wonder how a website that does nothing but allow you to display your life to all your friends and family and is free to use, could be worth around $11 Billion??  Facebook is. This valuation comes from the power of connecting…not just people, but things. When connectivity is increased, value goes up exponentially.

This could best be understood with the explanation of the “fax effect”. The first fax machine that was made cost exorbitant amounts of money during research and development, and was worth relatively nothing. Not until you add another fax machine does their start to be value. Add another and another to the network and you start to create something of real value. Each arithmetic addition allows for the value to be increased by the square of the connections.

In the mid 90’s, I read the book Out of Control, and then in 1999 came the book New Rules for the New Economy both by Kevin Kelly. From Out of Control came the understanding that networks with high degrees of feedback create collective intelligence (more on this subject soon). This is what led me to the crazy idea of starting a mutual fund run by the shareholders called the iFund. We started in 2001, right at the beginning of that nasty down turn in the market and it never took off. An idea before its time, I believe, and we closed down when we sold off IPS Funds.

Kevin Kelly said in New Rules for the New Economy that “The dynamic of our society, and particularly our new economy, will increasingly obey the logic of networks. Understanding how networks work will be the key to understanding how the economy works”. This truth is backed by the looking at the success of Amazon, Ebay, Facebook, Google, and the many other beneficiaries of the network effect.

So going back to the beginning, the valuation of Facebook is based on the power of the network effect. Are you creating a network that is increasing the value of you, your business, and your community? You have a network with the people in your company and all of your suppliers, vendors, and clients. How are you connecting them to build value?




Opening Doors is Priority One!


 

Awhile back, I shared that we were working with a door-opening company called Kopp Consulting. Caryn Kopp and her team assist other companies in finding new clients by having a team of former senior management professionals use Kopp’s secret sauce to get you appointments and allow you open door3to do your thing.  What an informative experience!  Working with Kopp helped us design and focus our message to best tailor it to our core clients, and they helped us connect with even more clients and businesses.

How do they do it?  I am not privy to all their tricks of the trade, but I know they are paid to get appointments, and they do.  They know what to say to get past the screeners and to get appointments set.  They helped us gain access to numerous companies that we had not been involved with before.

I just came across an article shared on LinkedIn that suggests you should have people for cultivating leads, a separate team for closing the sales, and then another group to service them. Having professionals with strengths in different areas of the sales cycle is supported in this article.  To read it, click here.

The main objective of any business is to connect with the people who have the problem that their business’ product or service can solve.  This is the life blood of any company.  It keeps everyone employed, keeps bills paid, and with the right strategy and management, keeps profits flowing to expand and help even more people.

Yes your heard that right Occupy Wall-Streeters.  Most companies want to help others.  If they didn’t help their customers, people would not buy what they have to offer.  Living in a free county, and I hope it stays that way, no one is forced to spend their money with a company.  In fact, some companies have people so excited to spend their money there that they will stand in line for quite a while.  Think Apple, Starbucks, and that popular restaurant that you go to when another nearby sits empty.

The goal for any businesses is to keep their customers happy, so they not only keep coming back for more but also tell others.  When your company is newer, is not well known, or hasn’t gone viral, firms like Kopp can be just what is needed to get you in the door.