Think about that!  If you had access to 4 billion customers, how would that impact your marketing, your strategy, your vision, your opportunities, and your profit potential?  Well it’s coming, and I see it happening right before my eyes.

Let me back up for a moment and give you some perspective.  As I write this, I am at my office in Pondicherry, India.  I started Efficience with my partners April and Rich back in 2004 and came to India shortly after to set up the office.  We started with one full time team member and one intern and then quickly added five more.  We have now grown to 40 bright, enthusiastic, hardworking men and women.   

When I started coming to India, none of the team members had cell phones.  Cell service existed here, but the phones were expensive, and most didn’t see the value in having one. This continued for a few years.  Now all our team members, from the lowest to the highest paid, have cell phones.  At this point, eight of them have smartphones, and I see the rest upgrading in a year or so.  I can see this new global customer base growing right before my eyes.

You may remember reading the Software Monster blog I wrote about how new software applications, Software as a Service (SaaS) tools, and apps are eating up the legacy business of a huge number of mainstream industries.  This was based on an article that Marc Andreessen, founder of Netscape, wrote in the Wall Street Journal.  Now, he has another article out that deals with the expansive opportunity that putting a handheld computer or communication tool connected to the entire world is offering by bringing customers to your doorstep.

In a CNet article called Marc Andreessen Predications for 2012, Marc discusses how smartphones are now in the hands of about 2 billion people in the developed world, and in three to five years they will be in the hands of 6 billion.  Can you imagine what to do with 4 BILLION New Customers?  I have been advocating the power of connectivity since the early ‘90s, and this adds an exponential growth factor to that, which compounds the potential.  If you read any futurist thinkers like Ray Kurzweil, it looks like we are much closer to that Singularity moment.  You can check out his book here.

Marc ends the article with how opportunities and growth wrap around smartphones saying, “Local merchants, like local restaurant owners, are going to have a smartphone app they can use to dial up customers on demand. Whether that’s from Groupon or Foursquare — any of these companies can do that. A lot of small business owners are going to start running their businesses from their smartphones.”

Your marketplace is not your backyard anymore; it’s not even your country.  We recently launched a requirements gathering tool called Sluice, and it gets 60% of its sign-ups from outside the US.  I can already envision all kinds of great opportunities with this mobile expansion, and we are moving our company in that direction for the potential it offers.  What are you doing to go after the soon-to-be total of 6 billion new customers?

When you look at the aspects of positioning yourself in business, think about where the world is going and where you should be to set yourself in its path.  Easier said than done, right?  How does one know where the world is headed?  The answer is to take in as much information as you can that provides the clues to where things are going.  Back in my investment days, I spent a lot of time reading research reports and other material that discussed future technologies and trends.

I used to follow an internet analyst named Mary Meeker of Morgan Stanley.  She was dubbed the Queen of the Net by Barrons in ’98, and has been there since Netscape did its IPO.  Mary now heads up the Global Technology Research Team, and her latest report has eye opening predictions on the growth of mobile technology.

Meeker’s team predicts that, within the next 5 years, “more users will connect to the internet over mobile devices than desktop PCs” and that this trend will result in new opportunities for a lot of companies.  Her analysis predicts a ramp up with Apple devices at a rate of 11 times faster than AOL and Netscape experienced in the early 90’s.  On the same path, 20% of the world’s mobile phones are on 3G technology.  I remember just a few short years ago when almost none of our team in India had cell phones, but now every one of them does, most with iPhones.

The implications of this in the ecommerce world are huge.  Her report details features like location-based services, time-based offers, mobile coupons, push notifications and more, all creating new opportunities for existing and new businesses.  Even virtual goods sales have shown huge grown in Chinese companies.

According to Meeker, more users are willing to pay for content on mobile devices than on desktops for key reasons such as:

1)      Easy to Use/Secure payment systems

2)      Small price tags with most being under $5

3)      Established storefronts like iTunes that allow easy discovery and purchase

4)      Personalization, which is more important on a mobile device than on desktops

So now that we’re all thinking about where this is going and realizing that over the next few years more of us will be using internet on our phones rather than our computers, what can that mean for you and your business?   What is the opportunity for you to be more accessible to your customers?  Can they connect with you easier or faster?   Are there coupons or location based services you could provide to them?  Is there a mobile product or service that you could provide that would benefit consumers?

This market is already big, but the room to grow and benefit is still vast.  On the flip side, if we do nothing with this mobile opportunity, will we lose a market share of our business?  Don’t be left behind.  

You might be thinking “who is on first and what is on second?” if you’ve had any exposure to the old Abbott and Costello joke.  What I’m actually referring to though is the first thing that should be done in business; finding the WHO that is your client and defining them as descriptively as possible.  To get to second base you do want to find your “What” which is defining your unique offering.

Back in 2007 at the Fortune Growth Summit in Las Vegas, I had the pleasure of meeting and getting to know Robert Bloom (engaging in conversation around Italian food and his love of the country).  Bob is the former CEO of advertising giant Publicis Worldwide. He also wrote a very influential book in the business world titled The Inside Advantage.  Why so influential?  Because it gives you a process to discover WHO your client really is and HOW you are going to sell them WHAT it is that you have to offer them.

This blog I want to focus on the WHO.  A few months after hearing Bob speak and reading his book, I called him up.  I shared that we were going to go through the process of finding our Inside Advantage at our upcoming annual retreat, and Bob so graciously gave us some pointers and even engaged in a call with my team at our retreat to help us through a few stucks.

Your WHO, as defined by Bob, is the core customer most likely to buy your product or service in the quantity required for optimal profit.  Finding the right WHO is important because, as Bob says, “The easiest and most profitable growth will be achieved by adding additional customers very much like your current most valuable customer.”

So how do you find your WHO?  It is a process, and going through it will generate a lot of awareness about your business.  How we did it was by gathering our entire team and brainstorming what our most valuable clients look and feel like.  This is not a demographic exercise…you have to be more specific and know by sitting across the table from that person how they would think and feel about what you have to offer.  With everyone contributing their (brilliant) ideas, we started with a few words and ended with a plethora of words that describe our potential client.

Afterwards we threw out the duplicates and honed in on the top 10 to 15 words that were the truest representation of our core client.  There was a lot of intense debate, but finally we narrowed it down.

Our core customer is:  A technical business leader who has an intense need for a reliable solution (software) delivery partner.

What is your core customer? If you don’t know, Bob’s book is a great place to start helping you find out. 

Recently I wrote two blogs on the Inside Advantage, discussing the Who and What that make up your offerings.  Today I’m going to finish up this topic and talk about the How and the Own It’s of this great strategy.

The HOW part is your persuasive strategy that gets your Who (your core customer) to buy your What (your uncommon offering).  This approach doesn’t void out competition, but it does allow you to stay ahead of them and to stand out from them, a process that is both dynamic and constant.

Bob (author of Inside Advantage) states that there are five hallmarks to a good persuasive strategy:

1. It must be action-oriented, not just a vague promise or sincere commitment.
2. It must define the specific action right up front; the first word must always be an action verb.
3. It must be strategic, not tactical – it must state “what” your product will actually do, not “how” the product will do it.
4. It must be honest and achievable, not imagined and unaffordable.
5. It must be tightly integrated with your definition of the core customer and the reality of your uncommon offering.

A few good examples (the book has several more) of How statements are:

Triaminic

Help Mom select the symptom-specific Triaminic formula that has only the medicine her child needs to get well as quickly as possible.

Juicy Juice

Demonstrate that Juicy Juice is the healthy juice for kids by comparing its 100 percent pure juice-absolutely no added ingredients formulation with the ordinary competitive juice beverage drinks.

After you’ve discovered your Who, What and How, the last part is to define your Own It’s, which are the imaginative acts that celebrate and support your advantage.  The Who, What, and How are your own private awareness that can only be made known to your clients through “imaginative acts” that celebrate your What (your uncommon offering).

Demonstrating imaginative acts might look like this:

A newspaper wants to earn the community’s trust by making it a better place to live, so they offer reader coffee talks with reporters, free article lamination service, advertiser appreciation lunches, recipe contest, new-neighbor showcase or an amateur art contest.

The book provides Own It examples for an upscale tanning salon, a sports and entertainment marketing agency, a prominent wealth management firm and a renowned symphony orchestra just to name a few.  Implementing Own It’s for your company is a great driver to support the message you want to convey to clients and to prove to them that you mean it!

Often times in business we say and write about who we are and what we do, but it’s in the Own It process that we put actions with those words and prove to our clients how we’re different.

Having come from the investment world, I like to stay informed and keep my eye on what people are seeing and thinking about prospects for growth and where the world is going.  For that reason, I always find reading Berkshire Hathaway’s annual report written by Warren Buffett very informative, down to earth, and a balancer to all the hype and exaggeration about how bad things look out there.  The world is not ending, even though it is going to be a hard road for many.

We have been overwhelmed by the reports and video’s coming from Japan.  So many people are carrying heavy hearts for what the Japanese people are experiencing, and will continue to experience as they rebuild their lives and their homes.  We all wish major blessings and much inner strength to all of Japan, and to our EO friends over there, to help them get through these tough times.

A few weeks back, before this tragedy, Mr. Buffet made some interesting comments in his report, which happen to be very appropriate for hard times, be it the state of the US Economy, a natural disaster or personal crises.  He started with commenting on how over the span of his life living standards have increased over 6 times.  He followed with “The prophets of doom have overlooked the all-important factor that is certain: Human potential is far from exhausted, and the American system for unleashing that potential – a system that has worked wonders for over two centuries despite frequent interruptions for recessions and even a Civil War – remains alive and effective.”

I agree with this wholeheartedly and know that this applies not just to America, but everyone participating in the world capitalist economy.  Japan dealt with the mass destruction of WWII and nuclear attacks, to become the 2^nd largest economy in the world (now 3^rd).  The Japanese people have shown a very high consciousness deal with this crisis, and with all the human potential they possessed getting it done before, they can do it again. 

Other observations in his report had to do with the future prospects of companies to create intrinsic value.  He focuses on 2 areas, which he calls the “what-will-they-do-with-the-money” factor and “what-do-we-have-now” calculation.  In order for CEO’s to do a good job, they must look at these areas and allocate effectively.  Buffett used the example of going back to 1960 and seeing how Sears and Roebuck or Montgomery Ward’s CEO’s allocated capital compared to Sam Walton.

He also talked about how culture counts, and that CEO’s and directors should act like owners.  Under the Berkshire system they receive “token compensation: no options, no restricted stock and, for that matter, virtually no cash.”  There’s no liability insurance in place either, so if they mess up, they lose their own money as well.

In regards to leverage and debt, Buffett is not a fan of what he calls “financial adventurism”.  A lot of people have gotten rich and magnified their gains through the use of borrowed money, but many have also become very poor in the process.  Having a large amount of debt in your business can be destructive if the timing of maturity or refinancing comes during a worldwide credit shortage.  Buffett is a fan of having lots of cash on hand, this way you always have money to deal with a crisis or take advantage of an opportunity. He keeps at least 10 Billion and usually up to 20 Billion on hand.  Cash is King! 

We’ve made it to first and discovered our “who” in the last blog.  Now it’s time to talk about our “what” that is sitting on second.  To further the discovery into your Inside Advantage, we need to have a cleare understanding of the “what” that you offer to your clients.

What you learn is the difference between what business you think you’re in, versus the business you are actually in.  Many businesses think that the transaction that takes place between them and their client is their business.  For example, if I remove junk, I’m in the junk business.  If I develop software I’m in the software business.   If I sell coffee, I’m in the coffee business. You get the idea.  This perspective won’t get you far according to Bob (Inside Advantage), because it lacks the most important aspect, which is the customer’s emotional connection to your business.

Let’s try turning this around and looking at it from another perspective.  If I remove junk, I am also in the business of giving you back your space.  If I sell coffee, then I am in the business of creating an escape from everyday life, like Starbucks.  I develop software, but we are in the business of helping you gain execution around your goals, streamlining your processes, making your work like more efficient so that you have more time for your personal life.  Make sense?  See how this relates to people’s emotions, and why people flock to FourBucks for coffee?

It’s all about the emotion that is generated from the interaction with what you offer.  Bob worked with L’Oreal, which you would assume are in the business of cosmetics and hair care.  That’s not the case…L’Oreal markets and conveys in everything they do that they’re in the business of helping women look and feel beautiful.

Bob refers to this as an “uncommon offering” because it focuses on the customers’ benefits and emotional experience that are provided by your product or service.

If you’re thinking that your business is just another copy of competitors, don’t lose hope.  Bob says that in every business there is a hidden uncommon offering, waiting to be revealed, and it is just a matter of looking in the right place to find it.  This isn’t a marketing strategy…this must be an honest and meaningful uncommon offering.

We went about discovering our uncommon offering just like we did with our WHO.  It wasn’t an easy process, but was definitely very rewarding.  If you feel you are a commodity, Bob has lots of examples that prove that you can pull out your uncommon offering in any so called commodity.

Our What is: More than a software company, a trusted technology partner committed to ensuring the best customer experience. 

Have you discovered your WHAT?

Note:  I have recently transferred the publication of my blog from Google to HubSpot. You may have noticed a few small changes in appearance, and possibly received a few additional emails that slipped out during migration.  I’m very sorry for the disruption, we’re trying to make this as smooth and painless as possible!

Doesn’t it seem like some of these people making it big in the business world just have this epiphany one day about a great idea, then they just go and make it happen…ending up with millions and sometimes billions later on?

This was not my experience.  What I’ve seen is that, one day you start working on this small idea, then somewhere along the way you stumble upon a bigger idea, which usually isn’t anywhere close to your original idea.  If you have gone down the path of an entrepreneur, is this how it happened for you?

One of my biggest successes was starting a mutual fund, but it didn’t just come up out of the blue.  First I took an internship in college to learn about and sell insurance.  I built on that by starting a financial planning company with my late partner Robert Loest.  From there we tried an investment newsletter, but that only generated a few subscriptions.  Robert thought that money management was the future, so we went in that direction.

After a few years of managing individual client money that was slow and hard to grow, I had the idea of starting a No-Load mutual fund.  This newly discovered path came from the many paths before and the knowledge accumulated along the way.  It helped us take a firm that managed 20 million to managing a billion in 5 years. 

What I have experienced is that we get started on something and it leads us down a path towards success, but it’s not a straight path.  It’s only after we fail with an idea or two (maybe more) and keep trying that we discover new paths along the way.  Success is a serious of steps and discoveries that take lots of focus and drive to get past the down times and potential lack of interest in the marketplace for your ideas.

A former venture capitalist, Peter Sims, did some very interesting research that backs up my thinking on this topic.  Did you know that initially Google was a project to improve library searches, and was not founded on the idea of being a major search advertising powerhouse that it is today?  The major picture animation company Pixar first started as a hardware company.  Twitter was also not an original idea. Sims goes into more detail in his new book Little Bets: How Breakthrough Ideas Emerge from Small Discoveries.

At my current company, Efficience, we focus on building multiple, easy to use web applications an put them in the market place to see what works.  We might change and evolve an existing application several times before we get it right, or we might start down the path of creating an application and discover something completely different in the process, winding up on a new path instead.

How many times have you heard “I spend so much time in meetings, I don’t have time to do all the things I say I’m going to do in those meetings”?  It’s a constant battle I face, trying to improve our meetings so that they are as productive as possible in the least amount of time, and ultimately beneficial to our business.  After all, business is about bringing a group of people together to accomplish something, together.  So you could say that these gatherings are one of the most crucial parts of business.  It’s difficult to align people without that infamous word “meeting”.

Imagine a US football team in a huddle.  Before each play, the offense and defense take a few seconds to analyze where they are, what down it is, what they think the opposing team will do and their own next play options.  Next the coach or quarterback will call out a play that takes everything into consideration.  In the same way, when people are brought into a meeting they discuss what they are trying to achieve, what is in the way of achieving that and any progress they have made.

We work diligently to make our meetings productive so that they keep us moving forward, but I find that we still manage to drift a little along the way.  Last week after our usual Monday morning meeting with our Team leads in India via video conference, I kept the team together and asked one question.  What is standing in the way of us becoming a better company?  I set the timer and everyone had 3 minutes to write down their thoughts.  

At the end of 3 minutes, one at a time we went around the room, each team member and team lead providing one idea.  As we gathered ideas I started a list of them all, and then went back around and each person ranked their top 3.  For their first choice, I put 3 marks, second I put 2 marks, and third I put 1 mark.  At the end, the ideas with the most points are the most pressing issues, and therefore are the ones that we will begin discussing.  As a group we brainstorm possible solutions to the barriers, then finalize what our next step is towards making our company better in that area.

In my experience, meetings provide the best opportunity for true collective intelligence…where ideas feed other ideas, and new ideas grow.  Taking the time to talk about pains, stucks, competition or even opportunities, you are supporting the work of your team and making meetings productive.  Research shows that one of the biggest motivators for employees is progress.  When you have a productive meeting, your team feels that accomplishment and thereby leaves the meeting more motivated.

In last week’s blog I discussed what it means to create value, and mentioned that simply asking your customers what they want is a viable way to determine value opportunities. When your customers don’t know what they want, an alternative is to use the Blue Ocean Strategy (BOS).

The cornerstone of the BOS is what they call Value Innovation. It stems from the idea that by combining value and innovation you can make the competition virtually irrelevant. This is done by simultaneously driving cost down and buyer value up. Take a look at the chart. The point where they meet in the middle is spot where value innovation is created.

It may not make much sense yet, but stay with me. Start with increasing buyer value by introducing offers not seen before in the industry. At the same time, identify factors that the industry currently competes on and see how you can either reduce or eliminate costs associated with those factors. To track this, use what BOS calls a Strategy Canvas. Along the X-axis­­­­­ you plot the factors that the industry competes on, and along the Y-axis you track the value received from those competing factors.  See Southwest’s Strategy Canvas below.

Once you know the factors that the industry “currently” competes on, you dive into what BOS calls the Four Actions Framework, which consists of these four questions:

1) Which of the factors that the industry takes for granted should be eliminated?

2) Which factors should be reduced well below the industry standard?

3) Which factors should be raised well above the industry’s standard?

4) Which factors should be created that the industry has never offered?

The first two questions assist in reducing cost, and the last two are meant to help generate value.

By doing this exercise and taking it seriously, you have the potential to break the mold and create something new and special. Think about historical breakaways, like Ford’s Model-T car for the masses back in 1908, CNN’s 24/7 news in 1980, Starbucks coffee – a higher price but higher quality or Cirques du Soleil’s Broadway performance/circus, using people instead of animals.

The book offers several examples and explanations, so if you’re serious about breaking the mold, it’s a great way to open your mind to the endless possibilities you can find in the vast blue ocean.

I have had my eyes on a blue ocean opportunity for a long time. As a software company, every new product we create that fills a void has BOS potential. Soon we’ll be launching a tool for requirements gathering called SluiceIt.com, as well as a company meeting software tool that helps to create an environment of execution around goals.

Watching the news these days doesn’t leave one with much hope for the future, when all we’re hearing is about inflation, unemployment and national debt.  Reports are spreading of an ongoing recession and even a possible depression before things get better.  So what is an entrepreneur to do?  Constantly trying to keep your head above water can get discouraging when you have nothing solid to look towards.  As much as I’d like to bury my head in the sand sometimes, I know that’s not a viable option.  Instead, I practice the Stockdale Paradox, which is to retain faith, regardless of the difficulties, AND confront the brutal facts, whatever they may be.

The fact is, things are not good out there, but this does not mean that there is no money or opportunity.

Let’s first consider how we view the world around us.  The word recession is defined as two consecutive, negative quarters of economic activity.  Does that mean that everyone stops spending money and the economy comes to a complete halt?  Not at all!  Now consider this:  the Gross Domestic Product (GDP) of the US was at $14.54 trillion in the 3^rd quarter of 2008, on an annualized basis, just before the financial meltdown.  That number never fell below $14.24 trillion, even at its lowest point in the first quarter of 2009.  So what does this mean to you?  There was still over $14 trillion being spent in the economy every year; money that you could be hustling for a share of.

Even though the overall drop was not significant, some industry sectors took a tragic hit, as much as 50%, while others grew by 20% or 30%.  In times like this, the Clipper Ship Strategy can be useful by positioning yourself to where your money is being spent.  This isn’t necessarily an easy thing to do, especially with big industrial and manufacturing centers.  It’s a little more feasible to move towards the money if you’re in the service sector, and much easier for information based businesses.  The point here is just to keep moving.

Something else to try and practice, and not just when times aretough, but all the time, is to focus on what you do best and hire others to do what they do best.  The simplest way to put it is to play to your strengths.  For example, we have engaged Kopp Consulting to go out and do our cultivating of new business for us, since our strength lies in the relationships and solutions, not sales.  Obtaining new business is a venture that requires focus and attention.  In our experience, when the relationship team is trying to do the job of the cultivation team, we lose focus and don’t see optimal results.

Kopp learns about your business and has their own secret sauceto finding the right clientele and getting you in front of them.  In the months ahead I will share more of our experience with what Kopp is doing for us. 

My last thought on this topic is this question: how hard do we make it for our customers to find us?  Go ask everyone in your office if they have used the phone book in the last week, and then ask them the same question about Google.  I have seen it done and the difference is eye opening.    Content and key words are key to getting found in search engines.  Have you Googled yourself lately?

So with a recession in the air, are you keeping the faith, confronting the brutal facts, focusing on what you do best, and can your customers find you?