Infographic: The psychology of sales marketing and the human mind

NEIL DAVEY Editor

What role do emotions play in purchasing decisions? This infographic from Salesforce.com explores.

Fund Raising – Is Crowd Funding an option for me?

Almost $1.5 billion was raised by Crowd Funding Platforms (CFP) world-wide in 2011. Funds raised grew at 63% CAGR over the last 3 years. As of April 2012, 452 CFPs were operating globally and the projected figure for 2012 was $2.8 Billion![1]

Based on these numbers, crowd funding must be an option for you. It is yet another tool at your disposal. I have raised millions of dollars for my startup ventures and they were from; Friends and Family, Government Agencies, Angel Investors and Venture Capital firms. However, in the last few years we have seen a new and disruptive tool emerging in this space and that is Crowd Funding. I wish I had access to this!

There is no denying that crowd funding is a fundamental change in the way entrepreneurs may choose to fund their businesses. Just as the PCs brought computers to the masses, so too does crowd funding put innovation in the hands of the masses (the crowd).

“My innovation is not a world-changer, and yet fifty thousand people gave me millions of ‘yeses’ when I couldn’t get a venture capital firm to give me a single ‘no’. Innovation serves and benefits the masses, and deserves to be judged by them. Crowd funding may not be totally there yet, but I for one am excited to see what its future holds” – Eric Migicovsky, Founder & CEO of Pebble – Pebble  has raised over $8.5 million dollars on one of the most successful crowd funding projects to date.

Crowd funding is a term used for fund raising when an individual or business reaches out to the crowd to obtain money. There are many types of crowd funding such as:

• Donation funding  – straight donation with no rewards. e.g. www.justgiving.com
• Pledge or project funding – funding for reward, where the backer gets something in return for their commitment of funds, ranging from a thank you listing to free or discounted product. e.g. www.kickstarter.com, www.indiegogo.com
• Equity funding – where the backer gets a share of a company in some way. e.g.www.crowdcube.com
• Debt funding – better known as peer to peer and peer to business lending, where a loan is provided by multiple small lenders. e.g. www.linkedfinance.com,www.fundingcircle.com, www.thincats.com
• Specialist debt funding – asset based lending e.g. www.marketinvoice.com
• Social enterprise funding – funding for a social cause e.g. www.kiva.org

SmallBusiness.co.uk looks at five examples of businesses turning to alternative methods of finance for investment in their venture .[2]

• Funkey Junk
  – is a London-based supplier of professional recording equipment. In 2012 the company looked to break into China and Russia, which a loan of £80,000 from Funding Circle has made possible. Managing director Mark Thompson says, ‘It was quite nice to say to the bank, ‘No thank you, we don’t need you.”
• Kamm & Sons
  Alex Kammerling founded spirit manufacturer Kamm & Sons in 2011 and raised £180,000 through Crowdcube. He says, We didn’t realise quite how good a ‘shop window’ Crowdcube was and it has brought us a lot of press and external investor interest as well as funds.
• Red Advertising
  Job advertising network Red Advertising secured a loan of £150,000 over five years through peer-to-peer lender ThinCats.com. Managing director Richard Clarke says, ‘With Thincats, you can look for larger amounts of money. Funding Circle will only go to £100,000 and draws on an Experian business credit score.
• Artesano
  Knitting wool wholesaler Artesano raised £65,000 on Funding Circle. Managing director Tom Coomber says, ‘We’re with a high street bank and we do have a loan and overdraft in place with them. When they took us on they told us that we’re a good business to be lending to, but every year our business is growing and we need more cash for stock, so we had to look elsewhere.’
• Magnus Walker & Partners
  Johnny Walker, co-founder of specialist recruiter Magnus Walker & Partners, raised money on invoice auction platform MarketInvoice to remedy the problem of late-paying customers. He says, ‘The cost of credit is quite low. Also, some invoice financiers demand the entire debtor book to be financed but MarketInvoice is more flexible.’

To learn more about crowd funding, sign up to the seminar on “Crowd Funding – How can I avail of it?” in Dublin on Tue Feb 25th. The first 25 subscribers to this blog for regular updates can collect a free copy of the book signed by the author; Crowd Funding  – How to raise money and make money in the crowd by the keynote speaker, Modwenna Rees-Mogg at the event.

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[1] Crowdfunding Industry Report by Crowdsourcing.org; http://crowdfunding.nl/wp-content/uploads/2012/05/92834651-Massolution-abridged-Crowd-Funding-Industry-Report1.pdf

[2] http://www.smallbusiness.co.uk/slideshow/2188808/five-businesses-that-raised-money-using-crowdfunding.thtml

The Needs First Approach

Small businesses (fewer than 50 employees) account for 97% of the total number of enterprises in Europe and generate 50% of Europe’s employment.[1] These businesses want to grow but for a complex mix of reasons often fail to achieve their potential. Many are applying ‘Lean’ operational processes, and most are extremely cautious as a direct result of the global recession and its continuous ripples and market uncertainties. Yet they all desire some level of growth with profitability. These companies are stuck and unable to ‘cross the chasm’. (Crossing the Chasm is a term coined by Geoffrey Moore in his best selling book of the same name).

LeanDisruptor is a journey to help companies cross the chasm; Ensuring they find ways to disrupt, engage and convert main stream markets. LeanDisruptor looks at integrating design tools with a set of lean tools to help our clients build better products and reduce their risk of failure.

LeanDisruptor is a structured process with a disciplined approach to identify, verify and validate better business models, processes, services and products based on ‘outcomes’ that the customers desire. This method will change a company’s mind-set and delivers a lean approach on how to reduce the uncertainties and risks around creating better services and products that will leapfrog the current competitive options.

As part of the process we use a set of tools to identify met, undermet, overmet or unmet needs with the current solutions, and communicate these visually and instantly. Our aim is to identify if there is a problem worth solving and whether there is a repeatable scalable business opportunity that will enable the business to cross the chasm.

It is a very practical approach that includes exploring your business model and developing appropriate product strategies on how to GET, KEEP and GROW those customers.

The LeanDisruptor was developed off well proven ‘Design Thinking’ methodologies, alongside well established practical tools that have delivered repeatable ‘aha’ moments for us from experts including: Steve Blank, Alex Osterwelder, Tim Ogilvie, Clayton Christenson and Tim Brown. The process was additionally aligned with the CEN/TS 389’s ‘Innovation Management System’.

The diagram below outlines the six steps in this process and the purpose of each:

1. Investigation
2. Generating Solutions
3. Rapid Learning
4. Validation
5. Syntheses of Outputs
6. Outcomes

This creates a new framework and structure that motivates fresh thinking, focused on outcomes desired by customers in the major markets. It helps to deliver significantly better solutions and leap frog the competitive options.

This process will help to lead a mind-set change where the value of lean and design thinking becomes entrenched in the organisation.

http://leandisruptor.com/

Jesper Sørensen: How Do You Define A New Product Category?

A professor of organizational behavior explains why nailing market identity right out of the gate is critical to successfully launching an innovative product.
It's easy to convince the public to buy into an innovation when it's an improvement on a product or service they already know and love. But what happens when your idea is so new it defies categorization? True innovations run the risk of being ignored if they aren't easily understood. Jesper Sørensen explains why this happens, and shares some strategies that can help you manage this issue.

NOISE ANALYSIS AN ALTERNATIVE TO SWOT STRATEGIC PLANNING

Having a solid strategic plan will allow your company and team to flourish. You must have a format & process that is effective. NOISE analysis is that format.

Contact Mike to schedule a strategic planning meeting that will deliver results and engaged staff that are part-of the plan.

NOISE ANALYSIS

Working with companies developing strategic plans everyone seems to feel that the default method is a SWOT analysis strengths, weaknesses, opportunities, threats.  I’ve never been a fan and wondered if there was an alternative.

In the ‘High Performance Team Building’ class a smart friend Brian Pagkos shared an idea ‘SNOT Analysis’ strengths, needs, opportunities, threats.

While preparing for a focus group meeting it came to me NOISE

• Needs
• Opportunities
• Improvements
• Strengths
• Exceptions

A method that uses solution-focused language and is able to build upon the teams existing knowledge and goals.

OBJECTIVE

• When planning, determining what we want to have happen & understanding the road-blocks are necessary. Developing knowledge plus skills to navigate the plan allows us to choose focus points & what to eliminate. The NOISE analysis is a planning technique of looking at what is working and determining areas to improve. It gives us a format to explore opportunities that we may know about or be missing. When we understand the NOISE conditions, we can create a path towards the future that allows the company or team or project to flourish.

MATERIALS

• Flip Chart Paper
• Markers
• Lots of Post-it Notes

GROUP SIZE

• 5 to 20
• I’ve led this with larger teams you can break the group into teams of 6 or less. Each team of 6 works independently then get together to share (or the facilitator finds commonalities & categorizes them) OR lead a series of focus groups with smaller teams separately.

TIME FRAME

• At least 3 hours, I have led this over multiple days.

GUIDELINES

1. Before the meeting it may prove helpful to decide on a goal (what-by-when) to be achieved or to send some pre-work to the participants for then to think about. Examples of pre-work:

• Share these 8 Planning Questions and ask them to come prepared to share some responses.
• Have them work through the question of ‘What is your department accountable for? how can others help you in accomplishing your accountability?’ and come prepared for each department to share their responses.

2. On a piece of flip chart paper draw a circle in the middle. Create four quadrants radiating from the center circle. See below.

While drawing the NOISE analysis chart explain what would be useful information in each area. Feel free to change the bullets to better match your needs.

 

EXCEPTIONS

In the center circle write “Exceptions”

• Of the N, O & I Listed what is already happening, even just a little bit?

STRENGTHS

In the upper left quadrant write “Strengths”

• What is working well?
• What evidence do you have that these strengths exist?
• What does your team/dept excel at?
• What do others say is your team/ dept strengths?

*

NEEDS

In the upper right quadrant write “Needs”

• When we have ______ this will be a better place to work, or we would be more effective in completing our work.
• What does the team or department need to do its work better?
• What do you need or the individuals within the department need to do the work better?
• What do you need that you do not have to complete your work?

*

OPPORTUNITIES

In the lower left quadrant write “Opportunities”

• Other departments/ locations/ companies/ etc… are doing _________ we ought to consider what they are doing.
• An area of untapped talent or underutilized resources is __________
• What do we currently have that could be used differently?

*

IMPROVEMENTS

In the lower right quadrant write “Improvements”

1. What small concrete improvements can we as a team/ dept complete in the next 90 days?
2. Based on our strengths, needs, & opportunities what areas can we improve?
3. What is already working well that we can make work better?
4. A consistent area of improvement I hear people wish for is ____________
5. One area of improvement that would support our capacity/ growth is ____________

• Miracle Question: You leave here today & go to sleep. While you are sleeping a miracle happens and what you need in order to be more effective with your work happens, but you don’t know because you were asleep. You arrive tomorrow what is the 1st thing you would notice that makes you realize this has happened? How would you know?
• Scaling Question: Currently the department, organization, team (choose appropriate) operates at X, what does X + 2 look like?
• 1—2—3—4—5—6—7—8—9—10

3.  After illustrating + sharing the format with the group ask them to grab some flipchart papers, markers and post-it notes. Take about 45 minutes to 1 hour as a team to complete as many responses to the NOISE analysis as possible. PLEASE ask people to just share, this is a brainstorming-planning time we will evaluate the ideas later; for right now we are looking for quantity.

3a.  If you feel people will be be too judgmental.

• Ask them to work individually for about 10 minutes (more or less) filling out post-it notes by themselves on each of the areas. Start with Strengths then progress to Needs,Opportunities, Improvements, and end with Exceptions.
• After people have had a chance to think and work by themselves, ask them to share their responses (post-it notes) on the NOISE areas.

4.  With the team go through the NOISE areas. Starting with Strengths sort the ideas in affinity common groups, finding clusters of ideas that may fit together. Take the ideas that may be outliers and also recognize those ideas they may be breakthrough ideas.

At this stage the smaller teams of 6 or less are necessary this way any confusion over the ideas can be explained by the person that had the idea. Plus the team is small enough to discuss what belongs together and what may be outliers.

Repeat the process in each of the other NOISE areas in this order: Needs, Opportunities,Improvements, and end with Exceptions.

5.  Once you are done sorting & clustering into common groups, the team will look for broad categories for each small cluster. For example ‘Communication between sales and production’ or ‘More knowledge of how to use our internal knowledge management system’.  As the group reaches agreement on the broad categories re-write these in the proper NOISE areas.

6.  Now that everyone feels comfortable with the broad categories re-write them in each NOISE area and ask the team to dot vote on which they feel are most relevant based upon the purposes of our planning time.

7.  We have broad categories and a bunch of ideas on how to focus and improve them…Next steps would be to take the broad categories and ask the team to develop some short term measurement / milestones to show progress and achievement in the categories.

8.  Management (or the team leader) gathers all the broad categories and short team measurements / milestones for achievement and types them up in a ‘Plan Document’shares them with the team, ensures that they are all in agreement.

9.  Any feedback is taken into consideration and changes are made as needed. This Plan Document along with all the great ideas is now your improvement or strategic plan.

10. Routinely return back to the Plan Document and check for relevancy & success, plan to deal with + correct set-backs.

 

WHAT DO YOU THINK?

How can you see the NOISE analysis working for your next strategic planning meeting?

9 Blind Spots That Sabotage Businesses, and How to Beat Them

Entrepreneurs regularly confront a host of tough challenges. Just a sampling among them: landing their first sale, growing their customer base, hiring the right employees, managing cash flow and getting access to funding.

But the biggest challenge entrepreneurs may face is either a self-limiting or self-inflated view of their capabilities. Possessing fear, self-doubt, over-confidence, in-group thinking, misplaced commitment to a selected course of action or entrepreneurial myopia are just some ways an entrepreneur can sabotage his or her business.

Gallup research reveals nine potential blind spots that can hurt the venture.

1. Relentless focus on profitability

Making money is the primary objective of a business. But when profit orientation becomes an obsession, customer relationships can suffer. In a “profit first” culture, employees are under immense pressure to maximize revenue with little consideration for the customer experience.

Advice: Don’t lose sight of the human element in business. Keep customer expectations in mind when making decisions.

2. Overconfidence

Confidence grows businesses, but overconfidence can hurt it. Overconfidence leads entrepreneurs to underestimate the complexity of the situation, and overcommit resources in pursuit of an opportunity without assessing competition.

Advice: Avoid the speed trap. When the window of opportunity is narrow, pause and build what-if scenarios before taking action.

3. Unfocused creativity

Intellectual curiosity spurs growth, but too many ideas can be counter-productive. Lack of focus might cause an entrepreneur to launch multiple initiatives at the same time, losing sight of their core business and confusing their teams.

Advice: Select ideas that streamline your business and add value for your customers.

4. Need for control

Go-it-alone entrepreneurs can single-handedly get things done in a startup environment. But as the venture begins to grow, their need for control keeps them from focusing on activities that bring the highest value to a growing business.

Advice: Hire, train and transfer responsibilities to others.

5. Ineffective delegation

Delegation is key to growth. But setting up an effective delegation process is hard. Often, entrepreneurs hand off tasks to those with the least on their plate and make the mistake of micromanaging the person -- behaviors that lead to costly mistakes.

Advice: When delegating, identify the right person for the task, give clear instructions and be patient. Building capacity of your team members takes time and effort.

6. Misplaced commitment to a selected course of action

Entrepreneurs with high tenacity and perseverance may have the tendency to stick with a failing strategy, even when the results are consistently below expectations.

Advice: Set specific milestones to gauge progress on your project. Be prepared to change course if needed.

7. Entrepreneurial myopia

It’s not uncommon for entrepreneurs to fall in love with their idea or product. Their closeness to it and an intense desire to see it succeed blinds them to its flaws.

Advice: Try to be objective about what you offer to the market. Surround yourself with trusted advisers who can help you assess situation objectively.

8. Ineffective networks

Robust and diversified personal networks facilitate venture growth. But many entrepreneurs either fail to build an effective network or are unable to adapt the network to accommodate their venture’s evolving resource needs.

Advice: Figure out strategies to build your social quotient. Don’t forget to refresh and reshape your networks as your needs change.

9. Confirmation bias

Successful entrepreneurs have highly positive self-image, which leads them to favor information confirming their beliefs and opinions, while discounting information that contradicts their viewpoint. This bias affects their decision-making.

Advice: Interact with people with opposite viewpoints. Allow them to counter your ideas and concepts. This will help you perceive opportunities more realistically.

Your behaviors may or may not be easy to change, but they tell you where to begin. Recognize and understand your most basic qualities. Once you understand your strengths, biases and preferences, create a road map to systematically and consistently nurture your strengths and manage areas of weaknesses.

This nurturing of positive behaviors and figuring out strategies to manage areas that can negatively affect your business will yield extraordinary results. It will accelerate your personal development and positively influence the sustainability and growth of your venture.

Article contributed by--Sangeeta Bharadwaj Badal

Primary Researcher for Gallup's Entrepreneurship

Debunking The Five Big Myths About 'Big Pharma'

Contributor
John Lechleiter

If you are a regular reader of politically oriented commentaries on the pharmaceutical industry then you are familiar with, and perhaps even subscribe to, what I call “the Big Five”—myths about this industry that routinely poison debates, obscure genuine problems, and distort policy recommendations on health care. These myths have been all over the public arena again recently, and it’s time to confront them systematically.

Myth #1 Pharmaceutical companies exaggerate the costs of developing new medicines to justify high prices. In fact: The research and development (R&D) expenditures of this industry are staggering—and since they are matters of public record there is no way and no need to exaggerate them.

In the U.S., the member companies of the Pharmaceutical Research and Manufacturers of America (PhRMA) alone spent more than $51 billion on R&D in 2014. That total is based on the same audited financial statements that appear in our annual financial reports to shareholders. In my own company’s case our R&D spending last year was $4.7 billion. In fact, the pharmaceutical industry accounts for 21 percent of all R&D spending by all U.S. businesses—creating and sustaining hundreds of thousands of jobs while serving as a the engine of biomedical progress for the entire world. This level of investment is what is required today to bring forth new medicines.

Myth #2 Industry does not develop most new medicines; they come from government and university laboratories. In fact: Government and academic research contribute in essential ways to biomedical progress—but the complex and expensive process of turning insights on diseases and promising leads into approved treatments for patients occurs almost entirely in private industry.

A recent academic analysis helps to tease out the key distinctions. Looking at the patent applications of all of the drugs approved by the U.S. Food and Drug Administration (FDA) from 1988 to 2005, the study found that nearly half of the new drugs cited either a public-sector patent or a government publication in their patent applications—demonstrating that publically funded research often contributes indirectly to the discovery and development of new medicines. But fully 91 percent of the approved drugs themselves were patented in the private sector—demonstrating that they were substantially discovered and developed by private firms.

Myth #3 Prescription medicines are the main driver of health-care cost increases. In fact: Expenditures on prescription medicines have been a stable component of health-care spending over time and often contribute to overall cost savings rather than to increases.

Only about 10 cents of every U.S. health-care dollar is spent on retail prescription medicines—which is the same share that was spent on prescriptions in 1960. While the overall use of medicines to treat many diseases has increased dramatically in that same period of time—and average life expectancy at birth in the U.S. has increased by more than nine years—the share of spending accounted for by prescription medicines is the same as it was 55 years ago. That comparison makes pretty clear that medicines are deliveringvalue to the system rather than driving unsustainable cost increases.

A study published in the journal Health Affairs provides a good example of how this has worked. The researchers compared total medical expenditures for patients with four major diseases who faithfully used the medicines prescribed by their doctors versus those who did not. The “adherent” patients incurred somewhat higher prescription-drug costs, of course, but savings in their overall health-care expenses exceeded the extra drug costs by wide margins.

The fact that nearly nine out of 10 U.S. prescriptions are filled with generic medicines (which originated in the innovator sector, by the way) also has a lot to do with the overall stability of drug costs. The impact of generics has been especially positive for senior citizens and the programs that insure them. Looking at the top 10 prescription classes by volume used by Medicare Part D beneficiaries, the average daily cost of these therapies declined from $1.50 in 2006 to well under a dollar in 2013, and is headed much lower still.