Monday, June 23, 2014

Fail Fast or Learn Fast?

This work by Marcelo Bernardes (@marcelobern) was originally posted on LinkedIn.

As I read the article from Jim Belosic (CEO of ShortStack), it got me thinking how many times people get paralyzed by past failures. While entrepreneurs are forewarned of the danger (and sometimes likelihood) of failure, fear of failure is a challenge for all people and we all should reflect on which risks to take, how to mitigate them, and seek to learn from the outcome. It is about reframing the fear of failure into risk taking as a learning opportunity.

Prepare yourself to learn from your journey

I agree with Rob Shelton (global innovation chief of PwC), when a more scientific approach is used, learning takes center stage.

It's about having a hypothesis, and testing it, if the results don't match your hypothesis, you've got data. If the results do match your hypothesis, then you have a discovery. - Rob Shelton

Entrepreneurs, intrapreneurs, and business leaders might use business plans to capture their hypothesis, others might use project plans. No matter which tools your situation favors, be sure to document your hypothesis.

Every time actual results invalidate your hypothesis, analyze the data to update your hypothesis. Remember, being right is not the goal, learning from this reflection process is. And applying the learning to update your hypothesis will ensure a continued learning experience.

As practical, identify “early warnings” to help you spot invalid hypothesis as early as possible, and in time for a course correction to affect the outcome. For example, while an annual plan is good, intermediate (quarterly or monthly) goals can identify shortcomings early, allowing you to update your hypothesis in time to still meet a meaningful annual goal.

Finally, it is important for you to care for your health and well-being at all times. This will prove particularly useful as the number of hypotheses reviews (pivots) mount.

Test your hypothesis

A key to success is to be diligent when testing your hypothesis. One way this can be accomplished: pre-schedule regular hypothesis review sessions and commit to them. An impartial advisor might help keep perspective, avoiding blind spots and denial from those personally invested in proving the hypothesis.

As you gain more insight into the hypothesis, you may be able to spot key performance indicators, which could prove useful to measuring progress.

Revising a hypothesis (or pivoting in entrepreneur terms) could happen either because the current hypothesis was proven invalid or even because a better and more powerful hypothesis can be formulated, based on the insight and data gathered during the hypothesis testing.

Learn from your journey

As soon as a more powerful hypothesis is identified by analyzing the data gathered, take the time to reflect:
  • How would it have been possible to identify this more powerful hypothesis earlier in the process? Which “early warnings” should have been in place?
  • Is this the most powerful hypothesis you can identify at this point in time?

Writing down your findings and/or sharing them with others is a great way to make sure this experience is internalized and becomes an intrinsic part of your life experience.

And please note than a culture of “fail fast” should not promote or expect failure. Rather, it should aim to succeed by mitigating risks to the best of one’s abilities, incorporating learning from eventual failures to the point where finding the path to success becomes second nature.

How comfortable are you with risk taking? Are you wired to succeed? How do you learn from your past experiences? Feel free to use the comment box below to share your experience and point of view. And please follow me, if you would like to be automatically notified when I publish new articles.






(Image courtesy of Naypong - FreeDigitalPhotos.net; Post updated Jun/22/2014)

Sunday, June 22, 2014

Corporate Innovation in a Numbers Driven World

This work by Marcelo Bernardes (@marcelobern) was originally posted on LinkedIn.


In his recent Forbes article, Neil Howe suggests that the shared leadership of Boomers and Gen Xers is a key driver behind the current risk-aversion behavior we see in the corporate environment.

This risk-aversion further challenges corporate entrepreneurs (aka intrapreneurs), and the execution of innovation driven projects, especially disruptive innovation ones. Here are some suggestions on how you can win support from your Gen Xer leadership and even engage millennials, who are eager to innovate and become intrapreneurs!


Be Numbers Driven Yourself

Revenue and profitability are key numbers for most customer facing projects. So start by figuring out how much revenue and profit your innovation project may bring.

It is much easier to convince a numbers driven leadership to invest in an innovation project, once there is a “proven customer demand”. Customer demand can be proven either through traditional means (e.g. market research, customer interviews, etc.) or by using corporate crowdfunding.

Regardless of the chosen approach to prove customer demand, remember that revenue data linked to customers opportunities is much more powerful than market size data. As such, a traditional sales funnel of sorts, or a pre-order list from a crowdfunding campaign are great ways to collect revenue data.

On the profitability side of things, focus on keeping costs down. Determining a minimum feature set, and then scaling up in phases is a great way to minimize costs, and increase profit margins throughout all phases of your project.

Identify your Minimum Viable Product

The term “minimum viable product” or MVP (Wikipedia) can be defined as
that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.
If a few customers can fund your innovation project, you may opt for offering it as a customized solution to be sold to a couple customers (or even a single one). On the other hand, if a high number of customers is required to fund your innovation project, you may do better with a corporate crowdfunding approach.

Keeping costs down during this initial phase will increase your likelihood of fully funding your project with the customers identified, then your numbers challenge will be reduced to proving profitability. Lower costs can be accomplished by using 3D printing for rapid prototyping (Wikipedia) of hardware components and public cloud (Wikipedia) for deployment of software components.

The project focus during this initial phase is to validate the market demand and customer needs. Scalability is not yet a concern, as the solution is not available for the general public but just a few customers.

For continued success, it is critical to use this initial phase to identify potential future customers. If you used a crowdfunding approach, you may want to keep the campaign open, so you continue to gather customer interest. For a customized solution, you definitely want to get the word out to other potential customers and build a sales funnel.

Scaling up to serve a larger audience

Once your customer interest has been validated and you understand the customer needs, it is now time to make your ground breaking solution available to the masses, building scalability into the process. In the numbers game, this phase is all about growing revenue and/or improving profit margins over time.

Get started by leveraging the customer interest gathered in the previous phase. Here is where keeping your crowdfunding campaign open could really pay off, if potential customers continue to express interest, and commit money, as your existing customers start to spread the word about their results.

It is always best to continue to serve your customers without disruption. Look for ways to gradually and smoothly transition from the 3D rapid prototyping and public cloud deployment to a more cost effective and scalable approach. This will also allow you to bring cost efficiencies and revenue growth into your project, allowing numbers to gradually improve over time.

Can these suggestions help you “sell” your innovation project to a numbers driven leadership? Is the corporate crowdfunding or traditional approach a better fit for you? Did you use a different approach to “sell” your innovation project? Feel free to use the comment box below to share your experience and point of view, and please let me know about your innovation project. If there is enough interest, I will look into internal facing and social innovation projects in a future post. And please follow me, if you would like to be automatically notified when I publish new articles.




(Image courtesy of bplanet - FreeDigitalPhotos.net; Post updated June/9/2014)

Wednesday, May 28, 2014

Transform Education into Life-long Learning


This work by Marcelo Bernardes was originally posted on LinkedIn.

As an undergrad student, I had to complete courses that did not seem to have value for real life. The arguments used at the time to justify this approach were:

  • We have to prepare you to be a professional, regardless of the actual field/industry you might end up working on, so we should cover all bases
  • This way you know in which book/body of knowledge to find the information, in case you ever need it during your career
  • We are teaching you to “learn how to learn”

While “learning how to learn” continues to be a critical skill today, the knowledge currently available over the internet has made the ability to cover all bases a questionable goal. And the speed of change, makes knowing the “right” book a daunting task.

On the other hand, being able to quickly derive value from the (learning and financial) investment is increasingly desirable. And soft skills like the ability to work in groups (in an increasingly diverse global and multi-generational workforce), and the ability to reach beyond your area of expertise (as part of cross-functional teams) are increasingly required for one’s professional success.

As we realize and internalize these and other changes happening around us, here is how we can led the way and retool our education system to address the needs of businesses and society.

Transforming education into a life-long learning experience


In our society, knowledge is needed in a snap, and only knowledge applicable to the task at hand is sought. Therefore, it is necessary to re-think our start-end bound “education” concept, one where we must cover a preselected number of topics, and transform it into a life-long learning experience.

This means going from a fixed curriculum to a flexible repository of knowledge available on-demand. And focusing on individual learning needs throughout each ones’ live, rather than looking to cover a specific set of topics during a class or degree.

Purposeful networking - the path to effective teamwork


As we are young, we tend to approach teamwork as an activity where we select our team based on common interests and personal traits. The growing workforce diversity makes it important for us to be able to deliver results regardless of our personal affinities with others. Students must have the opportunity to learn how to purposefully network with those around them.

Purposeful networking is the ability to identify one’s own strengths, communicate these strengths, and dynamically connect with others in a complementary-skill team to address a common goal.

And a life-long learning model is a great way for people to identify each other and connect with a purpose.

Becoming learners for life


So, if students do not “finish” a class, how can we be sure individual have the necessary skills to perform a task or a job? We move from grading to regularly assessing competencies. And there is a much better way than completing online tests for life. Let us "gamify" (Wikipedia) learning, individual, and professional development!

Rather than having school transcripts which show how well one did in each class, how about having a trophy case, assessing one’s soft and hard skills? A simple way for us to understand our strengths and areas where we might wish to develop ourselves, either to pursue a specific career path or achieve a specific personal growth.

Through knowledge gamification, individuals are empowered to improve themselves and pursue their aspirations, which is the first step to become a learner for life.

What is your take? Is your professional growth dependent on a degree? Would purposeful networking help you achieve your goals? Can gamification help you become a learner for life? Feel free to use the comment box below to share your experience and point of view. And please follow me, if you would like to be automatically notified when I publish new articles.


(Image courtesy of Stuart Miles - FreeDigitalPhotos.net; Post updated May/21/2014)

Thursday, May 15, 2014

Pro Services Best Practice - Partner with Sales

 
This work by Marcelo Bernardes was originally posted on LinkedIn.

Having had the chance to lead Professional Services teams around the globe, let me tell you the "secret" to make a successful career out of it: partner with all the sales teams your work with!

Far too often, I partnered with or coached Professional Services associates who would not find this approach easy or even natural. If you find it hard to partner with your sales team, please give me five minutes of your time, so I can elaborate why it makes sense. If partnering with sales does not sound natural to you after reading this article, please share your point of view and let me know where the rationale failed!

Understanding the sales mindset


Let me share what I learned from the sales people I worked with.

  1. Sales salaries (base+compensation) may be structured so the base salaries alone are not enough to keep people around (PayScale). So, the sales team is very motivated to meet and exceed their quota, which means most sales people (the best ones for sure) look for enough opportunities to exceed their quota.
  2. The vast majority of customers will not buy from a vendor if the customer is experiencing problems with that vendor (Zendesk). Sometimes this is even a pressure practice to have the problem fixed quickly. For the sales person, a customer with a problem is one less customer we can sell to. As a result, the vast majority of sales associates (at any level) avoid selling items which could lead to customer problems.
     

Professional Services: from risk to value-added


How does your sales team feel about selling Professional Services today? If they see it a risk, they will not sell, unless they are forced to do so! It is just logical, based on the sales mindset, right?

So, whose job is it to remove this risk out of the equation? Well, it is ours, on the Professional Services side! And until we make the sales team comfortable enough and able to explain the value of Professional Services, the job is not done.

To get started, offer to help the sales person sell the value of your contribution as a Professional Services associate (Inc). This is much easier if you:

  • Engage early to partner with the sales team during the sales cycle,
  • Assist the sales associates in their solution selling effort, and
  • Help the customer mitigate project risks.

Once a sales associate experiences the shorter sales cycle, and the higher purchase order value as a result of your consultative sales support, he/she is hooked. Other sales associates will get wind of it, and you better let your manager know that it is time to hire someone to help you!

Help sales teams make their quotas


I was fortunate enough to have been taught this "secret" six months into my first Professional Services assignment. I still live by it and today, and many of my personal friends around the globe are sales associates.

Does it mean I was able to always do everything I was asked by each sales team I ever met? Not at all. But it does mean that I partnered with sales to explore every option for us to win a deal (HBR). And when I reached my limit, I was open and honest with them. I explained our options, shared escalation procedures, and I was there with them when issues were escalated.

All in all, I did my best to help each sales associate meet and exceed their quotas, while advancing my company goals.

I encourage you to give it a try. Feel free to use the comment box below to share your experience and point of view. And please feel free to follow me, if you would like to be automatically notified when I publish new articles.


 

(Image courtesy of franky242 - FreeDigitalPhotos.net; Post updated May/8/2014)

Monday, May 5, 2014

Drive Corporate Innovation with Crowdfunding

This work by Marcelo Bernardes (@marcelobern) was originally posted on LinkedIn.

I have been tinkering with the concept of using crowdfunding to drive corporate innovation and I believe it can be done. While companies like IBM are experimenting with an internally focused corporate crowdfunding approach (HBR, Time), I believe a customer focused corporate crowdfunding approach can deliver far more value. So, let me share with you how you can unlock this value for your organization.

Standing on the shoulders of giants

In the article from Henry Chesbrough, he explains that: "You have to fight – and win – on two fronts (both outside and inside), in order to succeed in corporate venturing". This internal and external duality is a natural way to describe the corporate entrepreneurship challenge, and it is complementary to Peter F. Drucker's five simple questions (Amazon):
What is the mission?
What are our results?
What is our plan?
Who is the customer?
What does the customer value?
Please note that in the context of Henry Chesbrough's article, corporate venturing refers to: "new ventures inside a company", also known as intrapreneurship or corporate entrepreneurship (Wikipedia).

Borrowing a page from the startup play book

For a startup, crowdfunding (Wikipedia) can deliver the following advantages (Fundable, MDDIonline):
  • Funding: reduce the financial risk
  • Market validation: will people buy it?
  • Networking: identify potential investors
  • Free publicity: potential media coverage
  • Fail quickly: avoid "backing the wrong horse"
Now, let us explore how these points should translate to the corporate (or enterprise) crowdfunding world.

Winning the war in the external front

The war in the external front is won by addressing the following Peter F. Drucker's questions:
Who is the customer?
What does the customer value?
And so, corporate crowdfunding should:
  • Stack up projects against each other to gauge customer interests, needs, and desires of a much broader audience.
  • Validate the market for innovative projects, and identify potential customers, before any significant investment is made.
For more information about current market research practices and resources, check this Inc article.

Winning the war in the internal front

The war in the internal front is won by addressing the following Peter F. Drucker's questions:
What are our results?
What is our plan?
And so, corporate crowdfunding should:
  • Collect enough field data to prepare or fine-tune a business plan, setting more accurate expectations of project results.
  • Identify sufficiently motivated customers to "share" the project cost, thus reducing the project risk early on.
  • Gather data to prioritize projects, allowing the organization to focus on those projects more likely to appeal to the broader customer base.
  • Lead to a better understanding of the customer needs, helping identify critical cross-functional resources early on.
For more information about challenges associated with innovation within corporations, check this WSJ article or @InnovateWithin.

Success depends on flawless execution

Due to the very public nature of a crowdfunding effort, those looking to implement corporate crowdfunding should avoid:
  • Intellectual property exposure: consider engaging your legal team and filling the necessary patents up-front.
  • PR backlash: failure to deliver on such public commitments is likely to lead to a very negative press and social media repercussion (check this previous article for examples)
  • "Too much customer focus": what would have been the customer feedback if five years ago Amazon had asked their customers about possible interest to buy cloud based services? So, it is important to use the corporate crowdfunding data to complement your strategic planning, rather than replace it. Specially when pursuing disruptive innovation and opportunities to break into new customer segments.
While this approach can be used for both B2C and B2B scenarios, B2B corporate crowdfunding should address specific needs, which I will cover in a future article.

What is your take? Can corporate crowdfunding fuel corporate innovation? Are current market research processes able to address these new trends? Feel free to use the comment box below to share your experience and point of view. And please follow me, if you would like to be automatically notified when I publish new articles.

Monday, April 28, 2014

Leadership: attract & retain millennials or fail!

This work by Marcelo Bernardes (@marcelobern) was originally posted on LinkedIn.

Over the next decade, many organizations are at risk as they fail to attract and retain the very professionals necessary to keep them "alive".

Here is why

The workforce is changing:
"By 2025, millennials will account for 75% of the global workforce and by next year (2014), they will account for 36% of the American workforce." (Forbes)
"Millennials want to work for organizations that support innovation. In fact, 78 percent of Millennials are influenced by how innovative a company is when deciding if they want to work there, but most say their current employer does not greatly encourage them to think creatively." (Deloitte Millennial Survey)
So organizations will need to find ways to bridge any existing gaps with millennials, as those unable to cater to this millennial desire to innovate will struggle to attract and retain millennials, and may be unable to secure their own existence.

The enemy within

For years, a lot has been said about the inability of large organizations to innovate. In a recent article, Steve Blank, states "Every large company, ... is executing a proven business model". So, it should come as no surprise when large companies "... have a hard time with continuous and disruptive innovation.", continues Blank (Inc.). Does it sound familiar to you?

Still, organizations like 3M, and Google are widely recognized for their effort to promote innovation from within, also known as intrapreneurship, or corporate entrepreneurship (Wikipedia).

So, could intrapreneurship be just the tool to attract and retains millennials, and solve this conundrum? I say at the very least, it is worth educating yourself about it, after all, the future of your organization might be at stake.

Intrapreneurship 101

Although with a significantly smaller media coverage than its counterpart entrepreneurship, intrapreneurship reference material has been around for decades, and is still being created and fine-tuned as we speak. Here are two recently released books on the topic:
If your organization would rather focus on the greater good, social intrapreneurship (Wikipedia) might be a better fit. In this case, The League of Intrapreneurs is a great starting point for you. In particular, their Cubicle Warriors Toolkit, is a great resource which can be used to guide your own social intrapreneurs.

And finally, for curated articles on intrapreneurship and related topics, feel free to join us at Innovate Within (@InnovateWithin), where our goal is to keep novices and experienced intrapreneurs alike up-to-date on the latest information about intrapreneurship, and uncover areas where intrapreneurship concepts may be worth exploring within your organization.

The healthy intrapreneurship "side effect"

Once your intrapreneurship program is underway, engage millennials and gather their feedback. And make sure to measure the program impact on employee retention. Including questions about the program on your regular employee surveys and exit surveys is a great way to track progress, and fine-tune the program.

It could also be of interest to track other business results, after all, a well oiled intrapreneurship program should increase your ability to create value from within and improve your organization social accomplishments and bottom line.

What is your take? How is your organizations attracting and retaining millennials? Do you have experience with intrapreneurship programs? Feel free to use the comment box below to share your experience and point of view. And please follow me, if you would like to be automatically notified when I publish new articles.

Wednesday, April 23, 2014

Will Customer Service Ever Be The New Marketing?


This work by Marcelo Bernardes (@marcelobern) was originally posted on LinkedIn.

Industry experts have been touting this convergence for years, but will these practices ever fully integrate? What should you be doing today?

Customer Service and Marketing lines blur

More and more, social media is becoming the primary mean by which users reach out to ask for companies to solve their problems and express their opinions about a brand. According to the 2012 American Express® Global Customer Service Barometer, 1 in 5 Americans have used social media to get a customer services response at least once in the last year (infographic).

The obvious challenge is that such interactions happen on a very public forum. So, every reply needs to be carefully crafted in a positive way, and in line with the company branding. Failure to do so, has lead to disastrous consequences, as in the cases of McDonald's, Tesco, and many others.
Social media represents a new dynamic in customer experiences in which the company, its products, services, reputation and the way it treats its customers become highly visible to millions of people. - Dr Natalie Petouhoff and Kathy Hermann, Calculating the ROI of Social Customer Service

Convergence challenges

Industry experts have been arguing the convergence of customer service and marketing for years now, so why has it not happened yet? Here are some reasons:
  • Current investments: organizations have already made huge investments to purchase, train, and deploy customer service and marketing solutions. A compelling business need is required to justify additional investment to introduce a new product. This is history repeating itself.
  • Evolving customer requirements: social media is still fairy recent, and user behavior is still evolving (SOURCE). Forward-thinking organizations are learning what is required to address the needs of today and reacting to new trends as they are uncovered.
  • Organizational aspects: in many corporations, marketing and customer service activities might have been historically split among different areas (Wikipedia), which means the CEO is still the first level at which these functions converge today. And CEOs might not be aware or incentivized to promote such convergence.
  • Milking the cash cow: as it is often the case ("The Innovator's Dilemma"), established software vendors for the customer service and marketing segments have little incentive to promote consolidation, and disruptive innovation.

What are trail blazers doing?

Rather than "boil the ocean" trying to figure out how customer service and marketing might converge, trail blazers are identifying and addressing their current social customer service need, to reap the benefit.
... consumers who have used social media for service in the last year are willing to pay a 21% premium at companies that provide great service. They also tell three times as many people about positive service experiences compared to the general population. Ultimately, getting service right with these social media savvy consumers can help a business grow. - Jim Bush, Executive Vice President, World Service, American Express

Best practices you should consider

The article "The Ignored Side of Social Media: Customer Service", by Knowledge@Wharton, shares the following practices about effective social customer service:
Responses must be personal, and it’s essential to strike the right tone. But how personal? And what’s the “right tone?”
... (the) team might look at a customer’s Facebook page, timeline or Pinterest pinboard before crafting a response. "We strive to make it look real-time, but we’re really doing a ton of research in the back."

The turning point: convergence might happen when...

Once organizations figure out that their marketing (e.g. brand awareness) budgets can be reduced by excelling at social customer service, vendors will be compelled to cater to the changing needs, and enrich the customer service tools with marketing features to measure "campaign" effectiveness, for example.

What is your take? Feel free to use the comment box below to share your point of view. And please follow me, if you would like to be automatically notified when I publish new articles.

Friday, April 18, 2014

Cloud Integration (iPaaS) Analysis & Trends

 
This work by Marcelo Bernardes (@marcelobern) was originally posted on LinkedIn.

From vendor fragmentation and acquisitions to open source, the activity level in the cloud-based integration market, is indication that we are about to experience deep changes, similar (or bigger) than those experienced when software as a services (SaaS) was introduced (Forbes).

Note: please check Wikipedia for details on what is cloud integration, also known as infrastructure platform as a service, or iPaaS.

This article is a short compilation of the cloud integration market, vendors, and trends.

iPaaS market

The iPaaS customers can be segmented as follows:
  • Individual and start-up customers: these customers are cost sensitive, so vendors targeting this segment generally have a freemium (Wikipedia) business model, and their prices go up to USD100/month. Zapier, IFTTT, and Cloudpipes are examples of vendors in this group.
  • Enterprise customers: these customers are looking for global footprint, scalability, and performance. Vendors in this segment may offer a free 15-30 day trial followed by a paid service, with prices starting in the USD1,000/month range. Dell Boomi, Informatica, and MuleSoft are examples of vendors in this segment.

Individual and Start-up focused vendors

Current Focus: For these vendors, the focus has been in either breadth of SaaS integrations (e.g. Zapier with 250+ integrations), or niche market (e.g. IFTTT which unlike others, includes home automation capabilities).

Entering the market: In this segment, new entrants may use an opportunistic approach, for example, by employing an invitation only marketing approach to pre-screen potential customers, and prioritize development cycles (this seems to be the approach being employed by Cloudpipes).

Growth opportunity: Due to growing number of vendors in this segment, we might see companies looking to carve their own niche with a purpose-built approach (The Agile Entrepreneur), going forward in this segment.

Enterprise focused vendors

Current focus: Due to the growing market opportunity and currently decentralized fashion in which iPaaS is being consumed by line of businesses, a significant discrepancy of capabilities exist between vendors, in part fuelled by the fact that current buyers are not accounting for the enterprise-wide needs, and not driving such enterprise requirements back to vendors.

Entering the market: In the recently released 2014 Magic Quadrant for Enterprise iPaaS (complete the form to download), Gartner analysts indicate that the current growth in the iPaaS market is leading to a "free for all" where:
"... growth will attract investments from startup companies, established on-premises middleware players, providers of other forms of PaaS ..., and SaaS providers all eager to get a piece of the pie..." (2014 Magic Quadrant for Enterprise iPaaS)
Growth opportunity: In this segment, disruptive innovation, and exclusive partnerships could be explored to carve a niche through a purpose-built approach (The Agile Entrepreneur). Examples of such approach are a vendor focused on telecom integrations, due to its unique partnerships in this industry; or a business process focus, where a vendor specializes on customer service integrations across multiple industries.

Other noteworthy developments

There are some specific approaches being explored which could significantly impact the course of events.
  • The availability of open source iPaaS options (e.g. Bip.io) opens the possibility for vendors to primarily operate an open source iPaaS solution, much so along the lines of web hosting using Apache.
  • Some iPaaS vendors are allowing users to build their own connectors (check out Zapier), which could lead to a crowdsourcing created advantage difficult to be matched by late entrants.
  • Other vendors still are using crowdfunding as a way to gauge user interest and spread initial development cost over a number of potential customers.
  • SaaS and enterprise software vendors are leveraging iPaaS rather than developing native integrations (e.g. Podio announcement).
I am working on a more detailed iPaaS vendor comparison, and if there is enough interest, I would be glad to share it with you. So, feel free to use the comment box below to let me know which vendors you might be interested in.

And please follow me if you would like to be automatically notified when I publish the iPaaS vendor comparison or other new articles.


 

(Image courtesy of KROMKRATHOG - FreeDigitalPhotos.net; Post updated Apr/11/2014)

Monday, April 14, 2014

Why add start-ups to your investment portfolio?


 
This work by Marcelo Bernardes (@marcelobern) was originally posted on LinkedIn.

I recently had an epiphany: I should review my investment portfolio to include start-ups. Let me share my rationale with you, so you can reach your own conclusions.

The Corporate Scenario: Proven Execution

According to Steve Blank, "Every large company, ... is executing a proven business model". So, it should come as no surprise when large companies "... have a hard time with continuous and disruptive innovation.", continues Blank (Inc.). And my observation of large companies corroborates that seeking efficiencies and cost cutting, are here to stay.

Millennials Are Here!

There is a lot of debate about millennials. Be it because of economic reasons (Entrepreneur), social reasons (infographic) or education reasons (CNBC), the reality is that millennials prefer to build their own businesses, rather than join existing companies, regardless of size.
"54 percent of Millennials say they either want to start a business within the next five years, or have already started one" (Miami Herald)
"By 2025, millennials will account for 75% of the global workforce and by next year (2014), they will account for 36% of the American workforce." (Forbes)

The Perfect Storm

So the stage is set. By attracting Millennials - the youngest generation in the workforce, start-ups are likely to become the key innovators. As innovation eventually leads to (economic) value creation (infographic), it means today's start-ups are to be responsible for a growing share of the value creation in their industries.

On the other hand, by failing to attract Millennials and foster innovation from within, large organizations will have to acquire innovative start-up companies, often at a premium price, in order to incorporate the needed innovation to their product lines.

Granted, historically established companies were unlikely to come up with "the next big thing" ("The Innovator's Dilemma"). That is not what I am talking about here. I am talking about feature level innovation, which used to be driven by internal R&D and bright professionals, who may be leaving to build their own businesses.

Start-ups as Part of Your Investment Portfolio

So, for an investor, this means that start-ups are ever more attractive, specially for those looking for growth. Fortunately, equity crowdfunding is now available in various countries, making it possible for every day investors to explore start-ups as an investment option.

Still, as 80% of the start-ups fail in the first 18 months, for the equity crowdfunding start-up investment to be profitable on average, it is desirable to mitigate this risk. And why not take a page from the venture capital playbook and leverage start-up funds, where you can invest in a group of start-ups at once, aiming to reduce the investment risk. And in fact, companies like wefunder are already offering such products.

That is my rationale to add start-ups to my investment portfolio. I would like to hear your thoughts, so please feel free to use the comment box below to share your point of view.

And feel free to follow me if you would like to be automatically notified when I publish new articles.

Thursday, April 10, 2014

Establishing a Customer Base in Brazil: Avoid Common Pitfalls

 
This work by Marcelo Bernardes (@marcelobern) was originally posted on LinkedIn.

During a casual conversation, I heard the tale of a technology company looking to establish a presence in Brazil, but failing. It turns out the company had decided to solely rely on a local partner to develop the market for them, and had little checks and balances to track the progress being made by the partner.

With all the interest in the Brazilian market over the past decade, I have heard similar tales too often. Like many others, I also learned the hard way, so let me share some of that learning in hopes it will increase your chances of success.

Some common challenges

In order to avoid the most common mistakes, please consider this short list of suggested "homework" items which should be addressed prior to trying to establish an operation in Brazil (some of this rationale might even apply to other geographies as well):
  • Competitors and taxes: check if your main competitors have a local assembly in Brazil. If that is the case, be ready to fight an uphill battle, as your products will be taxed at import rates, while competitors will benefit from local tax breaks.
  • Language hurdle: if your customer support help desk does not have the ability to take calls in Portuguese, you will struggle, and likely government contracts are out of your reach. This is an item where a good local partner might help you easily bridge the gap.
  • Local references: initially, Latin American or even global references might suffice to win the first deals. Some customers (e.g. government) might require local references. Make this determination early to avoid spinning your wheels.
  • Red tape: be ready to jump through hoops to comply with local regulations. A good local partner should definitely be able to help here, even though expediting some processes may not be possible. So, be patient and add for extra time when planning activities early on.

Establishing your presence

If after your homework you still believe entering the Brazilian market is a good business decision, here are a couple steps which should help you win the first deals and setup a "command post" in Brazil:
  • Put your best foot forward: it will be critical to make a great first impression. So, plan to have a top subject matter expert fly to Brazil on a regular basis to help develop the first opportunities and get to know the customers. This might seem expensive but will help you make sure deals were not lost due to lack of technical expertise in the local team/channel partner.
  • Leverage your customers: check your installed base to determine which customers might have a presence or future interests in Brazil. Even customers with no local presence might have local business partners which could become your initial leads and even your first Brazilian customer. Parts of this sales strategy might help you also.
  • Channel partner selection: it is always easier to trust an old friend, so, if a current channel partner has presence in Brazil, you could leverage them. It is also a good idea to find out who are the channel partners for your main competitors in Brazil, and make sure your channel partner candidates are already familiar with their future competition.
  • Check and balances: it is critical to be able to measure the impact of your effort (direct or through a channel partner). In the case of a channel partner, make sure to keep track of proposals delivered, contact names, and win/loss analysis. An important point on the win/loss analysis is to uncover possible feature gaps, due to unique local needs. It happens more often than you might think.
Of course, each situation is different, for example, hardware, software, or services have specific challenges associated with each; so please use the comment box below to share your experience and I will be happy to reply with my thoughts on how to address any specific challenges you might be facing. For now, welcome to Brazil and good selling!

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(Image courtesy of domdeen - FreeDigitalPhotos.net; Post updated Apr/30/2014)