In the first blog installment of this series, we discussed strategic alliances, why small technology companies should seriously consider entering into a strategic alliance with other companies, and provided factors that a business owner of a small technology company should consider in determining which proprietary technology should be made available for licensing under the strategic alliance. Once you, as the business owner, have identified proprietary technology for licensing, what additional steps should you consider in identifying a strategic alliance partner to develop, market and distribute products based on your technology?

In this second blog, we discuss how you can find strategic alliance partners and why these partners should be further qualified.

Tip – Identify and qualify your potential licensees.

Do you know of any companies that are selling products relevant to your technology? If so, they may be a prospective partner, particularly if your technology can be used to improve or complement the prospective licensee’s existing products, and your partner has the means to commercially exploit the technology. However, if you don’t know of any companies offering such products, how do you find prospective partners? Good sources for potential licensees include listings in trade magazines, directories, patent and literature searches. Visiting trade shows or conferences and word-by-mouth publicity is another good way to identify and meet potential licensees. Alternatively, you can also publicize the availability of a license through trade journals and the United States Patent and Trademark Office (USPTO) Official Gazette if the technology is patented, and have potential licensees come to you.

Before you contact the prospective partner to discuss your technology further, you should qualify the potential licensee by ascertaining several factors such as financial strength, technical and market expertise, sales/distribution network, commitment to relevant product line, etc. Much of this information is available online for free or through commercial databases offered by LexisNexis, Hoovers, and Dun & Bradstreet. The investigation can be done in a brief fashion initially before the licensee expresses an interest in the technology. You can follow up more fully once the prospective licensee shows some interest.

Qualifying the prospective strategic alliance partners before you begin serious discussions is important, as it may help a small business owner to avoid headaches later on by not entering into an alliance relationship with the wrong partner. Before considering serious discussions with a potential partner, it is helpful to have a non-disclosure agreement in place. We will discuss such agreements in the next blog.

Welcome to the second in a three-part series on how to develop your brand.

In the first posting we talked about how important (and smart) it is to capture the investment of time and money you have put in your company by developing a brand that will build equity for you and your business.  We learned about the importance of developing your brand from within and reviewed some exercises to help you define your true differentiators by looking at the inside first.

Now, we look to the outside world to learn how the competition can influence our brand.  When researching the competition look at their business and how they speak to the world. This will help you gain deeper insights into how to make your brand stronger. To analyze the competition follow these four easy steps:

1. First, choose 3-5 direct competitors.  If you don’t have that many in your market then look to another city or country and find a competitor there – even if you never plan on expanding to that area.
2. Scour your competitor’s website and learn about their products, services and what they are emphasizing.  Note the type of photography they use (people, nature, etc.) and their colors (primary, bright, conservative, funky and so on). If your competitor is a publicly traded company search engines like Google Finance can give you great insight into how your competitor’s company is structured.
3. Note factual details: price, selection, distribution, service delivery and so on.  In the case of a services-based business look at methodology, customer base, geographic reach.
4. Then, start to note the language they use - “fastest”, “best quality”, “luxury”, “softest”, “tastiest” – whatever it is. You will find that all your competitors speak the same way. Note these similar phrases and descriptive words.

If you feel you don’t have any competition then think about a time when you will be very successful and list the companies you know will want to become your competition.  Repeat the fours steps for them.

In summary this research is:

• A definition of your brand that was articulated by your culture and who you truly are (Step 1),
• A picture of your competition – what types of images and colors they are using, overall do they look clean and sophisticated or crowded and confusing,
• A summary of what they offer and how they offer it, and
• A list of the standard phrases and wording used by your competition.

Use this wealth of knowledge to see how your organization IS different from the rest.  If done right, when you layout all this information before you the answer should jump right out at you.

If your competition is talking about luxury, quality and craftsmanship then you should use other words like elite or best-in-class, care, attention-to-detail, and skill.  Be certain to stick to a vocabulary that feels like the right fit for your organization.

It is shocking sometimes how little knowledge some companies have about their competition.  A deeper review of your competition and who you are will build a strong and differentiated brand.  If done with care and focus, how you present yourself to the outside world (your brand) will be both different than the rest (the competition) and a true reflection of what you are on the inside.  When you have this outside-inside match you build trust with your customer and that breeds success!

Did you know that 80% of all sales happen on or after the 5th contact? Yet most small business owners only do one or two follow-ups with their prospects and clients. That means you are missing out on a lot of business and leaving money on the table.

Although we worry about contacting people too much, studies show that most people need several contacts (that are useful and relevant to them) before they’ll say yes to being your client.

People need to learn to trust and like you before they’ll enter into a relationship with you and that takes consistent connection. Follow up with people to let them know that you are sincere in wanting to form and nurture an ongoing relationship, that you understand their concerns and problems and that you’re in for the “long haul”.

Also, people buy when they are ready, not when you’re ready to make a sale! It’s important to constantly keep in front of people so that when they’re ready to buy you’ll be there. In other words, you have to follow up with them regularly.

People usually need to be exposed to a marketing message several times before making a decision to purchase.

Another reason to stay top of mind in your prospect’s and client’s mind is that they may not be ready to purchase but they may know someone else who is. By staying in front of them with consistent follow up, they’ll have the information, confidence and trust to refer you to their friends, family, associates and others.

Start implementing some follow-up marketing strategies today to make ongoing, consistent contact with prospective and current customers - so that you can stop leaving money on the table!

The Internet is still a work in progress, but most would agree that the handful of companies below made it what it is today. Review and discuss amongst yourselves!

1. America Online – Three little words started it all…You’ve got mail. AOL was the first true web-based email provider used on a grand scale, and also home to more content than any other web destination for the last few years of the 20th century. Time has not been kind to AOL (and neither has Time Warner for that matter!) but it will always remain one of the hallmark companies of the web’s infancy.
2. Yahoo! – Still chugging along over ten years after its birth, Yahoo! changed the way people found information online. The Yahoo! search engine was capable of bringing people to their destination quicker and more efficiently than anything else preceding it.



3. Google – The biggest, baddest web-based company on the block. Google is the 800 pound gorilla for a reason - their search technology reigns supreme and their targeted pay-per-click advertising mechanism has been a veritable license to print money for the past five years. Always looking for the next big thing, Google would appear to be riding high for the foreseeable future.
4. MySpace- The social pioneers showed the world the power of music, friendship and Tila Tequila. Purchased by Rupert Murdoch and Fox several years ago, MySpace continues to bring millions of young people and adults into its “circle of friends” every day, but the jury is still out as to how to monetize all the loyal users in any significant way.
5. Amazon – Changing the face of the web is one thing, but when you change the way people shop, that is truly something to behold. People thought Jeff Bezos was crazy when he said he wanted to sell every book on the planet (and more) but now Amazon has become a part of every reader’s (and shopper’s) life.



6. eBay – Everybody loves a garage sale or flea market, but until eBay came along, nobody had ever believed that the concept would fly online. Hundreds of millions of auctions later, eBay is the only game in town when it comes to bidding for new and used products in a completely user-defined environment. Together with Amazon, eBay created a community that held people accountable for the way they behaved online – another refreshing concept.
7. Facebook – A more mature version of MySpace, Facebook has hooked up millions of friends, relatives and co-workers using its sublime combination of updates, photos and groups. Like MySpace, Facebook is looking to capitalize on the loyalty of its users (and their data) but there is no denying their position as one of the biggest players on the web’s stage.
8. Mozilla – It takes a lot of guts to take on Microsoft, but Mozilla has managed to do it and build a tremendously loyal following in the process. The company’s Firefox browser is currently on its third version, and with each edition, gains more fans and followers who want something more out of their browser. Other companies have gone head to head with Microsoft, but few have done so as successfully as Mozilla.



9. Apple – While not a true Internet company, this list would be incomplete without mention of the folks who took the entire music industry and moved it online – saving the record label’s collective tails 99 cents at a time. Apple made the web a destination for music that people are actually willing to pay to own.
10. Napster – They let the peer-to-peer genie out of the bottle and created a whole heap of trouble in the process. Wherever you stand on the issue of file sharing and piracy, there is no denying that Sean Fanning and Napster were true web revolutionaries.

2008 is not even three-quarters of the way home, and already the Internet sector has seen some significant startups work their way into the public eye. An economic downturn and weak credit market have not kept these companies from continuing their quest to be “the next big thing.”

This young data analysis company looks to change the way we analyze information and predict future problems. The tech team at V-Kernel has developed a series of proprietary algorithms that collect and compute data from virtual machines (servers) and then determine whether or not there will be conflicts within that data in the future. The company will help businesses effectively use virtual servers to bill their clients more accurately.

With its groundbreaking Basecamp software already making project management easier for small businesses around the world, 37 Signals has set its sights on bigger and better things with its open source web application Ruby on Rails. Instead of piling on more and more features, 37 Signals keeps things simple, adding only basic features to their products that enhance usability. The company currently maintains only a handful of employees, but look for that to change as their software continues to grow in popularity.

The more serious sibling of social networking sites such as MySpace and Facebook, LinkedIn helps individuals network with those within their industry or who need their services. Despite a much smaller user-base than Facebook, the company still forecasts revenue of $100 million per year (compared to $150 million for Facebook). With a redesign in place, watch for this company to make some serious movement in ’08 and beyond.

Slide is a tech company that is proud to play both sides of the fence. Developing widget applications for social networking destinations and their rival, stand-alone websites, Slide is like the weapons supplier in a battle that looks to rage on for years to come.

Taking the touch-screen into the 21st century is the goal of this two-year old startup company. Already known throughout the world for the groundbreaking work on CNN’s election coverage (the company designed the data-filled, eye-popping technology used by the anchors to deliver polling results) Perceptive Pixel has recently scored a top-secret contract with the Department of Defense. And although the terms of that deal are secret, the company itself won’t be undercover for much longer.

The Spanish start-up Fon is a firm believer in the axiom “give and you shall receive.” Tired of paying for WI-FI all over town, the company’s tech gurus have developed a system that allows home WI-FI users to “share” their connection with the world in exchange for free use of the overall network. If the Fon network becomes a world-wide affair like the company’s founders hope, that trade-off should turn out to be a sweet deal.

You don’t have to be crazy to take on Google at its own game…but it helps! Luckily, the team at Powerset is as ingenious as they are nuts, and have developed a search engine technology that utilizes real language to put search terms into the proper context within a sentence. That means more effective searching for the end user, and a more targeted advertising stream for businesses.

Loopt combines social networking with GPS technology to create an application that lets people know where their friends are and what they’re doing. You can even set alerts that announce when people on your friend list have closed to within a certain radius of your position. Creepy concept, but one that incorporates enough social media and blogging to make this company one to watch.

This fast growing maker of lithium ion batteries is revered among the “green” business community because of its partnerships with the top electric car makers in the world. Simply put, as the automotive world moves forward and becomes more fuel efficient, A123 will be there to power the journey.

Perhaps the most innovative start up to watch in 2008 is 23andme. For a small price of $1,000 this company will provide you with a detailed breakdown of your DNA. Everything you ever wanted to know about yourself will be there. It could be a boon for those individuals at risk for hereditary illnesses or those seeking more information about their origins. 23andme even plans a social networking hub to match you up with those who share your characteristics.

We are all sinners – at least in the business sense. And, it is hard not to be a business sinner today. In our current pell-mell state of rushing about putting out current “business fires” it would be beyond the capacity of mere mortals not to make one or more of the so-called business sins. Knowledge of these seven great business sins will not make you perfect, but can allow you to be a better business manager.

1. WORSHIPPING HIGH PROFIT MARGINS
If you maximize your profit margins, you’ll also maximize your competition. High margins mean your competition will lower their costs just to beat you out. Rather than have the highest profit margin, go after market share instead.

2. MISPRICING A PRODUCT OR SERVICE ON WHAT “THE MARKET WILL BEAR.”
Maximizing the price of a product or service based on what people will pay will not increase your market share. Find your niche, stay in it, and price your product or service to bring in more clients and customers.

3. USING COST-DRIVEN VS. PRICE-DRIVEN PRICING
Cost driven is taking in all your costs and adding a profit margin on what you sell. Price driven is coming up with a price that will cause your product or service to move. It’s usually a lower price, but with that comes less competition. If you get a handle on costs, become price driven and get market share—you will beat out the competition.

4. FINANCIALLY STARVING THE OPPORTUNITIES & FEEDING THE PROBLEMS
Because business owners often have trouble focusing on more than one concern, they put capital into old problems rather than putting it towards new opportunities. Old problems keep you stagnant whereas new opportunities are potentials for growth and can bring in much-needed revenue.

5. PLANNING YOUR BUSINESS FUTURE IN AN ECONOMIC VACUUM
Day-to-day activities of running a business keep many business owners unaware of what’s going on in the economy. This causes them to react to changes instead of planning for it. Seeing beyond the forest will help you prosper in what will be a turbulent economy.

6. NEGLECTING THE TOP LINE (SALES)
Unless your sales and revenue are growing, your bottom line will eventually shrink. Just being a good money and production manager is not enough. You must be a good marketing manager to bring in more business, referrals, and sales.

7. STRAYING FROM YOUR CORE BUSINESS
Don’t go into a business that you know nothing about. It’s foolish to branch out if your second business doesn’t increase your sales significantly and adds to your bottom line. Unless you maintain a certain rate of return on your invested capital, you may wind up losing both.

I talked in my last blog post about the importance your marketing mindset/attitude has on your success. Whether your mindset about marketing is negative, positive or most likely a little of both, I’ve found that an “adjustment” is essential every now and then.

Many of us feel that we have a “good enough” attitude towards marketing and selling our services and ourselves. However, take a look at some of the following statements and see how many have crossed your mind or passed your lips:

• I’m not smart enough to learn that
• My business isn’t very special
• Who am I to think people will want to listen to me
• I won’t be able to figure it out
• I doubt that I’ll be a very big success
• It’s too hard to market
• I don’t think I’m going to make enough money
• I’m not a good enough speaker, writer (fill in the blank)
• People won’t like my offerings
• I don’t want to be a pest
• There are already people doing this and they’re better than me
• I can’t sell
• There isn’t enough time to market my business

Some of these thoughts aren’t necessarily specifically about marketing, but they can still affect how we view marketing and perform marketing tasks.

The cause of negative beliefs can come from different directions: other people’s opinions and actions, a bad experience, the media, and so on. It doesn’t really matter where or how these beliefs originated.

What is important is that you learn to recognize when you’re thinking a limiting belief about yourself, your services, your products or your business. You need to realize that this is affecting your willingness and ability to market.

Try using positive affirmations and replacing negative thoughts with positive ones.

It really doesn’t matter what your past conditioning and experiences are, or even how understandable your issues with promoting yourself are. You need to ensure that what you think and say about marketing is positive and supportive of yourself and your vision - or you’re going to have difficulty making your business a success.

The world is full of wealthy men, but how many of them truly impact every aspect of our daily lives? The following ten individuals all have the ability to change the way we live, work and think about our world.

1 & 2) Larry Page and Sergey Brin

The founders of Google have built their Yahoo-smashing search engine into a growing empire that shows no signs of slowing down. Page and Brin have an amazing knack for making good decisions and as a result have been able to move into the online advertising market, television and other markets, all while seeing their stock continue to rise. They are two genuine innovators residing at the top of our list.

Here are the 5 most important aspects of the business that investors want to read about in your business plan:

1) That The Company Has Focus

The company has clearly defined its business and can state it in a single strong sentence that says it all. Yes, your plan probably will have a more expansive description in its executive summary but you need to open your plan with that one simple declaration to show the clarity of your vision for the business.

2) That The Market Has Potential

The company has a large existing market for its products and services. If your company does not have significant growth potential then it is probably not going to be of interest to many equity investors. If you are shooting for debt based capital that may not matter most to them (market stability would be though so keep that in mind if your plan is geared towards raising debt based capital); but to an equity investor growth is of paramount importance and the size of the market signifies the opportunity potential.

3) That The Company Has Specific Solutions For Their Market

The company has identified what its customers most need and has created a value proposition for them to make it a simple “buy” decision. If there is nothing unique or distinct about your company’s products/services then you do not have a defensible position in your market. Defensibility of your market position is of key importance to investors and funding sources.

4) That Customer’s Show A Readiness & Willingness To Buy From The Company

In an ideal situation, the company’s customers have a recurring need for their products and/or services, with a reasonable sales-cycle and opportunities for premium up sell of additional products & services.

If you don’t have customers ready and willing to buy now … then that does not bode well for interest from most investors and funding sources. If your market is a long-term development type of proposition then your company will need to prove that it is truly a disruptive business model that will have people flock to it once it is functional. Its not so much “if you build it will they come” but rather “if you build it will they buy?”

5) That The Company’s Main Dynamics Are Strong

What are the main dynamics of a company? Simply put it is two components: a sellable product/service and a management team that can run the business well. Investors and funding sources want to know that the company has created unique solutions superior to their competition. And that the management team consists of smart people able to deliver products/services to their customers, control expenses and make a profit … repeatedly.

* * *

If you create your business plan to address the above; then you are ahead of what most people end up with in their business plan. Weaknesses (dilution) caused by putting too much of the wrong content and not enough of what mattes most, kills interest in a company’s plan. It’s the answers to these 5 important aspects that investors and funding sources find most interesting. How well you answer them will affect the outcome of your search for capital.

In my next post I will get into how to use these 5 as your guide for creating (or revising) your business plan to make it an optimal document that says what it should. Be sure to watch for:

How To Really Get Your Business Plan Read (by investors & funding sources)! Learn how to create the type of business plan that investors and funding sources will enjoy reading and will take action on.

Dennis Lowery
Adducent, Inc.

Recently, Circuit City made news because of an employee’s reaction to a spoof published in Mad Magazine.

You can check out the faux ad here.

I read Mad Magazine as a kid, years ago — the exact number of years ago is not relevant; most of the usual gang of idiots from when I read it are still alive and still writing for it. (How’s that for a career plateau?) And now they have a website.

As well as a bit of controversy because a Circuit City employee saw the spoof, and didn’t like it, and decided to respond.

How?

Apparently 40 Circuit City stores also sell magazines, including Mad Magazine. The company could’ve just pulled the issue, but instead, an employee instructed all 40 stores to “remove” and “destroy” all copies of the offending issue.

That email got out, and the spoof turned into an incident. Ultimately, a Circuit City “PR guy,” James Babb, wrote a self-deprecating letter of apology, noting that he had written to the editors of Mad Magazine, explaining that “As a gesture of our apology and deep respect for the folks at MAD Magazine, we are creating a cross-departmental task force to study the importance of humor in the corporate workplace and expect the resulting Powerpoint presentation to top out at least 300 pages, chock full of charts, graphs and company action plans.”

The result: Mad Magazine got a significant boost because no one really has paid any attention to the magazine. (Some online posts mentioned being surprised that Mad Magazine was still publishing.) Circuit City, on the other hand, is taking a hit for not having a sense of humor and for mishandling the situation. And way more people know about the Mad spoof than would have seen it or would have talked about it if Circuit City had done nothing.

This is known as the “Streisand effect, ” defined by Wikipedia as “a phenomenon on the Internet where an attempt to censor or remove a piece of information backfires, causing the information to be widely publicized. Examples are attempts to censor a photograph, a file, or even a whole website, especially by means of cease-and-desist letters. Instead of being suppressed, the information sometimes quickly receives extensive publicity, often being widely mirrored across the Internet, or distributed on file-sharing networks.^[1][2]” (The term was coined after Barbra Streisand sued a photographer who had taken and posted an aerial photo of her house in a publicly available database.)

We can see the Streisand effect at play recently with Boing Boing, when Xeni Jardin, a contributor to the site, “unpublished” — a nicer way to say deleted — “all references to a blogger named Violet Blue,” according to a New York Times article, “Poof! You’re Unpublished.” The mere act of “unpublishing” became known, and had the opposite of the intended impact.

So, here are four variables to consider about managing corporate reputation:

1. What’s being said?
2. What kind of reaction is being generated by readers?
3. Where is the statement appearing?
4. Who wrote it?

By evaluating each variable, you can make the decision as to the appropriate way to respond. What’s important to keep in mind is the need to keep a sense of humor and the need to take emotion out of the process (this is the first mistake Circuit City made).

For example, we had a client once about whom someone was posting very negative statements. We looked at those variables, and determined:

1. What was being said was very negative and had no basis in fact. The company could have sued, and would’ve have had a decent case.
2. These posts were not generating any attention, buzz or links. In part, it may have been a topic that most people didn’t understand or care about or because the rants were rambling and incoherent and filled with typos and bad grammar.
3. These posts also were published on obscure sites, with dubious credibility.
4. The person was writing deeply-felt pieces but had no credibility.

This last factor is not always important, however. For example, a New York Times article this week, “On Wall St., Reputation Is Fragile” by Andrew Ross Sorkin, wrote about the downfall of the lesser known of the two Steven Rattner working on Wall St. The reason: posts with all kinds of allegations about Rattner were written by the ex-husband of the woman with whom Rattner had had an affair several years earlier; the posts also contained inaccuracies, according to the Times. Yet because the posts were so widely available, Rattner, who had been called a rising star, instead resigned from his job.

In the case of Circuit City, the “who” didn’t matter. I’d say the fact that it appeared in Mad Magazine also counted against taking any action; that might be different if Mad targets the ideal Circuit City customer. If Andy Borowitz wrote something similar in his “Next Month’s Business News” column in Conde Nast Portfolio, I think that could be different if only because Portfolio readers could be investors or shortsellers of Circuit City stock. (However, I would have advised against taking action, even if the spoof had been published in Portfolio.)

As for evaluating the reaction the spoof generated, Circuit City could have done a number of searches to see if there were any. But disposing of a few copies from 40 stores was far from being the right call.

There are steps companies and people can take when the media gets the facts wrong. But you can’t do anything with humor or with opinion.

Bottomline: if they had been asked about the Mad Magazine spoof, Circuit City should have said, “What, us worry about satire in Mad Magazine? It’s an honor to have Mad Magazine poke fun at us.”

For more perspective on this matter, check out the Ragan Report’s article, “Circuit City redeems a PR blunder,”.