With this validation under their belt, he hoped that the VC he was meeting with would see the promise. However, he left the meeting empty-handed, though the VC parted significant amounts of advice on how he might proceed. The reason he gave for declining the investment, though, was something along the lines of:

It’s not big enough for me to get involved. I think your business will do well, and will be profitable in the near future. However, you have a long road in front of you to reach the market, and the competition is quite strong. It’s not for me.

There are actually two types of investors who would make such a comment, and trying to differentiate between the two is complex at best, impossible at worst.

The first investor knows the industry, the competition, the existing products, and understands the business idea you’re proposing. He’s looked at how it compares to the current offerings, and has made an educated guess as to how the target market will respond. He’s factored in changes in the nature of the market itself – in this case, it’s age-specific, so understanding the generation that will be targeted to adopt the product is a key requirement to being able to project the business’ performance.

Once all this has been taken into consideration, this investor feels that the adoption rate will not be high, the product will not redefine the market as a whole, and there will be stiff competition. It’s unlikely that the business will do much beyond turn into “yet another” player in the specified market.

The second investor is likewise well-educated in the industry, but is also looking at it from the perspective of his own generation. That is, he sees how his generation would react to such a product, and projects that thought onto the current market. With limited adoption by that generation, a generalization of how it might be adopted by other markets is created, resulting in the same conclusion.

The difference between the two types of investors is that the first has made a properly balanced argument for why the business will not be the next shining star. The second, however, has merely projected an attitude against a new business, whose market he does not really understand. When the advice comes from the second investor, it should be taken dubiously, since he clearly does not get it.

The problem, however, is how to tell the difference between the two. For that, you need to know the people involved, past investments they’ve made, and then make a judgement call based on that.

Related posts:

1. Competition is Healthy
2. Financial Planning and Advice
3. Get Some Skin in the Game

First Time in Business

If you are in business for the very first time, then what you need to do is go out and find some customers. No fancy business plan, no expensive incorporation, just a phone number or email address at which you can be reached. Reach out to your network, announce that you’re in business (explain what type of business you’re looking for), and ask people to send you leads.

What you are trying to do is get some momentum, and the simplest way to do that in the early days of a business is to find one person who will pay for what it is you have to offer.

One friend started his business with $500 in his pocket – he unpacked the coffee machine, pulled out a list of phone numbers for every person he knew, and started calling each to let them know he was in business. A few years later, he has several people working for him on a variety of projects, and has some idea about where he’s taking his business. But the start was informal – just a bunch of phone calls.

What it comes down to is networking to find one client. Once you have that one client, you can worry about determining where your business should go – taking legal steps to protect yourself, setting yourself up to be as tax friendly as possible, etc. The first step for someone in business for the first time is always networking.

Been There Before

If you are starting your second or later business, then the steps are different. Finding your first customer isn’t as important as figuring out what this business will do. You have to reflect on your previous business to determine, from a business perspective, how you can do better. In that case, a formal business plan might be wise – you may have the time to do this, and can afford to spend valuable time researching your target market, the industry, raising capital, etc.

The steps aren’t as clear here either – what was the end of your previous business that pushed you to start a new business? Would you call your previous venture a success? How would you apply the lessons learned there to your next venture?

These questions, and other related questions, need to be answered in order to determine your best approach to starting anew.

Summary

If it’s your first time in business, then don’t over-think it – just go out and find someone who will pay you to do the kind of work you want to be doing. If it’s not your first time, then reflect on your previous endeavors and figure out how to apply the lessons learned there to your next venture.

Related posts:

1. Documenting Business Plans
2. First Steps for a New Business
3. I Have a Great Idea – What Now?

I’m constantly reaching out to others, probing for information and strengthening ties.

Then I met the right person, and suddenly, I truly understood why I put in all this effort into growing and maintaining my network.

I’m jumping ahead of myself.

I’ve been consciously networking for a little over a year. When I went to my first event, I was excited about developing new relationships, and wrote an article describing the experience. Since then, I’ve attended several other networking events, and pretty soon, the novelty began to wear off. I still thought I understood why I was putting in the effort, but I wasn’t seeing the rewards. I started getting discouraged, that my efforts were for naught.

Perseverance is one of the keys.

Knowing what you’re looking for is another.

Fortunately for me, I did persevere, continuing to reach out despite not seeing the hoped for results. I wasn’t being called after each event with requests for my time. New clients were hearing about me from old clients. My referral network was strong, but my new network? Silent.

Then, late in 2009, I started getting contacted randomly from readers of my site. I then understood why it took so long to hear from them – it took almost a year to establish credibility. The comments of Chris Brogan and Julien Smith in their book Trust Agents (link to review) were started to set in.

My site was starting to pay off, but what about the hours spent on LinkedIn? What about the time spent meeting other consultants? When would those start to pay off?

I met Susan Varty, the most recent piece of the puzzle.

After being featured in the AdviceTap newsletter, Susan reached out to me to connect, and a few days later, we were sitting down to discuss our businesses over coffee. Susan is a writer, and as her site says, she helps you finish your writing projects. While her actual business has diversified from there, it still remains her core focus.

The conversation we had gave me a lot to think about, from adjusting my consulting rates (Susan felt that I could easily double my rates) to potential sources of new clients. As I left the meeting, though, I continued to think about what we had discussed – how our business constantly evolves, how we recognize new opportunities. Tied in with this was the work I’m doing for one of my clients, assisting in developing a complete technology infrastructure for his business, and which I had been mulling over for the last few days.

I put the two together, and am now working on a new direction for my business. I’m developing what I’ve tentatively called the Small Business Technology Kit which will contain the various hardware, software, systems and processes that small businesses need to grow and expand.

Susan provided me with the target market. Jeremy warned me about the limitations. Ron gave me a concrete example of the applications.

It was my network that provided all the pieces. I just put them together.

It took over a year to get the right set of connections to figure out where I want to take my business. It took people I met in a variety of places – family, friend, networking sites, events, bloggers. But when all the people were there, I knew what it was I was trying to find, and it appeared.

Sometimes the answer to what are you looking for? stays hidden until you find that something, and then you know that you were looking for that all along. But the sooner you recognize what you’re looking for, the easier the search will be.

Related posts:

1. The Right Time to Network
2. Networking – Your Personal Mafia Family
3. How do you Network?

Some people dream of success, while other people live to crush those dreams.

What I did last year was to post some of my professional resolutions for all to see. Whether or not that was a good idea is debatable. There is a study that shows that the more you share, the less likely you are to do. I don’t agree completely with that study, and so I’m going to do it again.

First, however, a follow-up to the goals for 2009:

• Only one of my contracts from the start of 2009 is still in development, and it is scheduled for completion with two weeks.
• I have not picked up one new contract per month, however, the past 3 months have been very good to me with 2 new clients and one returning client.
• I haven’t taken any courses this year, but am in the process of learning PHP and the Zend Framework.
• I have continued to use C# for some development, and am increasing my level of proficiency.

All in all, I feel good about what I’ve accomplished in 2009. While I haven’t met all my goals, I did strive to do so, and had I met all my goals, it would be an indication that I had not set my sights high enough. So, without further ado, here are my goals for 2010:

1. Learn PHP and Zend to a degree of proficiency whereby I can construct an entire website based on those technologies in a reasonable amount of time (i.e. in under 250 hours for a fully-functional site, and not including the design of the interface).
2. Launch the product I’m currently working on, Client Data Tracker, to beta in January 2010 and live to the public before the end of March 2010.
3. Continue developing my consulting to the point that I am putting in 30+ hours per week in billable time on various projects.
4. Complete the work required for KNIRL.COM and get the site up and running.

These are my goals that I’ll be using to measure my success against in 2010. What are your goals? How do you intend to measure success?

Related posts:

1. Goals for 2011
2. Goals and Fitness
3. 2009 Goals

It isn’t easy to tell a potential customer that their ideas are terrible, or to try and make them modify their concepts in order to allow them to work better online.
Part of that is that developers and designers are by nature creative people, and we don’t like raining on somebody’s parade.
Part of it is also the risk of losing a possible customer.

This triggered a brief discussion in the comments about how to learn the skills required for dealing with [potential] clients. It’s not something covered as part of a standard degree in Computer Science or the like. It’s not part of a certification in web development for most colleges. As a result, many would-be web developers working for themselves fall into one of the following two categories:

Customer Management Chart

1. They treat the client’s opinions and ideas like gold, and implement them regardless of whether or not it’s a good idea. While this is good for getting work, it’s not good for developing a business, as you end up spending too much time dealing with the whims of ill-informed clients. This prevents you from developing your business of building quality websites that fill real needs. In the end, your clients are not happy because the site doesn’t live up to their expectations (regardless of whether those expectations were reasonable) and you end up losing the client.
2. You build what you like building, or what you think is a good idea, and if the client likes it, that’s great, and if not, they can go bother someone else. I don’t think this method needs much explanation as to why it’s a bad idea.

What’s needed here is to find a good balance between the two extremes, a sprinkle of tact, and some of your business experience.

Evaluate what your [potential] client is proposing, and try to figure out what the client is trying to achieve. Then confirm your guess with the client. For example, the client talks about creating a blog where every web developer in the world will spend all their time (not going to happen). But what the client really wants is a way to market their new product for web developers.

Now, rather than putting down the idea completely, gather some facts about what the client is trying to do, and what they’re trying to achieve. For example, you might collect some articles about how many web developers have A.D.D. or the fact that there are thousands of sites out there for developers, and the largest such site only has 200K members. Get some examples of how similar products are marketed (e.g. show Eclipse vs. Rational Application Developer for a Java IDE) and what their numbers look like. Try to gather as many quantifiable facts as you are able.

Next, present an alternative to the client, from the perspective of someone who understands what they are trying to achieve. “In order to market your software using various social media platforms, how about we run through some options, and what some companies which are similar to yours are doing.”

There, you’ve said it – what you’re trying to do (market software), there will be choices (some options), and where they came from (other companies). Now, outline the ideas clearly, and demonstrate the breadth and depth of your knowledge by having answers ready for common questions to each option. Don’t show off, just be knowledgeable, and if you don’t know, ask: “Can I get back to you on that?”

Knowledge is Precious

Not every client is reasonable, but then again, not every client is yours. The key here is not to attack their ideas, but to understand where they are coming from. Why did they choose you for the project? It’s because you know more than they do about how to do it. Share your expertise, use your special knowledge. Make sure your opinions are clearly delineated from the facts.

At the end of the day, you may be able to reason with your [potential] client and land a project that is a good idea, that’s well structured, and balanced.

Some [potential] clients will still insist on a bad idea, despite your feedback. However, you’ve already told them it’s a bad idea, just not in those words. You’ve outlined what they’re trying to do, and you got that right. You’ve outlined some real options that would reach that goal, and they’ve been turned down. What now?

Now you need to look at your business, and the impact accepting this client, and their bad idea, will have on the rest of your business. Will it help improve cash flow because it’s a short project (i.e. high profit margin for minimal resources)? Will this client refer you future business, thus making this a strategic move? Is this a client who has other projects with you, thereby putting pressure of losing other contracts?

Or will this project keep you busy, stressed out, and prevent you from pursuing better clients who will help your business reach its goals?

The answer to these questions will help you determine if you should be accepting or rejecting the bad idea. (Note that while you may refuse the project, treat the client with respect, and you may end up with a valuable connection as a result.)

Related posts:

1. The Customer is Always Right… Sometimes
2. Slow Economy and Developing a New Business
3. Customer Satisfaction

Before going any further, one thing needs to be clarified. I was asking the original question for a particular reason, and it was not so that I could write this article. I’m planning on attending a speed networking event next week, in which participants are seated at tables with five other people and get two minutes to make an introduction. The last time I attended, before anyone spoke, I had 5 cards in front of me, one from each person. After the introductions, however, I only really saw value in 2 or 3 of the connections.

The second half of the issue is that I did, at that event, reciprocate the handing out of my card. I ended up on 3 distribution lists as a result, and it took a while to get taken off one of those. All three people who put me on their mailing lists had something in common – they were all mutual fund salesmen. The question I was trying to get answered was whether I could [politely] refuse to give my card to the mutual fund salesmen at the next event.

I got many answers to my question, some of which addressed my concerns, others which seemed to ignore that aspect of the question. However, I did learn a few things about such events, and the ramifications of sharing a card.

1. Speed networking events are of limited value, because, while they allow you to meet many people in rapid succession, they often do not allow you to establish a solid connection with any one person.
2. Given then I will be attending this event (although this may be my last such event), sharing my card is considered to be a necessity. That is, I cannot politely decline to share my card with any one person or group of people.
3. I can control when to share my card – I can wait until it’s my turn to introduce, thus linking my card to my introduction.
4. I can make mention that I do not wish to be placed on any distribution lists – while I welcome networking opportunities, please keep my e-mail off any type of mailing list you may have.
5. When receiving cards, make notes on the back regarding the person who gave me the card, and any other information that may be relevant.
6. You never know where your next successful connection will come from, so don’t try to guess. Instead, hand your care to anyone who will take it, but always include a brief summary of what it is you do, and what it is you’re looking for.

What do you think about sharing your card? What value can you find is such events?

Related posts:

1. Preparing to Attend a Networking Event
2. Post Parnasa Fest Toronto II
3. How do you Network?

The book, according to its back cover, claimed to provide all the answers to build a successful web startup. Joel Spolsky, in his foreword, claimed he learned something new on every page (there are over 400 pages in the book, which works out to about 5 cents per lesson. Considering I’m in the middle of developing two ideas into potential businesses, I figured this was the book for me.

I’m now reaching the end of the first quarter of the book, and already I’ve learned enough to write a review. The book was worth the money spent, even were I to read no further. So far, I’ve learned something about the history of creating software companies, the various ways there are to start a company, and what the pros and cons of each are. I’ve learned some questions to ask myself when looking at a potential idea. I’ve learned to be critical of my own initiatives, and to separate emotion from keeping ideas alive long after they should have died.

Bob mixes his lessons with interviews with various people. Don Dodge, Director of Business Development at Microsoft, discusses the differences between starting a company now versus starting one ten or twenty years ago. Rick Chapman of Softletter discusses the business model of Software as a Service and various billing systems used. These are just a few of the many (I counted 36, but I might be off by a few) interviews and e-mail exchanges recounted throughout the book.

The book is divided into 10 chapters, each of which focuses on another idea crucial to the success of a web startup. The first chapter looks at the history, which has shaped how such companies are built today. The next chapter focuses on the ideas that build your company – filling a need (and where those needs come from), having a new way to solve an old problem. The third chapter looks at platforms, and the various places you can put your idea (SaaS, PaaS, Mobile, and so on).

The fourth chapter discusses support groups and tools for founders. The fifth looks at money and financing. The sixth looks at how social media impacts your business (and it does, whether you realize it or not). The seventh chapter discusses the importance of clarity in your business. Chapter eight is about how to get all the pieces in place, and how to turn an idea into a business.

Chapter nine suggests several people you should listen to, who provide advice that can be invaluable to a new business. Chapter ten is all about where to go from here, now that you’ve read the book.

I’m not done the book, as I pointed out above. But Bob manages to deliver his points about starting a business in simple language, with relevant examples scattered throughout the book.

If you are thinking about starting a company, or already have, which has as its business model the sale or distribution of software, whether you’re a site that facilitates the use of a service, or selling desktop software directly, this book is for you.

Oh, and I did find a book on PHP – it was called PHP, MySQL, and JavaScript by Robin Nixon, and seems to be quite a good book as well. So now I’m two for two on Friday’s book purchases.

Related posts:

1. Book Review – Once You’re Lucky, Twice You’re Good
2. Book Review – Trust Agents
3. A Novel Idea

One answer is that our online networks tend to be a lot more widespread than our in person networks, including a lot more people. However, when we connect with someone in person, we tend to create a stronger link on an individual basis.

What do you think are some of the differences between online and face-to-face networking?

Related posts:

1. Preparing to Attend a Networking Event
2. How do you Network?
3. Using LinkedIn Effectively

For starters, I work as a Programmer Analyst for the Dominion of Canada General Insurance Company. This occupies me from 9 to 5, and occasionally beyond.

I am also the acting treasurer for my synagogue, handling the recording of pledges, collections, receipts, budget, and so on, as well as maintaining their website.

Third, I do occasional consulting for small and medium sized businesses on the appropriate use of technology and for the development of custom software packages.

Fourth, I am in the middle of developing two websites for launching in the first quarter of next year.

Fifth, I read an fair bit, from books to newspapers, magazines, blogs, and pretty much any form of writing that will stay still long enough. That reading is what provides the content for my two blogs, which is what I spend about an hour every two days working on.

Of course, I spend some time each day with my family, during which business is put on hold.

Related posts:

1. Business Research in Canada
2. Business and Social Media – Part 2
3. Business and Social Media – Part 1

Related posts:

1. Email Overload and Prompt Replies
2. New Edition of Site Published
3. Business and Social Media – Part 2

I have also been reading several questions on a variety of sites posed by people in a similar situation to myself – they have an idea, but no money to bring it to fruition in the real world. The questions tend to focus on team building and raising capital. The questions also indicate a lack of information on the process by which many start-ups have become successful. I am fortunate to be working with a colleague who has past experience in this field, and has been guiding me as I develop my own idea into a profitable business.

In light of the information I now have, I thought I would put up a basic checklist of steps to go through when developing a new product or service:

1. You think of a new idea for a product or service, so you write it down. Talk it over with someone else (be careful about confidentiality, and have that person sign an NDA if you think it is warranted) to make sure that you get an objective opinion about your idea.
2. Write down a short description of your idea. Explain what it is, who wants it, and who will pay for it. Do some basic market research to figure out what alternatives are currently available, and how much they are charging. What are people saying about your [potential] competitors? Briefly describe the business model for your new business (how will your business generate revenue). The entire description as outlined here can be short, perhaps a mere page or two.
3. Figure out what it will take to build your product or develop your service. Determine what the bare minimum is that you will need. Remember that if you believe in your idea, you should be prepared to take a risk, in that you will not be getting paid until your idea earns money. You don’t need a fancy office, or top-of-the-line equipment from day 1. This can be ramped up later. Work from your home on the old Pentium 2 that you never bothered throwing out. Buy equipment used when you need to.
   You need to remember that anyone investing in your idea will expect you to be responsible with the money, to save it when you can, and shop around for the best prices. You need to keep accurate records of your expenses and revenues. If you need some expertise that you personally don’t have (i.e. to hire someone) see if you can trade them equity to help you with the work, or accept a deferred payment.
4. Start building the product. Start writing a business plan (this can take over 100 hours to complete, and you will need it if you look to borrow money from the bank, or talk to an angel investor).
5. When you reach the point at which you need outside funds (for example, you have a legal bill for $5000 to incorporate your business and to handle your copyrights and patents, plus a $25,000 bill for equipment that is absolutely required, plus a $15,000 bill for marketing about to be incurred), figure out how much money you absolutely need, and add 20% as a contingency. Then use the following guideline to figure out who to talk to:
   • $0 – $50K: Talk to your bank, family, friends. Can you get a loan, or a line of credit? This will likely be the easiest and most cost-effective way to raise these funds. Beware of mixing family and business when borrowing from friends and family, though. You will be really unpopular if you borrow money from a friend and then your business collapses.
   • $50K – $500K: Look for an angel investor. You will have to give up equity in your business for this, and be prepared to have someone looking over your shoulder constantly to see how you’re spending the money. Also remember that this is the first round of investing. If you give up too high a stake in your company at this stage, you may face difficulties later on when trying to raise more money.
   • $500K+: You have entered the world of venture capital, and will need to read more detailed information on how to work with a VC. There are many excellent resources available online for the uninitiated.
6. Now that you have the money you need, finish the development, launch your product or service, and market it. Initially, take the revenues earned (all of them) and use them to develop your idea further, to improve your product, to increase your visibility in the market. Once you have a steady revenue stream, you can then think about hiring yourself to do more work on the idea, paying out a divided (which implies profitability) or upgrading your public appearance with fancy offices. However, before you do that, if you owe money for a loan or line of credit, make sure you pay that back first.

By no means are these steps to be taken as a bible. However, you may find this useful if you are thinking about starting your own business, or have an idea that you think might be viable as a means of earning money.

Related posts:

1. Clever idea… but are you the first?
2. It’s a Good Idea, Now What?
3. Slow Economy and Developing a New Business

I apologize in advance for what is about to happen. I’m going to be separated from the internet for about 10 days. So if you post a comment, it may take until I get back for me to respond. However, I will respond when I get back.

Recap

When I left off the series, our model business owner, Jane, had started a blog which she uses to hold directed conversations with her readers. She has also started a Twitter account which she uses to post news and links to her articles, and uses the account to see what topics are of interest to people, and then writing about those topics.

Facebook

The largest problem with blogging and Twitter is that conversations are generally one-sided. Jane acan pick a topic to discuss, and interact with her audience regarding those topics. Using Twitter, she can respond to short questions. What she cannot do (yet) is allow her audience to pose its own questions, to hold undirected conversations.

This is where the networking sites such as Facebook and Linked In become important. Both these sites allow groups to be created. The creator of the group can act as an administrator of the group, and encourage conversation and participation among the group’s members. However, each member can start a new conversation, a new discussion, on a variety of topics. They can ask questions.

This will put Jane back to the first stages of becoming involved in social media, in which she interacts directly with her audience, as a member of the audience, but now Jane is in control of the environment. She can market the sites to people who come to her store. She can start getting feedback from her customers on topics she didn’t realize were issues.

Conclusion

Social media is about personal interactions used as a means of promotion. The fundamental component of social media is interactions. Social media is built on socializing. In order to run a successful campaign, you must interact with your audience – respond to their questions and comments, start conversations, ask questions of your own. Everything else is merely a tool to help you interact.

Related posts:

1. Business and Social Media – Part 2
2. Business and Social Media – Part 3
3. Business and Social Media – Part 1

Reading contracts and agreements can be like that. There are lots of sections, paragraphs, and clauses outlining the details of the document. The agreement is intended to sound great for all parties involved. But your gut keeps asking to figure out what the catch is, but you don’t see it.

Enter the lawyer. He or she has read and written many contracts, and can turn the confusing legal language into plain English for you. Based on their experience, they can point out to you what it is about the arrangement that it problematic. They can also tell you what to expect from the agreement as a result of the content of the contract.

Legal bills are expensive, and therefore, many small business owners will try to avoid making use of one. However, while retaining a lawyer may be expensive, be sure you know the phone number of one you can call before you sign anything. It may cost you $500 to make that call and get their opinion, but the risk you face by not doing so is to enter into an agreement that will cost you far in excess of that $500 insurance policy.

If funds are truly an issue, at a minimum, find a lawyer fresh out of school who may be willing to consult for a lower fee. While you will be giving up the experience that a more seasoned lawyer would bring to the table, you would still be sure that you understood the general content of the agreement.

Related posts:

1. A Preferencial NDA Clause
2. The Customer is Always Right… Sometimes
3. Contract Work and Contracts

Note that any clients referred to in these articles are fictitious, unless I specifically indicate otherwise.

Applying the Concepts

The client described in the first post in this series can make good use of the previous article as she develops her strategy. Social Media is built around interactions, so Jane must decide what kind of interactions she would like to foster. She must also look at how each platform is constructed, so that she can play to its strengths.

The Blog

The first step for most businesses starting with social media is to write a blog. If the client is technically adept, they can follow the instructions here on how to set up a WordPress blog on their own site. If not, they can hire someone to set up the site for them. (If you are looking for someone to set up a blog for you, please contact me directly and I can refer you to a reputable company that does this for a minimal fee.)

Before going live with the blog, there are a few things Jane needs to do.

1. Choose a topic for the blog. As the owner of a hardware store, she may feel comfortable writing articles about how to fix some common problems around the house on a tight budget. The title and sub-line for the blog should reflect the topic chosen.
2. Set a schedule for posting. More important than posting frequently is to post on a regular schedule. It is tempting to post each article as soon as it is written, but that may end up causing the blog to die quickly, as the speed of your writing drops. My usual recommendation is to start with one article per week, posted in the afternoon of Tuesday or Thursday. As the number of viewers of the blog grows, the frequency of publishing can be increased to twice a week, then three times a week.
3. Prepare some articles. While Jane has selected a topic that she feels confident she can write about, she does not know how much time she will have available for writing. She should prepare about 3 months of articles (if she’s publishing once per week, that works out to 12-15 articles) and upload them to the site in draft mode.

At this point, Jane can launch her blog. Some companies (including the one I recommend) can do some preliminary advertising for her to increase the number of viewers quickly. Other plugins for Search Engine Optimization (SEO) can be installed so that new posts are automatically submitted to various search engines. Certain types of content will result in Google scanning the page earlier. A reputable company will help to explain and set up these components.

Jane should also be sure to monitor the number of viewers to the site, and respond to comments on her posts. Writing the article is only the first step – interacting with her readers is more important. While it may take time to convert a reader to a client, if she does not interact at all with her readers, then her blog is merely another form of traditional media.

Jane must also remember to tell people about her blog, and ask for feedback. A sign in her store can drive her existing customers to the site, and they can tell her, in person, what they like and don’t like about the blog. She can ask them for ideas for articles and for suggestions on how to improve her existing articles. They may tell their family and friends about the site. If Jane can establish her credibility as an expert on the blog, then people will be more inclined to come to her store when they need something, or need advice on her area of expertise.

Tweets – Part 1

Now that Jane has her blog up and running, she may want to create her first Twitter account. With this account, she can post links to articles on her blog, talk about those articles, and create an additional community of people interested in those topics. Using various tools discussed in a future article, she can analyze what people are talking about, and write relevant articles on those topics. With this Twitter account, Jane is trying to attract more readers to her blog, to increase the amount of attention on her writing.

What’s Next

In the next article, I will be discussing other uses of Twitter beyond driving traffic to a blog, and the benefits to creating a page on a social media platform such as Facebook.

Related posts:

1. Business and Social Media – Part 4
2. Business and Social Media – Part 2
3. Business and Social Media – Part 1

Note that any clients referred to in these articles are fictitious, unless I specifically indicate otherwise.

The Tools of Social Media

Social media requires, as a fundamental component, the ability for people to interact. Therefore, any tool claiming to be a part of the world of social media must include interactions between the provider and the audience. Each tool will therefore include one or more of the following components:

1. Comments – the ability for the audience to publicly reply to some statement
2. Forums – the ability for the audience to create a statement and then provide feedback
3. Messaging – the ability for people to communicate in real time

Looking at some of the common tools of social media, it is easy to see how they are making use of at least one of these components.

Blogs

Blogs, such as this one, allow their audience to provide feedback on any given article. In this manner, the provider can post a message of arbitrary length, and the audience can then provide feedback.

The distribution of information is weighed strongly in favor of the provider, as they usually retain the ability to edit or select responses to be posted. (As an aside, I do not edit comments to this blog, and only refuse to post those comments which can clearly be seen to be spam.) The provider can control the topic of discussion to some extent, and can choose to incorporate the opinions of the audience in future posts.

Twitter

A form of micro-blogging in which each post is limited to 140 character, Twitter allows its users to post short messages. Conversations can be held by tagging posts, or marking a post as a reply to another user (via the # and @ tags).

Facebook (and other social networking sites)

A page can be created on a social networking site, providing an online location for people with a common interest to congregate. Interactions are usually via a message board, although private messaging is usually available as well. In the example of Facebook, targeted conversations can be created as well using forums.

What’s Next

In the next article, I will be providing an explanation of how the sample client, Jane, can make use of each of these tools to promote her business, and what some of the other tools she may want to make use of to facilitate her use of these forms of social media.

Related posts:

1. Business and Social Media – Part 4
2. Business and Social Media – Part 1
3. Business and Social Media – Part 3

Note that any clients referred to in these articles are fictitious, unless I specifically indicate otherwise.

The Client

Harvey’s Hardware is a small store located on the corner of a busy intersection in a residential neighborhood. The original owner, Harvey, has retired, and the store has been sold to Jane. Jane has an MBA from a prestigious school, and is interested in running her own business after spending over 20 years working for a large multi-national corporation. She bought the hardware store using funds she has saved, and spent the first year after the sale becoming familiar with the store and its clients.

Jane is not technically illiterate, but her use of technology is limited to word processing and checking her e-mail. She is comfortable with her inventory management software.

Recently, a few of her customers asked if she had a website for her store, to which she had to answer no. However, she is interested in creating an online presence, and has heard about social media and would like to become involved.

The Problem:

The real problem, in this case, is that Jane does not understand what social media is, nor how it can be used to help her store grow its customer base. Her first step, therefore, is to learn about social media, and how it compares to the more traditional forms of media with which she is already familiar.

The Background:

Social media, as defined by Wikipedia, is “…online content created by people using highly accessible and scalable publishing technologies… transforming people from content consumers into content producers”. In other words, social media makes use of the internet as a dstribution medium and is based on interactions between people, rather than simply delivering information.

Traditional media including newspapers, radio, and television, are based on information delivery. Information is collected and converted into a message, which is then broadcast to the audience. The audience may be able to provide responses to that information, but those responses are delayed, such as the letters section of a newspaper. Additionally, distributors of traditional media are faced with large expenses in creating and delivering the content.

Social media, on the other hand, relies on the audience itself to both create and distribute information. This has the benefit of incorporating feedback from the audience in the message itself, and in reducing the cost of distribution to a negligible amount.

The downside, however, is directly tied into the benefits. Traditional media, such as newspapers, go to great expense to distinguish fact from opinion, and to verify any facts to the best of their ability. This results in a quality of information that is difficult to find in social media. Since the control over information in social media is distributed among the audience, it is nearly impossible to ensure that all the facts will be accurate.

Another key difference between social media and traditional media is as follows. In traditional media, the creation and delivery of content is where the majority of the effort is. Social media, however, requires more work in following up on content than in the creation or delivery. This form of media bases its distribution on interactions – the more interactions there are, the more successful the distribution will be.

What’s Next:

In the next article, to be published on August 14, I will be giving an overview of some of the tools of social media, and how to use them successfully.

Related posts:

1. Business and Social Media – Part 2
2. Business and Social Media – Part 4
3. Business and Social Media – Part 3

1. Initial consult with a business: I meet with a business and determine what their target market is, and what kind of effort they are willing to put in to capture that market.
2. Goal setting: We determine what the objectives of the venture into social media is – sales from the website, drive traffic into the store, provide more information, etc. We also determine how to measure the success of the venture using specific metrics.
3. Background research: I investigate what similar businesses, both locally and around the world, are doing in terms of social media – which aspects of social media are being used, and what are they being used for.
4. Brainstorming: I come up with ideas of how social media could be used to bring the business to the attention of their target market.
5. Strategy Planning: I develop a plan to make use of the ideas generated in the brainstorming stage, and how each idea will work with the others, and the existing business model, to increase the visibility of the business in the target market.
6. Implementation: We take the plan created in the previous step, and implement it, while measuring the changes according to the terms defined in the second stage.

The hardest part, I have found, is coming up with new ways to make use of social media. Everyone wants to be on the cutting edge, and doing something different. What is key here is to see the ways innovation is changing the digital world, and how that can be harnessed for a particular business.

Related posts:

1. Business and Social Media – Part 4
2. Business and Social Media – Part 3
3. Business and Social Media – Part 2

“Is a recession, or slow economy, a good time to start a new business, and why?”

Before you attempt to beat the odds, be sure you could survive the odds beating you.

The first point to consider is illustrated in the image to the right. Starting a business is a risk, and you must first evaluate whether or not it is a risk worth taking.

Take, for example, an employee for a company who has fairly good job stability, a small reserve of funds in case he is laid off, and some money put aside for retirement savings in an RRSP. He is presented with an idea for which he has the necessary skills to turn into a successful business. However, in order for him to work on the project, he must quit his job so that he can devote all of his energy to developing the idea.

I will not attempt to answer the question as to whether or not he should quit his job. However, there are a few questions that the candidate should consider. Can he afford to quit his job? How hard will it be, should this idea be a flop, for him to find another job? Can his life tolerate the additional risk of working for himself.

Once he knows the answers to these questions, in addition to those questions which reflect his interest in the idea, he can make an educated decision as to whether or not he should take the risk. It should be noted, however, that in a slow economy, the likelihood of being able to find another job, should this business flop, is drastically lower than in a fast economy.

From a business point of view, someone who is starting his own business (that is to say, he has answered the previous question such that he decides to quit his job) will find that a slow economy makes for easy growth. Costs are reduced in such an economy, and being able to find cost-efficient ways of growing a business will be significantly easier. Operating costs will therefore be lower, and while larger companies use a slow economy to consolidate their operations, smaller companies can take the opportunity to absorb the cuts from their larger competitors.

The economy, in moving out of a recession, will benefit the bold. Those who used the time to perfect their product, to gain a foothold in the market, or to streamline their operations, will be far ahead of those who merely tried to cut costs and survive until the end. Such companies will find themselves struggling to catch up to those who innovated over the past year(s).

If you want to be on the leading edge of innovation, there is no easier time to get there than when the competition for the edge is relaxed.

Related posts:

1. Top Reasons to Work From Home and Make It Work
2. Business and Social Media – Part 4
3. Motivating Employees

A successful site will begin its existence as a concept. The designer, or creator of the site has an idea – wouldn’t it be great if there was a site that could provide this service or maybe something along the lines of I can’t stand using this website, but I need the service they offer, and there isn’t a good alternative. Many ideas reach this stage, and a few make it further.

During the next stage, the concept becomes more solid. For example, details of the service could be outlined, or the creator lists out the specific issues they have with a particular site. This part of the process can take minutes, hours, days, or years. The end result, however, is a description of a need, and how it will be filled. (Note that this is not specific to a website, it is the same rule that applies to any business.)

Finally, list in hand, general specifications outlined, the creator approaches the people who can turn the idea into something more concrete, and the work commences. Creation has been reached.

The reason I outline this is because some people do not understand the difference between the first stage (I hate using site qrt.com) and the stage where development can begin. Going to a developer and saying build me a site like qrt.com, but better will not become a success unless you can also specify what it is about qrt.com that you don’t like, and what special features you will offer as an improvement over the competition.

Related posts:

1. From Idea to Capitalization
2. Venture into Social Media
3. Slow Economy and Developing a New Business

Read through the pitch before posting it, and tweak it if necessary. You can then use this pitch verbally, as a signature to all of your e-mails, or on your website.

I’d be interested in seeing what you come up with – post your pitch as a comment to this post!

Related posts:

1. Business and Social Media – Part 3
2. Email Overload and Prompt Replies
3. Business and Social Media – Part 1