Commentary

“Everything-but-the-Kitchen-Sink” Prairie

2008-11-07T22:48:00.013-06:00

What's in a Name?

“Silicon Prairie” was the old namesake for those attempting to promote the Midwest as a hotbed of innovative, original startup activity. Well, maybe 15 years hence, they got the easy part right—look around and there’s usually some Prairie. The problem is that the word Silicon is just too limiting for the exciting things that are happening here in the Midwest.

The Venture Reality Show

These comments come soon after attending the 2009 Venture Idol contest put on annually by the Venture Club of Indiana and the Indiana Economic Development Corporation. This is my second Venture Idol competition after semi-retiring here in the Midwest back from Silicon Valley with an interim stop in Dallas, Texas. One thing is clear after this year’s event; the competition is escalating. The collection of companies represented in this year’s event far exceeded the quality and maturity I observed last year. I don’t say this as a casual observer, as over the last week I have been able to have dinner and/or meet at the offices of many of the most promising companies in this year’s competition.

The first encounter was at the Venture Club luncheon held at the Indiana Historical Society. There at my table I crossed paths again with David Corcoran, CEO of TrustBearer Labs. David and his team are focused on extending high-integrity, multi-level security across a wide range of networks and devices at a value level not seen in other implementations. TrustBearer has made significant progress with a set of high profile customers and partners. Look for them to have a breakout year in 2009.

Two more early stage companies were at my table at the Indiana Entrepreneurial Awards at the Indiana Roof Ballroom and sponsored by Indiana University’s Kelly School of Business Johnson Center for Entrepreneurial Development and the Indiana Economic Development Corporation. The companies were both located in West Lafayette, with connections to Purdue University and located in their highly successful Purdue Research Park on the north side of town. The first company is Nanovis, represented at the Venture Idol competition by their COO, Matt Hedrick. Matt explained in layman’s terms how their nanostructured surface technology helps artificial joints and other implants integrate into the body’s tissue and bone structure. Their nanostructures give the normally smooth, metal surfaces of an implant the “look and feel” of the bone or other structure—innovative and beneficial to the patient and an initiative that could lead to enormous financial success for Nanovis. dinner held at the

The second company out of West Lafayette is much more hush-hush. The company name is Knowrtal (pronounced nohr-tl, like portal). As the name suggests they are building a social expert knowledge portal utilizing advanced artificial intelligence, correlation and sharing techniques seldom found outside the depths of the government intelligence agencies. The idea is that you can, via your profile, contribute advanced algorithms, spreadsheet macros, VB code, etc. into the social network and these individual tidbits of knowledge will be categorized, cross-correlated and combined so that over time the combined knowledge that a participant can extract in any expert field is exponentially greater than the sum of the tidbits. Granted, the concept is a somewhat hard to grasp, but most pioneering technologies are. It will be interesting to see how Knowrtal develops.

The Real Thing

The final example of the high quality startup companies located here in Indiana comes out of Greenwood, just south of Indianapolis. It was there, in a humble office, where I met with Jeff Ready, the CEO of Scale Computing. Jeff is one of the many Hoosier serial entrepreneurs, which after a couple of successes, decided to relocate back in the Midwest. Jeff and his team are split between Greenwood and San Carlos, California located on the northern border of Silicon Valley startup and, as can be expected from a seasoned team, they have lofty goals, not the least of which is to knock global storage king, EMC (revenue of $13.2B in ’07) from its throne. Now before you laugh, catch yourself as you are likely wrong. Scale Computing is using grid computing techniques to provide an incremental growth path utilizing low cost memory “bricks” at an end user cost that is 80% less than the nearest competitor. As is often the case, startups excel when they can catch a big company sleeping at the wheel. Let’s see if Scale Computing can pull it off; but as they say, “If I was a betting man…” proper. Jeff and his cohorts are now working on their third

And the Winner Is?

So a great stable of startups this year; but you know, the funny thing is that none of the above is my pick as #1. That is because the #1 slot goes to a company not in Indiana, but nearby in Champaign, Illinois. But that’s a subject for another posting

Until then, here’s to your (startup) business success!

Enhancing the Customer Experience

2008-03-09T00:02:00.004-06:00

Today’s experience

The best manufacturers and retailers do a great job at attracting the customer for the initial sale. But in measuring business results, the best way to enhance growth and profitability is by developing unwavering customer loyalty, i.e., strong repeat sales. One common way this is done is by building brand identity including superior product innovation, value and customer service.

What we find though is that customers somewhat expect a “courtship” before the sale but to establish consistent repeat business manufacturers and retailers alike would benefit from establishing a “cradle to grave” customer experience—drawing the consumer into the manufacturer’s world. And although this is typically done via newsletters, press releases industry magazine articles and the like. In the end these are one-sided, passive and random touches with the consumer versus an active experience.

A better way…

The manufacturer and retailer would do much better at establishing customer loyalty by visual and tactile stimulation that consistently reminds the consumer of the product experience. When a product is purchased there is a high level of excitement which quickly wanes after the product is built and in use over the first few weeks and months—especially after the product is boxed up and put in storage. The manufacturer needs to reinsert themselves on the back end of that build and first use experience, i.e., closer to “the grave”, to build that customer loyalty. One way to do that is through customer awards. Note that the term used was awards and not rewards. Reward programs have become increasingly popular over the past decade. We see that loyalty cards and points programs are increasingly ineffective at establishing customer loyalty. They have become so commonplace that they are now viewed much more as a bother than as a means to build brand loyalty and repeat business. So customer awards (not rewards)—how might this be done?

Just like a virgin…

Maybe it would be best to construct an example (we could use any brand-conscious retailer)… For instance Bass Pro Shops does a great job at attracting a fishing enthusiast (larger than life stores and displays), and consulting on the sale (tackle available to touch and feel, live simulated trout streams to test the product, knowledgeable sales personnel) which generally leads to a satisfactory buying experience. Then when you first try out your new purchase you have the anticipation, the excitement, the performance “edge”, and likely the beginners luck to go along with it and then of course, it becomes the greatest purchase you ever made! The real problem is that after that purchase and first use experience, the newness wears off. Excitement wanes. But for Bass Pro Shop to develop that long-term relationship with the sportsman, and as a means of establishing a repeat buyer, they must extend, and better yet relive that first use experience.

Maybe Bass Pro Shops could encourage its customers to share and brag about their experiences through an online forum? How about sharing pictures of that first “big catch”? Bass Pro Shops is used as an example, because, unlike most retailers they do the above already. But now, what if they could take that online interaction and build a full size, real-life “trophy” of their own? Upon purchase, Bass Pro Shop could deliver a replica of that prize fish on a plaque ready for mounting in the sportsman’s workshop. Of course, it would have a Bass Pro Shop logo in the bottom corner and every time one of the sportsman’s friends “drops by” they would ooh and ah over that fish and literally and/or subliminally see that Bass Pro Shop logo. Where do you think the fisherman’s friends will go to equip themselves for the next excursion? After so much positive reinforcement, where do you think the sportsman will plan, consult and buy his next rod, reel and complement of tackle? Bass Pro Shops of course. This is just one means of extending that customer experience, "bringing it home" to them everyday.

The grave is the cradle

So retailers, get creative in your customer engagements. Extend far beyond the capturing of the customer and winning that first purchase by helping them relive that first use experience and strive for creating a means for your customer to receive positive buy decision reinforcement. Drive your engagement with the customer into the “grave phase” of their experience with your product. Why? Because that “grave” is actually the “cradle” of future purchases—and so on, and so forth.

Venture Entertainment

2007-11-20T06:34:00.000-06:00

I have been remiss in commenting on an outstanding event that I attended back on November 8th at the Indiana Convention Center. This was a luncheon sponsored by the Indiana Economic Development Commission and Techpoint and was just one of the events included in the, now annual, Indiana Entrepreneur Week. I am a member of the Venture Club of Indiana and our normal Thursday luncheon meeting was combined, or should I say superseded by this event. To give you an idea of why I say outstanding, and more importantly, to give you a taste of what is going on here in the Midwest, and particularly in Indiana, with regard to entrepreneurial and venture activities, the event was projected to have an attendance of 350, which would have been considered a large event (outside of a Boston or Silicon Valley), yet in the end over 1,200 people showed up! Of course, it wasn’t just for the fare, although both the food and service were excellent and sincere kudos should go out to the folks at the Indiana Convention Center who responded admirably given the 400% overbooking, but the big draw was the keynote speaker, namely, Guy Kawasaki of original Apple McIntosh marketing fame and now principal at Garage Technology Ventures.

If you have heard Guy speak before, you know he is very engaging. And, as most good marketers, he can weave some wonderful stories. He did this admirably on this afternoon which resulted in the rapt attention of the audience. They knew they were getting something special as Guy is not often tapped to deliver his performance in America’s Heartland.

I have heard Guy speak before, a number of years back when living in California. I’d say my latest first impression is that, like most of us, over the years Guy has mellowed, become wiser, more humble. This perspective, and his humorous reflections on his former self, played well with the Midwest audience. Guy is a master at efficient use of PowerPoint. And the “Top 10” format used in this presentation was no exception. Each point was truly independent and made a statement. And for those of us that have really lived the Silicon Valley startup life, most were painfully accurate.

Just to highlight a couple of points, I’ll take the first two… His first point was “Make meaning.” In other words, if you are contemplating a new venture, whether it’s your first or your twentieth, do it for a deep down, significant and (hopefully) societally-significant reason. Don’t do it for money. Don’t do it for prestige. Don’t do it for ego. If you do it for any of the later, you will likely fail, and even if you do succeed in an economic sense, you won’t achieve real satisfaction.

His second point was “Make mantra.”—the three or four word “chant”; the beat that drives you and your people with purpose. He challenged all in the audience to drive to this minimal phrase and made light of corporate America’s feeble attempts at developing mission statements.

Make no mistake, this is good advice. Companies, even small startups, quickly begin to borrow from flawed corporate models. They start to think too much of themselves, as individuals and entities and layer mission statements and processes on top to protect their sensitive areas like so many bandages. Any aspiring new venture should fight against this tendency as it will likely lead to a death spiral. Once you give in to complexity as a cure all, it will be hard to pull up on the stick. And frankly we have an opportunity here in the Midwest, as venture investment and new business initiatives begin to accelerate, to never let this become part of our psyche. Just think… We may never have to unlearn the bad habits and, on average, be faster out of the gate than our coastal counterparts.

Well, those are a few highlights and teasers from the luncheon keynote. If you would like to see the whole presentation used by Guy Kawasaki, just email Mary-Louise at mary-louise@garage.com.

Before closing though, I did stick around for one other event, the Venture Idol competition. If you have never been to one of these events, you owe it to yourself to go. You will get a chance to see 20+ new ventures in a pressure situation giving their elevator speeches and highlight presentations as they compete for a $10,000 prize. It is run like American Idol with a panel of judges where most of the insight comes from the “thinking on the feet” displayed by the presenter when posed with the tough questions—all in all, a very enjoyable event. If you are an aspiring entrepreneur you learn from the experience of others, if you are an experienced startup professional, like me, you’re tempted to jump out of your seat and get up there and “perform”—a little bit of entertainment for everyone. It was all done in a playful spirit of competition, with no one’s feelings hurt too badly. The sponsors: Venture Club of Indiana, Techpoint, Indiana Venture Center and the 21st Century Fund, did a great job of making this a high quality, professional event.

What was most impressive that afternoon though, was the breadth of industries represented. Yes, you had a dominance of medical and advanced science ventures consistent with the Indiana corporate landscape (Lilly, Roche, Cook, etc.) and the Indiana University research arms dotting the state, but also a variety of garage and homegrown businesses following the profile often found on the West Coast. And then, even more telling, was the pedigree of the winner, First Precision, and their novel adaptation of 100-year old steel and metal production processes. But you know, reflecting now, it probably couldn’t be more appropriate—the perfect dovetailing of the old and new. A toast to the new! And, probably more importantly it is an indicator of the consistent support and superb startup environment being developed here in the State of Indiana—but more on this in another post…

Clinton Indiana Chamber of Commerce Best Practices Seminar

2007-11-07T19:20:00.000-06:00

Well, amazingly I was able to keep it on my calendar and attended the Success In Business--Best Practices from Local Businesses session put on by the Clinton, Indiana Chamber of Commerce last Tuesday night. Mostly I went there out of curiosity. Although Apex Consulting is a member of the Champaign County (Illinois) Chamber and the Terre Haute, Indiana Chamber, I had considered membership in other communities like Danville, Illinois and even the Indianapolis, Indiana Chamber of Commerce. Frankly, I didn't even know Clinton, Indiana had a Chamber of Commerce, but when it comes right down to it, there is only so much support and time to go around, so joining another Chamber is unlikely.

Anyway, the basis of the session, based on the subtitle above, was noble. The format was an introductory speaker who then turned into a moderator and interviewed four successive business persons. Unfortunately, as the session began with the introductory speaker disappointment looked inevitable as his pedantic, old-industry view seeped through on every slide point and comment. As the interviewing began he and the two successive guests bantered around their disappointment in the younger generations in the workforce and horrors of global competition. Yikes! I had deja vu as I thought I was back in my 1990's MBA classroom...

I was about ready to get up and walk out when the interviewer called up Doug Edge, the General Manager of Terre Haute radio station B102.7 and managing partner of Crossroads Communications, and local morning radio personality. About 30 seconds into the discussion, it became obvious that Doug "got it." An entrepreneur, who has started an number of business, he just happens to be in radio at this juncture in his life. While the interviewer asked canned questions, like, "Do you see satellite radio as a threat?", Doug tactfully, yet pointingly corrected him in saying that his competition was with other advertising mediums. For Doug, it's not a technology war, it is mind share war. Touche!

In fact, Doug took it even further saying that all his current plant--towers, transmitters, et. al. were, in 5 years so, going to be obsolete. When there is an IP radio in every car why do you need FM radio? You can tune it B102.7, or its equivalent wireless IP address, in Mattoon, Illinois or Moscow, Russia. How then does Doug compete? His answer was "By providing the best local content possible." What! Local Terre Haute, Indiana content in Russia? Is Doug's brain fried from playing music too loud in his headphones? Although the speaker may have thought so as Doug's comment went right over his head and, after a generic side remark, he went on to the next canned question...

But you know, Doug, is exactly right!!! You can see it all over. I call it globalocalization. For many years we have all floated away from each other becoming more separated, disconnected, isolated. First with television and video games, now Internet addiction. And in the past 3 years or so you see a big migration back, but a migration back using technology through social networks like Facebook, Linkedin and others, people grope for connections, inclusion--pulling back to a local circle wherever it can be found. So yes, people are globally interconnected with no geographic bounds, but socially seeking localization and community--globalocalization.

And you know, what? Doug and his stable of radio stations could aid in that endeavor by being the best at connecting people with his geographic, no matter if they are in Tokyo or Tallahasee. Where else can they be fed local basketball broadcasts and civic activities at all times, through their IP radios in their car, yes, but more likely on their B102.7 IP channel feed into their Bluetooth headset.

Yes, there will need to be changes... People will not be satisfied with the old radio when it becomes technology independent. It will have to be less one directional, more interactive, more SOCIAL. But maybe, just maybe with entrepreneurs like Doug Edge leading the charge, it may occur.

Kudos Doug! And thanks for making your 10 minutes of interview time worth my time last Tuesday night.