VC in DC

Some nice PR for LivingSocial in Austin, TX

Great story by a local TV station on LivingSocial Daily Deal.

Here is an earlier blog post on LivingSocial and Crowdsourcing

Time for some Asymmetric Marketing

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I was speaking with someone over this past weekend and shared that I blog on a regular basis.   I described that I try to give "practical advice" related to start ups, financing and growing a business.  The response was a question, "Don't people need impractical advice more?" like alternative ways to market, sell, raise money, etc....

My interpretation of "alternative" advice was what to do when you lack the money and manpower to accomplish what you need to for your small enterprise to grow.    And if there is a single good area for alternative advice, it is the use of asymmetric (guerrilla) marketing by a start up at a trade show.

Here's the scenario, you want to make a big splash at an upcoming industry trade show.  You have little to no money to do so.   You cannot afford trade show space and you don't own a booth even if you could get the space.  It is nonetheless critical for the company to join the fray and get in front of potential customers.   

I have done this with everything from stickers on escalator hand belts ($50) , to posters in trade show elevators ($250) , to hotel key cards with my logo in the trade show's main hotel ($250), to rogue banners hanging from the hotel across the street ($500), to college acting groups staging fake demonstrations dressed as hippies outside main venues of trade show evening events demanding access to my product ($500).  More on these in a minute.  If you're ready to make a splash, ok with people getting a little angry with you, and capable of a stunt or two.  Well here's the plan, and you may just have a lot of fun.   I always did........

1.    Understand the physical geography

Weeks or months prior to the targeted show, go to the trade show venue, surrounding hotels and any known venues for evening events.  Get a grasp on where people will walk, pick up buses, catch cabs, have lunch and meet for drinks.  Know the lay of the land literally.  I know this costs money but it is the fundamental first step.  Meet the bell captain in your target hotels.  Say hello to the head of housekeeping.  Talk with the convention center and hotel staff responsible for handling the trade show organizer.

2.    Determine which real estate and assets the trade show controls

This means everything from key cards in convention hotels to trade show venue itself.   By key cards, I mean the hotel keys one receives when checking in to the hotel.  They are cheap to have printed and generally a hotel will accept your logo'd key cards for usage at a convention for a small fee (as low as $250 or you may get it for free).   Hotels across the street or around the corner, where many trade show attendees will stay,  but are outside the trade show's control are key targets.  Will the trade show provide T-Shirts, Hats or Buttons to any housekeeping, front desk or bell staff?   Does the hotel have an internal video channel running on the hotel's TV's?   Find out what assets exist.  

3.    Get a sense of the rules

Some trade shows, usually mature, larger ones, have a great deal of staff and do a good job of controlling the assets you seek to leverage over a couple of days.  To the degree you can, without tipping your hand, get a handle on these rules. 

4.     Understand that you will need 4 to 7 gambits

Sadly, some of your gambits will be spotted immediately and removed quickly.   Some will not as people can often mostly assume someone else authorized you to replace the hotel's regular coasters in the main bar with the ones with your logo.   All it really took was a tip to the bartender ($50) and your coasters ($125).  Also, your gambits need to be executed in close timing proximity to one another immediately prior to the trade show opening.   Think 4 or 5am on the day of opening.  As you soon be explaining that you didn't know it was wrong to place bumper stickers on the convention center's trash cans ($75), or put decals surrounding hotel elevator call button plates ($50), or decorate the hotel's fake plants with small hanging monkeys/birds/ornaments ($125) or place logo'd doormats outside the convention center's doors ($500) or tape posters in key locations in the rest rooms ($150) or put logo'd toiletry baskets in those same convention center restrooms ($250).   Some of your soldiers won't make it off the beach and you should expect some losses.

That you did all of that as well put large buttons on the hotel maids ($100 tip/$100 buttons), desk staff and T-Shirts on the bell staff ($200 tips/$150 T-Shirts) when you weren't really allowed to do so, well, you should anticipate a stern conversation in which you demonstrate profound ignorance.  Won't do it again, you should say, not this year - not here.

5.    Hijack a little spotlight in a main event

Most trade shows will have a large evening event for entertainment and networking purposes.   Buses from main hotels to the event have bus drivers who might like to wear a new hat ($100 offered prize to bus driver spotted with it on - done very publicly - early on - as well as the price of the hats.).  Or my personal favorite, the college drama group staging an attention gathering event (as little as $300) outside the large, evening event venue.    They need the "freedom and power" your product provides and they are protesting its limited distribution (by trade show attendees).   To be clear, I would usually have to explain to the head of the college drama group that I wouldn't have a protest permit or anything like that.  If the police came to move along, be polite and get the hell out of there.   They were always cool with this.  And the police never came though the trade show people were usually plenty mad.  Then again, they would pick a public sidewalk which was visible from bus drop off but didn't impede traffic flow.

Another favorite spotlight stealing tactic is bring celebrity impersonators and a photographer with you to the event.  Elvis, Cher and Marilyn Monroe will work really well with a lot of folks.  If your show is in Las Vegas, they are plentiful and affordable (as low as $500 for evening per star).   Capture their emails so you can send the picture or put a button/lapel item on them associated with the picture process.  Or make sure Elvis has your hat on.

Later when you're successful and the company is progressing well, you will spend the $30k or $75k to do the trade show properly,  And, you'll likely look back on these shenanigans with a private smile.  I do. 

And when you get to spend all that money, you'll know which method generates the best results.

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Employee Stock Options: Key Definitions

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Here is a reasonably comprehensive set of definitions from Salary.com related to employee stock options.

Employee Stock Options: Terms and Definitions

One should also be familiar with Rule 144 from Securities Exchange Commission which relates to how stock options can be sold into a public market.   I will cover Rule 144 in a separate blog post.

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5 Pieces of good news you should ignore

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When you're running a company, one quickly becomes acquainted with the thought that everything matters.  That everything, every little detail, as it relates to the enterprise and its progression is important.  And in that, one is mostly but not completely right.

Some stuff doesn't matter or matter enough.  Perhaps, un-intuitively, the surprise is that most of the stuff that turns out not to matter is good news.  That is to say, positive events that don't translate into anything additive to the company's growth.

Here are 5 that come to mind:

1.    Positive local press

Here it is the Washington Post which is a prominent national publication.   And a great write up in it will certainly bring kudos from your Facebook friends.   Enjoy for a couple minutes and then get back to things that will grow the company.

2.    National TV appearance

Check the numbers on your favorite cable programs.  Unless those include Fox's Bill O'Reilly, large numbers of people aren't watching these shows.  And, even when they are watching, they are likely not interested in your product.  It is exciting and fun.  Just consider it a break from the daily routine.  You still have to concentrate on communicating your value proposition to probable suspects. 

3.    Product of Year from a Trade Pub

It is great fun to win and beat your competitors in a "head to head" appraisal.    Then again, if you take the same effort that goes into influencing one of these and apply to everyone who doesn't read the trade publication (>99% of the universe) -- it would have been a much better use of time.   Plus, there's always a competitive trade publication coming to a different answer and all the trade publication awards have a very short useful life.  So, as they say, fame and magazine awards are fleeting. 

4.    Trade Show Award

Do we really trust these folks?  Really?   If you have a big enough booth, you're entitled to the award for most innovative product or product of the year.  If you aren't profoundly suspect of these, take an afternoon off. 

5.    Calls from Large Company Bureaucrats

They are interested and enthusiastic but utterly powerless.  They are also meaningless in their own organizations but get to be giants within yours.  They call expressing powerful interest and you would be forgiven thinking about the potential positive impact.   Then again, you might have better things to do than give meaning to someone who has chosen to live a powerless life.  Many a small company will find itself turned on its head chasing a huge opportunity that is only the product of a bureaucrat's search for meaning.

I raise these 5 pieces of good news because they are often touted by the CEO's that pitch us as evidence that the company is really gaining traction.  Unfortunately, they frequently tend to indicate that the company won't gain traction because its management is chasing good news that would be better ignored.....

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Always, always, always talk to your angry customers

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When I ran companies my policy was the phone would always be answered by a person.  If a caller was angry or upset – in any way – all employees were instructed to say, “The CEO of our company wishes to speak with anyone who calls and is upset about our products, our services, or with anything about our company.  Could I transfer you to him now?”   

As you can guess, most callers said, “You’re darned right you can transfer me to the CEO.  He needs to deal with this problem now!” 

I took those calls.  Every single one – even if the call interrupted meetings.  (We never interrupted client meetings, though; if I was already with a customer I returned the call as soon as possible.)  I took those calls for years, and even some many were decidedly uncomfortable, what often surprised me was how much I could learn by listening to angry customers.  Over time I identified more employee problems as a result of those calls than I did by any other means. 

In short, our customers not only kept us in business – they also identified issues for me.

Here’s an example.  An angry customer is on the phone with a support person.  (Or, really, with any company employee; every employee who works for you is ultimately paid to help customers and make them happy.)   The customer said, “I spent a lot of money on this product… and it was delivered with a part missing.  I need that resolved immediately!” 

The employee said, “I understand the problem… but it will take a fair amount of time to resolve.  It’s now 4:45 and I get off at 5:00.  It will take more than fifteen minutes to resolve this issue; I think it’s best if you called us back tomorrow.” 

(I’m not making this up.)

The customer became angrier.  (Big surprise.)  Another employee overheard the call, stepped in, and had the call transferred to me.  I apologized on behalf of the company, determined the problem, brought in a more conscientious employee to help… together we made sure the missing part shipped overnight. 

Fortunately for me, but perhaps unfortunately for the original employee, they didn’t have to worry about getting off at 5:00, much less taking the call the next day.  I fired him.  Treat a customer that way once and you’ll surely do it again.  I considered myself lucky to learn about this problem employee when I did. 

At least 75% of the time simply by taking angry calls I would learn about employees who were inconsiderate to customers or vendors.  I couldn’t be everywhere.  I couldn’t see everything.  But dealing with angry customers increased my reach and vision dramatically.

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