Crucial Communication Channels (Tool D-9)























At the core, every successful business venture looks like this. 

Of course, large complex organizations can look much more complicated than this basic diagram. But fundamentally, all successful business ventures consist of these key elements and have these critical paths of communications.

The "alphabetical" communication channels are external, between the key business venture teams and customers:

A] The Research & Development Team communicating with customers to determine what customer problems, needs, wants, and desire the venture should address

B] The Marketing Team communicating with customers to promote current venture solutions, product, services, and processes that solve current customer problems, and obtain feedback from customers relating to the performance of the venture in solving their problems

C] The Sales Team obtaining and processing orders from customers, and customer relationship management

D] The Operations Team building and delivering solutions, products, and services to fill customer orders

E] The Finance/Accounting Team collecting payment for the value delivered to customers by the products, services, and processes provided by the venture

F] The Venture Management Team soliciting feedback and inputs regarding the relationship between the customers and the venture

The "numbered" communication channels in Figure 5 are internal, the information being shared between departments in a business venture.

1] Marketing and Innovation Development Departments share information about customer problems, needs, wants, and desires, and the benefits, fit, form, function, and features of new products, services, and processes being created in the organization.

2] The Marketing and Sales Departments coordinate information about the benefits, fit, form, function, and features of currently available solutions, products, services, and process that match customer requirements, including the price of the offerings.

3] The Sales Department communicates information about customer orders to the Finance/Accounting Department such that the customer is properly billed when the solutions, products, and services are delivered.

4] The Sales Department communicates information about customer orders to the Operations Department such that the appropriate products and services are delivered to the customer.

5] The Operations Department communicates information about product and service delivery to the customer so the Finance/Accounting Department can accurately bill the customer.

6] The Research & Development Department (often called the Engineering Department) provides the Operations Department with bills of material and assembly instructions for creating the solutions, products, and services being sold to customers.

Venture Hypothesis Outline

  1. Title slide or page ... venture concept name, team members, 3-word concept summary
  2. Opportunity ... the problem, market research and analysis, first customer(s) beachhead
  3. Solution and venture concept ... products and services, competitive advantage
  4. Business model ... how the venture will earn money (or self-sustain)
  5. Marketing and sales strategies ... how the venture will attract and retain customers, tactical marketing
  6. Product development and operations strategies ... how the venture will develop and deliver solutions to customers
  7. Team and organization ... the current team and what do they do, advisors, team members to be added
  8. Risks and variations ... downside and upside risks, timeline, and tolerances
  9. Financial model ... estimate of units sold, average selling price, revenue, expenses, and EBITDA for first 5 years; key assumptions; significant startup expenses
  10. Validation plan ... how the hypothesis will be validated
2.03

Tips for Promotion

A way to attract attention to our venture is to choose an advertising or promotional medium that is unusual for our industry. Here are some ideas ...

Advertorials ... attention getters ... balloons ... billboards ... blog marketing ... brochures and pamphlets ... bulletin board signs ... bumper stickers ... bus and taxi ads ... bus bench/shelter signs ..
business breakfasts/lunches ... business cards ... business networking ... buttons ... calendars ... charitable contributions ... high profile ... charitable volunteerism ... city/regional magazine advertising ... classified advertising ... community involvement ... computer bulletin board ... computer data service ... consumer magazines ... contests ... co-op advertising ... customer newsletters ... decals ... demonstrations ... developing a sales slogan ... direct mail and sales letters ... direct mail with co-op advertising ... discount coupons ... discount premium books ... door hangers ... door-to-door canvassing ... drive-time radio ... employee events ... endorsements or promotion by famous personalities ... enthusiast magazines ... envelope stuffers ... envelope advertisement ... event sponsorship ... exterior building signs ... fliers and circulars ... folders and binders ... format radio ... free information ... free trials ... general business magazines ... gifts and premiums ... grand opening/anniversary celebrations ... greeting cards ... grocery store cart signs ... home parties ... hot air balloon ... Internet ... letterhead ... local business magazines ... local cable ... local newspapers ... local TV ... loudspeaker announcements ... magazine ... mailing labels ... major network TV ... membership in organizations ... messages pulled by airplane ... moving billboards on trucks ... mugs ... magnetic holders ... etc. ... multiple purchase offers ... national cable ... national newspapers ... news releases ... newsletters ... newspaper ad ... newspaper insert ... offer a reward for referrals ... on-line computer services ... package inserts ... packaging ... per-order/per-inquiry ads ... personal letters ... personal sales ... picket your establishment ... place mats ... point-of-purchase signs ... postcards ... price specials ... print advertising ... print on the box/container ... product exhibitions ... programs and yearbooks ... promotional plan chart ... proposals ... public relations and publicity ... radio advertising ... radio spots ... rebates ... referral incentives ... reminder advertising ... sales calls ... sales incentives ... sales tools ... samples of product ... search lights ... seminars ... free or low-cost ... send a thank you note after a new purchase ... share costs with event sponsors ... shopper classified newspapers ... sidewalk signs ... signs at sporting events ... signs on your building ... signs towed by airplanes ... skywriters ... special events ... special sales ... specialty items ... spokesperson ... sponsorship of charitable events sponsorships ... statement stuffers ... stickers ... symbols ... take-one racks ... talks and presentations ... tape or ribbon ... telemarketing ... telephone hold messages ... telephone pole signs ... television advertising ... television spots ... thank-you letters ... tie-ins with other products ... tours ... trade and technical magazines and newspapers ... trade fairs ... trade journal advertising ... t-shirts ... two-for-one offers ... vehicle signs ... video commercials in stores ... video tapes ... walking signs ... window signs ... and yellow page advertising ...

Bloom's Taxonomy

In 1956, Benjamin Bloom headed a group of educational psychologists who developed a classification of levels of intellectual behavior important in learning. Bloom found that over 95 % of the test questions students encounter require them to think only at the lowest possible level ... the recall of information.

Bloom identified six levels within the cognitive domain, from the simple recall or recognition of facts, as the lowest level, through increasingly more complex and abstract mental levels, to the highest order which is classified as evaluation. Verb examples that represent intellectual activity on each level are listed here ...
  1. Knowledge: arrange, define, duplicate, label, list, memorize, name, order, recognize, relate, recall, repeat, reproduce state.
  2. Comprehension: classify, describe, discuss, explain, express, identify, indicate, locate, recognize, report, restate, review, select, translate,
  3. Application: apply, choose, demonstrate, dramatize, employ, illustrate, interpret, operate, practice, schedule, sketch, solve, use, write.
  4. Analysis: analyze, appraise, calculate, categorize, compare, contrast, criticize, differentiate, discriminate, distinguish, examine, experiment, question, test.
  5. Synthesis: arrange, assemble, collect, compose, construct, create, design, develop, formulate, manage, organize, plan, prepare, propose, set up, write.
  6. Evaluation: appraise, argue, assess, attach, choose compare, defend estimate, judge, predict, rate, core, select, support, value, evaluate.

Why Ventures Fail

Addressed stagnant or decaying markets ... bad idea ... bad location ... bad luck ... bad management ... devaluation of assets ... disaster ... dishonesty ... dishonesty with self or partners ... excessive bad-debt losses ... excessive overhead expenses ... excessive use of credit ... excessive waste ... fraud ...
high interest payments ... improper balance between major company functions ... improper control systems ... improper market segmentation ... improper market testing ... improper price setting ... inability of spouse to accept the entrepreneur's drives and values ... inadequate financial analysis ... inadequate marketing analysis ... incompetence ... incomplete homework of the venture capital avenues ... incorrect sales forecasting ... ineffective control procedures ... ineffective customer interface ... ineffective direction ... ineffective planning ... lack of experience in the business area ... lack of fiscal responsibilities ... lack of leadership ... lack of managerial experience ... lack of organization ... lack of realization of the necessity to turn cash immediately ... lack of understanding of venture capitalist's goals ... management weaknesses and gaps ... neglect ... operational over-complexity ... over-inflated organizational structures ... over-staffing ... personal and domestic problems ... personal specifications in conflict with start-up's goals and objectives ... poor communications ... poor financial projections ... poor market gap analysis ... poor psychological work environment ... poor retail locations ... poor self-discipline ... poor venture capital appetite-whetting techniques ... premature approach of venture capital avenues ... premature incorporation ... premature patents ... premature product releases ... security indiscretions ... speculative losses ... superior competition ... technical problems ... the lack of zest for life which sustains a start-up ... too many details ... too rapid expansion ... trading area changes ... unable to solve customer's problems ... unbalanced experience ... under-capitalization ... under-staffing ... unfavorable economic conditions ... weak business plans ... weak incentive systems ... weak key employees ... weak marketing tactics ... weak money-leveraging methods ... weak motivation ...

Traits of a Good Target Market

A business cannot efficiently and effectively solve every prospective customer problem. Rather, successful business ventures begin by serving a particular niche market segment really well, better than the competition.

Walt Disney's Tips for Building a Good Corporate Culture

  1. Give every member of your organization a chance to dream, and tap into the creativity those dreams embody.
  2. Stand firm on your beliefs and principles.
  3. Treat your customers like guests.
  4. Support, empower, and reward employees.
  5. Build long-term relationships with key suppliers and partners.
  6. Dare to take calculated risks in order to bring innovative ideas to fruition.
  7. Train extensively and constantly reinforce the company's culture.
  8. Align long-term vision with short-term execution.
  9. Use the storyboarding technique to solve planning and communication problems.
  10. Pay close attention to detail.
[Thank you, Walt Disney]

Operations Planning Checklist

  1. Key operational objectives and strategies
  2. Location and facilities
  3. Equipment and technology
  4. Labor requirements
  5. Inventory management
  6. Supply channels
  7. Distribution channels
  8. Research and development
  9. Legal Requirements
  10. Order fulfillment and customer service
  11. Capacity utilization
  12. Critical processes
  13. Quality control
  14. Safety, health, and environmental concerns
  15. Management information systems
  16. Other operational concerns
  17. Start-up budget
  18. Operating budget

How to Write a Resume

Here is a link to the slide deck from a seminar I did at the University of Arizona for grad students transitioning to positions in industry. In particular, it addresses the process of creating a good industry-focused resume. -Jim

Tips for Picking the Right Opportunity

  1. You and your team are passionate and persistent ...
  2. Your team has or can learn the skills needed ...
  3. Your team can collaborate and cooperate ...
  4. The problem is clear ...
  5. The customers are readily identified ...
  6. The market is significant ...
  7. You have a feasible solution ...
  8. The competition is identifiable ...
  9. Your solution has better and sustainable benefits ...
  10. Your solution can generate a sustainable profit ...
  11. Your venture is timely, important, legal ...
  12. Your venture can build barriers to entry ...
  13. Your concept is scalable ...
  14. You'll invest less time, money, and effort in the venture than it will be worth in a couple of years ...
  15. If the opportunity turns out to be less than favorable, you can exit with minor losses ...
  16. Risks can be mitigated ...
  17. The upside potential is significant and timely ...
  18. Your team has a clear plan for success ...
  19. Your team can find the resources needed ...
  20. You and your team are committed to success ...
  21. The opportunity has a potential for long-term success ...

Competitive Creativity Mindmap

For 20+ years, I taught in a University of Arizona entrepreneurship program.  This Innovation Impact Mindmap started on the whiteboard in my office, a graphic schematic of the course syllabus.  

A syllabus is sequential, but innovation and entrepreneurship usually is not.  They bounce around a bit, from here to there and round again. 

The whiteboard version was fairly simple, but useful.  Students and colleagues took pictures of it for reference.  So, I thought, why not elaborate it just a little bit?  

[OK, OK, so maybe a little bit more than just a little bit!]  

I've added elements that I thought would be most useful, but certainly not all apply to every new venture! The "main highway" is the mission statement, highlighted in yellow.

Think of this Mindmap as a checklist of the elements you might want to visit as you travel around on your new venture adventure! 

High resolution versions are available HERE.

--Jim

Technology Readiness Levels

Thanks to NASA and the European Commission for this succinct guide to the readiness of technology ideas and concepts for commercial application.

 

The Entrepreneur's Creed

  1. Do what gives you energy ... have fun!
  2. Figure out what can go right and make it happen.
  3. Say "can do" rather than "cannot" or "maybe."
  4. Illegitimi non carforundum: tenacity and creativity will triumph.
  5. Anything is possible if you believe you can do it.
  6. If you don't know it can't be done, then you'll go ahead and do it.
  7. The cup is half-full, not half-empty.
  8. Be dissatisfied with the way things are, and look for improvement.
  9. Do things differently.
  10. Don't take a risk if you don't have to ... but take a calculated risk if it's the right opportunity for you.
[Thank you, Jeffry A. Timmons and Stephan Spinelli]

Innovation Hot Spots

While innovation is often associated with new products, new gizmo-gadgets, a broader perspective shows innovation occurring in many areas of a business and often has little or nothing to do with products.

Here are some key areas of innovation opportunity for a business venture ...
  1. Products (yes, still high on the list, of course!)
  2. Services
  3. Processes
  4. Business methods
  5. Business model
  6. Revenue model
  7. Positioning (relative to the competition)
  8. Paradigm (a combination of several innovation areas)

Phases of Innovation

  1. Preparation ... focus on the problem or opportunity, and who it affects
  2. Exploration ... identify current solutions, alternatives, and substitutes
  3. Stimulation ... use creativity techniques to trigger new ideas, concepts, and solutions
  4. Incubation ... give the new ideas some time and thought
  5. Illumination ... identify new ideas, concepts, and solutions
  6. Selection ... establish and use clear criteria for selecting the "best" concept
  7. Planning ... decide how to implement the concept
  8. Implementation ... put the plan and concept to work
  9. Evaluation ... determine if the new concept is working
  10. Iteration ... apply incremental improvement to the concept, or start over