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You've just built the biggest, baddest, and craziest cycling invention in the world. Now you have a dillemma: should you name your business product Razzle Kadazzle or Quad-Cycle? According to Researchers Elizabeth Miller and Barbara Kahn, consumers respond more favorably to names that sound obscure to them. Says Inside Influence's Noah Goldstein regarding the research:
Names such as Kermit green (unexpected descriptive) are effective because these names act as a sort of puzzle to be solved, which spurs individuals to consider more aspects of the products -- particularly the positive ones. In addition, solving this small puzzle should create positive emotions associated with the product. Similarly, names such as millennium orange (ambiguous) prompt consumers to try to discover, in the absence of any meaningful information, what the makers of the product were trying to convey with that name. This should also spur individuals to consider to more aspects of the products, and once again, the focus is likely to be on the positive aspects of the product....Names that fall into the unexpected descriptive category or the ambiguous category create a sense of mystery and intrigue that lead potential consumers to consider the positive aspects of your goods and services.
So when you're naming your product, get some fun and obscure ideas into the mix.
Posted on April 04

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Don't believe everything you read. Sure, an author may point out that Company ABC, who has grown revenues rapidly by 500% uses empowerment to drive its company's growth. But flip the coin for a sec. What if the author ignores how empowerment erodes confidence in another company: Company XYZ? A certain book I read two years ago regarding "cult marketing" highlighted companies and programs that look good then. Yes, these companies who used cult marketing had initial large jumps in profits. Magazines heralded their executives, and the long wait lines was a good indicator of how much people liked the companies. But did cult marketing also lead to the downfall of most of those companies? Most now have crumbled--most notably including Krispy Kreme and the WWF (aka WWE). Too bad no follow-up book on "cult marketing" exists.

How to Combat Selection Bias in Business

Says Stanford's Jerker Denrell, "Impressive studies show that following best practices, focusing on the core, and building a strong culture are among the secrets of business success. But beware: These and other received ideas may also be the secrets of failure." When you're analyzing data or business books, remember this: correlation is not causation. The best way to combat selection bias, says Denrell, is to "get all the data you can on failure." If authors forget this concept, they'll guide you to absurd theories on why businesses succeed. Just because I traveled to Ethiopia for the week, and Yahoo's price soared during the week -- it doesn't mean me being away caused Yahoo's stock to jump. A gross analogy, yes; but, it shows the ridiculous assumptions of most business books. Too bad most business authors forget the concept of causation. And, folks: that's why most business books suck.
Posted on April 03

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We've said it countless times to entrepreneurs just starting up businesses: business failure is good. It encourages you to experiment. Your business is young, with an exuberant attitude. Now is the time to start experimenting and messing up. A lot. Unless your a multi-million dollar startup, you're at a stage where Forbes or BusinessWeek won't report your screw-up. If you're not messing up, you're not trying hard enough. Failing lets you understand where you went wrong. It also pushes you to strive even harder to make the next thing a success -- that is, of course, if you continue persevering. Most importantly, it increases your chance for success.

Business Failings: Think Odds!

Keep odds in mind when you're failing: Let's say the chance of one of your inital business product's success rate is 10%. If you took statistics in college, you know that every successive product you build increases the odds of your success by the root of 10%: Chance of ONE business product success: 1 experiment = 10.0% 2 experiments = 31.6% 3 experiments = 46.4% 7 experiments = 71.2% 10 experiments = 79.4% It's no wonder one of Wall Street's most innovative companies, Google, produces five products for every one success. (Of course, all products have differing odds for success, as well as the business producing them. We used 10% as a rough and conservative median range for successful products. You should use the most appropriate figure for your specific business/industry/etc.) The point? Increase the number of experiments you do, and you'll drastically increase your odds of being on that BusinessWeek cover flashin' your million-dollar smile. (Literally.) As Anthony Robbins says, failure is wonderful.
Posted on April 03

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Thinking about starting a successful business startup is one thing; but actually doing it is quite another experience. When we started Trizzy two and a half years ago as a computer consulting company, we thought we'd rule the world within a few months. Then, a few months passed. Then, another two. And, another two. Then, a year. We worked hard, but we would've been embarrassed asking an accountant to do our business taxes. We made zilch that first year. Second year? Not better. We poured our hearts and spirits into the company, worked late-nights, and never received the results we expected. What was happening to our company? Why was our business startup failing? We could've applied for consulting gigs at more established firms, and our lives would've been much easier. But those consulting firms didn't have the philosophy we had: helping our clients change the world through their businesses. So, we continued persevering. By good fortune, and a mountain of persistence, looking back now: it was worth it. We're not where we want to be, yet. But, we're still fighting. "I am not discouraged, because every wrong attempt discarded is another step forward." -Thomas Edison Companies that you see successful didn't start out that way. Sam Walton built his company for 7 years before people started noticing his discount retail shop. Colonel Sanders took years to develop his trademarked recipe, went to 1009 stores to sell his recipe, and was rejected every time. Walt Disney didn't do much better: he was rejected 302 times for an idea of a theme park. Thomas Edison had an enormous number of failures before he found success. Is the point perseverence? Not exactly. That's too simplistic. The point is: learn first from your mistakes. As author Jim Collins calls it, learn the "brutal facts" of why you've failed in your business startup. When you understand why, you'll understand how persevering will get you closer to that glimmer of light at the end of the tunnel.
Posted on April 02

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Oftentimes we look at business offshoring as a cost reducer. Yet, we rarely realize how offshoring can strategically affect our businesses. A typical scenario involves outsourcing the work without seeing it as a growth opportunity. A study done by both Duke University and the International Business Education and Research and Archstone Consulting found that companies are increasingly using the better-than-expected results for strategic growth. One example includes offshoring basic business functions, so your domestic task force can focus on more complex tasks. At the key of all offshoring initiatives, it's vital to gradually build that relationship first. Once you get comfortable with an offshore partner, you'll see noticeable strategic opportunities for your business.
Posted on April 02

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The most innovative business ideas come from different contexts.

  • The iPod wasn't built from scratch; Apple transformed the aura and simplicity of their computer presence and took it into the music environment.
  • The same applied to online travel planner, Expedia. The company took the typical travel agency service, and brought into a different context: the World Wide Web.
  • Or how about Toys R Us? The founder took the idea of supermarkets, and created "toy stores."

Says Florida's Andrew Hargadon and Stanford's Robert I. Sutton, "The history of technological innovation is full of examples of knowledge brokers bringing together ideas from disparate contexts."

When you're thinking of business ideas for your product, you could inch that much closer to a million-dollar idea by scanning a totally different industry.

Posted on March 31

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When I first started farming out jobs to local contractors, I was worried my secrets would leak into the wrong hands. Luckily, it never did. On the contrary, I saw the huge advantages: among them include higher quality with specialized providers and freeing up more time to work with my customers. Says Texas Tech Professors Eric Walden and James Wetherbe, "'At the length truth will out,' Shakespeare tells us, and the same goes for intellectual property. Companies that outsource would do well to focus less on what they give up and more on what they get in return." When was the last time you heard a million dollar idea stolen from a contractor? It usually doesn't happen. By sharing our ideas openly, as we've found in our experience, we gave our providers means to produce or service a better product.
Posted on March 30

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Ever visited a broken business building that's been totally ignored by city officials? You probably received another sense when you were inside: people living within the those quarters didn't care too much about their working residence. Michael Levine, author of Broken Windows for Business, has this theory: if you ignore the little details, you may be sending mixed and subliminal signals that you don't care for your employees. "You can't convince employees that you love and care about them if you're sending psychic signals that you don't," says Levine. "There's a significant psychological impact to dingy surroundings -- to stained carpets and broken toilets." Worse, says Levine, if you place your top employees with underperforming players, you may be sending the signal that you don't care about employee performance. Not removing those poor performers will unleash a virus among your team. As bestselling author Jim Collins points out: when you need to make a people change, do so quickly. That'll send a swift message about employee performance.
Posted on March 29

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When we started blogging, we didn't know the amount of responses we would get from our users. To our surprise, it became an indirect marketing technique that's become invaluable. By establishing ourselves as someone who knows a thing or two about business, our clients told us they came to trust our abilities in servicing their companies. Says Professor of Marketing at Milan's Bocconi University, Francesca Golfetto:
With buyers increasingly savvy, how can companies resist relentless commodification and distinguish themselves from rivals? An increasingly popular approach is to emphasize one's expertise in the business, as distinct from the quality of one's product. Such competence-based marketing is especially persuasive in business-to-business relationships that involve hard-to-assess goods or follow-on services.
Advertising and other marketing means are becoming saturated. You're an expert at your business; the next logical step, of course, is to publicize your expertise.
Posted on March 29

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When you're interviewing a potential employee for your business, it's rare that you'll uncover the actual person. According to a recent study, thirty percent of applicants lie on their applications; much more embellish their professional history. How then do you get the truth? Says Caliper's Herb Greenburg:
Try to get a sense of their character as well as what they've learned from their accomplishments and their failures. Try to get at what is genuine. The key to hiring and managing people is to find out what drives them. One of the most important questions to ask is "Why?"
Posted on March 28

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