Your best business idea ever
LENA RAMFELT JONAS KJELLBERG Tom Kosnik
â€œGear Upâ€? is for Entrepreneurs, Intrapreneurs, and anyone else who helps them bring a new business opportunity to life.
SOME COMPANIES SUCCEED, OTHERS FAIL 4
What makes some business ideas flourish while others whither and die? What components should you focus on when defining a new idea or sharpening an existing one? What is the single, most important element that absolutely must work for a business to succeed? (Careful â€” that was a trick question!)
If you are planning to pursue a fresh business
the program, you will learn to leverage your most
opportunity or grow an existing one, you may be
precious possessions: your relationships, reputa-
looking for some answers. Gear Up can help.
tion, talent, time, and money.
Use this guide to determine whether a new business idea is worth your time, or to decide
Gear Up is intended to help entrepreneurs, intra-
whether to push ahead with your current busi-
preneurs, and executives responsible for deci-
ness opportunity or toss the old plan and devel-
ding which new ideas are worth pursuing. It is
op something even bigger and better than you
the result of a joint effort between entrepreneurs
and academics, and every recommendation in the book has been tested in the trenches by executives around the world.
Gear Up does not offer solutions to specific problems. Rather, it is a tool for assessing the needs of your particular situation. Your respon-
But Gear Up is also a valuable resource for
ses to the questions raised in each chapter
undergraduate and graduate students. The aca-
summary will create an outcome, a strategy,
demic roots of the Gear Up model can be found
that is unique for you. Think of this book as your
in Harvard University and Stanford University, and
personal trainer: It will help you define a training
the book is already in use at Stanford and in the
program based on your objectives, but you will
Stockholm School of Economics MBA program.
need to put in the hours at the gym yourself. It will tell you to do the push-ups, but it will not do
FIRST THERE IS CONFUSION
them for you. If you stick with it, the payoff for
Tackling a fresh business opportunity and star-
your dedication will be worth it. As you work with
ting a new venture have something in common: 6
confusion. You don’t know where you’re going,
asm.” In fact, many entrepreneurs believe that
the risk seems enormous, and the idea might
the first heady rush of plunging into a new
not even work. You want to test it, but you’re not
venture is the best part of the whole process.
sure if you have the guts and patience to try, and
So, take heart! Gear Up will guide the develop-
there are no short cuts.
ment of your business opportunity by helping
THEN THERE IS STRUCTURE
you create a customer acquisition–centric strategy. As you begin to follow the program,
But that’s the nature of the beast. As Winston
you’ll discover that there is indeed a supporting
Churchill once said, “Success consists of going
structure amidst the confusion, and your path
from failure to failure without loss of enthusi-
to success will emerge. 7
HERE it is! The gear up model Chapter
Customer Acquisition 34
Structure your thinking
that is not enough! You also need a method of
So what are the gears that you’re supposed to
customer acquisition and a sustainable business
“gear up” with, anyway? There are nine of them,
model. The three gears of delight, customer
and they represent the most critical compo-
acquisition, and business model together make
nents for launching a high-potential company.
up your sales formula.
They are customers, delight, customer acquisition, business model, partners, competitors, go
As your business begins to grow, you will most
global, team, and reality check. You don’t have
likely need to find the right partners. And since
to go through the gears in any particular order,
you are not launching your venture in a vacuum,
but you do have to go through all of them and
you will have to handle competitors who are
make sure that they are in sync. If you have
perhaps tougher, more experienced, and better
done that, and you find that you still have the
funded than you are. If your business really
passion to cure your customers’ pain, then you
takes off, you will go global and take care of
will know that your business opportunity is
customers with pains all over the world. Last—
but certainly not least!—is your team, which is the linchpin for innovating, delivering, and challenging other companies in all the gears.
Here’s how it works: You need customers — usually a lot of them! — and the ones you want to attract are those with a particular “pain” that
People with exceptional talent and the ability to
your product or service can get rid of. For that
deliver will become the heart of your business,
you need a unique delight, which is some
and you won’t get anywhere without them. Just
wonderful thing about your product that disting-
make sure you do a reality check once in a
uishes it from your competitors’ offerings. But
while to stay on track.
Up ar Ge
Ready? Let’s gear up! We’ll start with the raison d’être for your whole strategy: customers
Can’t ride with them Can’t SELL to Them 12
LET’S BE CLEAR: THERE HAS NEVER BEEN A SUCCESSFUL COMPANY WITHOUT CUSTOMERS. IN ORDER TO WIN CUSTOMERS, ONE OF THE GREATEST CHALLENGES A COMPANY FACES IS UNDERSTANDING WHAT POTENTIAL CUSTOMERS WANT AND THEIR UNDERLYING PAIN. ONCE YOUR COMPANY HAS ITS FIRST CUSTOMERS, HOW CAN YOU MAKE SURE THAT A SMALL GROUP OF FANS GROWS INTO A MASSIVE TRIBE? HOW DO YOU MAKE THE TRANSITION FROM NABBING THOSE FIRST CUSTOMERS TO CAPTIVATING THE HUGE MASS MARKETS? IS THERE REALLY SUCH A THING AS A MASS MARKET? OR IS IT JUST A COLLECTION OF NICHE MARKETS? THIS REQUIRES THE CROSSING OF A GREAT CHASM.
FIGHTING FOR THE CUSTOMERS’ MINUTES
and do what you’d prefer them to do instead. It
It has become increasingly difficult to convince
to categorize different companies and their
potential customers to invest time in considering
prospects for success, we would name the type
a new product. There are only 1,440 minutes
of company that faces this challenge: High Risk,
in a day – including sleep, meals, work, travel,
can be done, it has been done – but if we were
exercise, conversations, laundry, chilling, etc. Most customers already have a full schedule. This is
Here are two alternatives that you may use: In-
the reality you must overcome in order to get
stead of changing customers’ behavior, try chan-
those potential customers to squeeze in the time
ging the product. This is the most common way
to consider – let alone commit to – your ama-
to address customers. If they are already driving
zing product. Trying to change your customers’
one car, why not offer them another? In this case,
behavior is tough. Instead of continuing to do
you offer a product that does not necessitate
what they’ve been doing, today you want them
a change in the customers’ behavior, but only a
to make a change, move away from their routine,
change in their product choice – to yours!
Or try what we refer to as â€œincreasing the density in the minutes.â€? What we mean by this is, again, you donâ€™t ask the customers to change their behavior. Instead, offer the chance to get more out of any given set of minutes. A great example of this is smartphones. You use them for talking, checking emails during a meeting, listening to music while running, and killing time with games during long commutes, etc.
p rU Gea
How the customer described it
How the salesman sold it
How the project leader understood it
But how will you know what works for you and your company?
a pain exists. Again, it may not be as simple as:
There are, unfortunately, no short cuts here! As
people could do something smarter, faster, eas-
hard as it might be for some, sooner or later, you
ier, cheaper or with more fun. While you are out
have to leave your building and start interacting
there observing and interacting, we suggest that
with potential customers. You’ll never know if
you also pay attention to other things that are
there is a customer pain, and whether your idea
going on: what kind of places is your pain con-
for a product is the right one, if you don’t step
nected to, or what gadgets, tools and equipment
out of your comfort zone – the office. So again:
are people carrying around? Are they alone or
time to meet your customers! But how do you
in a group? In our interaction with entrepreneurs
do that? Let’s start with how you do not do it:
and students, we call what you learn from these
no awkward first point of contact via available
“field trips” Episodes. A good episode includes
data you scrounged up on the Internet, and no
everything around the pain in focus. Try it! Go
wasting your precious time developing an open-
to the subway, sit down on a bench and just
ended survey via email. Much better to observe,
observe people: What are people doing, carrying
participate, and interact. The clues you’re looking
and paying attention to? Learn how to observe,
for will tell you, first and foremost, whether or not
take notes, and draw conclusions. In a nutshell,
you ask and they confirm. It might be that you observe, and from the examination deduce that
How the factory built it
How the customer was billed
What the customer really needed
it is far more effective to go talk to your potential
might not be the same reasons for which you
customers and sell them a prototype than to
are selling it! But they will give you ideas for
spend more time in a meeting room, drawing on
improvements, and you will be among the first to
a white board, and having endless discussions
know what they dislike about your product. The
about how good the product is going to be. Get
easiest way to find out if customers are pre-
out there and sell what you have to your friends!
pared to buy your product is to ask them to pay
Think constant prototyping – the more feedback
for it! Be fast in launching your first version.
you get with different alternatives, the faster you
FROM PAIN TO PRODUCT
will nail the question of whether there’s a pain.
OK! Now you have a fairly good idea of the
INTERACT WITH YOUR CUSTOMERS!
Pain Point and how that can be translated into a product. Next challenge is to communicate
You’d better get used to this. It’s what you and
that to your team in the company – the pain,
your team will have to keep doing forever! Hilti’s
including the product idea, has to be translated
design team is doing it, the product team at
into something the engineering team is able to
Volvo is doing it, and the founder of IKEA gets
produce. The knowledge must be turned into a
a kick out of doing it. You will learn a lot about
roadmap, including milestones and deliverables,
why customers are buying your product – these
and later on be transferred to the sales people in 17
Customers a form they’re able to comprehend and present
implements a system which includes the time
to the customers. This is a big challenge in all
to bill, perhaps with an installation fee, and then
companies: the route from Pain Point, and how
a monthly subscription that will secure recur-
customers explain their needs, to a full-fledged
rent revenue. And support? Maybe that’s still
and marketable solution they can recognize as a
to be determined how that will be handled, by
product that solves their pain.
whom, and whether to include it in customer acquisition costs. Revenue is pretty good! The
HERE IS HOW IT USUALLY GOES!
buzz has been OK! But is it really what the cus-
You have an idea for what the customer needs:
tomer wants? The ultimate test is if they keep
She talks about it, she shows you what she
coming back for more!
wants. She might even have her own idea for what could be done. You and your team listen,
Lessons learned: Listen, listen more, interact,
and listen well to translate what you’ve heard
and be prepared to modify. Bring as many as
into an internal specification. Of course your
possible of your team members to interact
team is involved, so their experiences and exper-
with your customers. Make interacting with
tise influence the layout of the internal project
your customers priority number one, because
that you design. (Just a reminder: do you have
remember: without any customers, there will be
the right people on the bus?)
no revenue (easy to say, easy to understand, harder to do).
The pain is, by now, a project description given to the engineering team to translate into a
ADD PAIN CIRCLE
roadmap with milestones and deliverables
… but is the pain always the same? The pain
(engineers are great at this!). After they have
and the delight will differ depending on the tar-
completed their work, the product is ready to
get customers. Therefore, both the pain and the
launch! Out to the market – usually with a big
delight will change over time along with your
release party. The more media coverage, the
success. So you have delighted the customers
better! During this phase, the sales force starts
and there is a market, but how big and what
looking for leads, while the operations group
new challenges may develop?
W HO DO
Ge ar Up
EY SAY? WHAT DI
? RN EA L U D YO
WH AT DO TH
KA GA I
DO THEY FEEL T HE ERS! PA TOM UY IT? IS IT SIMPL E TO IN? US YB U E C THE SE TH , DO ? . I.E
DO THEY FEEL T H ERS! OM
ELIG UD O Y
what pain do you solve?
E THE CUSTOME SOLV RS’ OU PA Y IN? DO
CROSSING THE CHASM
high-risk, high potential companies start pre-
One of the most influential models for high
chasm. This means that in the beginning, they
potential companies is the Technology Adoption
sell more of a technology than a product. Most
Life Cycle presented by Geoff Moore in â€œCross-
pre-chasm companies encounter some serious
ing the Chasm.â€? This famous model tells you that
challenges when they have to take a big leap
different customer groups have different pains,
and cross the chasm in order to access the big
and in the attempt to reach the mass market,
markets where they (hopefully) will build really
most companies fail. Do you know where your
big companies, become famous, and maybe one
product fits into the model illustrating what the
day in the distant future become wealthy. There
customers will look like and who will be your
are several challenges with moving from one
first, second, and ultimate target market? Most
stage of the Technology Adoption Life Cycle
TECHNOLOGY ADOPTION LIFE CYCLE
Up ar Ge
Customers to the next. In most companies this shift from
the buttons – even though they might only use 3
one stage to another goes unnoticed nor does
or 4. Your partners, and employees and potential
anyone involved know just how they did it. But
investors also love it because they adore new
pay attention. Because one thing is certain: Your
company will change! After you have Crossed the Chasm, this unbe-
lievable thing happens: customers start asking
Let us give you an example of challenges a high
what “it” can do for them. They want to know
potential company has with Crossing the Chasm.
how it will make life easier, make them happier,
You start with a terrific team of engineers. You
or work more efficiently – what the delight is.
assign them the task of developing a product
Your customers think you’ve built an ugly re-
that allows someone to remain ensconced on
mote with too many buttons to figure out. They
the couch while switching to another channel.
toss your creation aside to get up and switch
Your engineering team is excited and they do a
channels the old way. What happened? Without
great job. In the first prototype they show you a
planning for it, you have moved to a new phase
control with 10 buttons – in the next 13. Luckily
of the company. Implications? Huge! New
they run out of budget just as they reach 15 and
types of customers, new partners – maybe
you have to put an end to the development. (Of
even new employees. Face it: you might even
course they’re disappointed since they’d already
have to hire a VP of marketing! Maybe you
come up with the hardware and software for
should check again? How many buttons do
three more.) Pre-chasm: your customers love all
your customers need?
chapter summary – CUSTOMERS Passion has to be translated to a Pain among
always the right strategy to ask customers
a large enough set of potential customers
for advice. Remember to observe, live their
who are prepared to pay for having their Pain
lives, and find out if there is a Pain out there
cured. Without a Pain and a large enough
that you might cure. Also, remember: If you
base of customers, the only way of finding
can ride with them, you can sell to them! If
out if your idea for a venture is valid or not is
your answer is NO to any one of the ques-
to interact with potential customers, partners,
tions below, you need to keep on working
investors, and other stakeholders. It’s not
with this gear.
Questions that require an answer: 1. Have you found a Pain that is shared by many? (How do you know that?) 2. Do you and your team have the Passion to take on this Pain? 3. Do you know who your first customers are? 4. Can you make a prototype that confirms your customers’ pain? 5. Can you ride with your customers? … and then there is Delight!
remember Ride with your customers and understand their pain. Then convert it to a solution.
Innovate donâ€™t Imitate 24
You have found your first customers and sold them your product. But have you delighted them? If you have, will they tell others or keep it a secret? What makes your product unique and compelling? What takes your customers’ breath away? What makes the experience of buying from you so far beyond the competition that your first-time customers become your diehard fans? Some say the answer is your unique selling proposition. For other customers, the compelling reason to buy is your elevator pitch. We call it the Delight Divide.
Pay attention to the pyramid of needs
muscle except his thumb. Your smart phone must let a customer talk and text without dropping a call.
Delighting customers doesn’t come easy. They don’t just want a flashy presentation or a cool
Efficiency: Your product must cure the pain
marketing stunt. What they want is for you to cure
faster or cheaper than anything else on the mar-
their pain! To create delight, you have to start at
ket. Does your car get great gas mileage? Can
the bottom of your customer’s pyramid of needs.
your remote control operate your TV, DVD, and set-top box? Does your smart phone cost less
Functionality: Your product has to cure your
than competing products?
customer’s pain! A car has to get a driver from point A to point B without breaking down. A
This is where many companies stop, and where
remote control has to let a couch potato surf
many new ventures fail. Functionality and ef-
channels and change volume without moving a
ficiency are not enough. Add delight, and your 26
customers will love you and never let go.
creates new markets – Apple’s iPad created a
Functionality and efficiency can be learned from
new category. Delight also brings slow, sleepy
others. Look around! Me-too products clutter
markets to life – Apple’s iPhone revolutionized
every market on earth. Delight must be created,
the smart-phone industry.
invented and discovered. Sometimes delight 27
INNOVATE, DON’T IMITATE
just one factor. It comes from designing beauty
Delight is the result of relentless innovation.
in the details. As customers use your product,
You are never quite satisfied. You’re seeking
they experience one pleasant surprise after
perfection. You love your customers and curing
another. It feels like the product anticipates their
their pain so much that it keeps you up at night.
needs. Sometimes it allows them to do things
Delight is the “unique” in Unique Selling Proposi-
they could never do before. All of this makes us-
tion. It’s the “compelling” in Compelling Reason
ing your product a pleasure. Customers will fall
to Buy. Without delight you’re just a commodity.
in love with your product!
It’ll then be all about price, and survival in a
If you delight, your customers will sell
market where the big beats the small.
your product for you. If you delight them, your customers will sell
But how do I delight?
your product to all of their friends. If there is no
First, get to know your customers inside out
delight, you have to do all the selling yourself. If
… so well that you can read their minds. What
it’s not about delight, you are selling functionality
are they secretly longing for? What makes
and efficiency against your competitors. Your
them swear under their breath every time they
selling proposition won’t be unique. The delight
log in, buckle up, and trip over that same door-
factor creates the “Holy Shit! Effect” that turns
way? This will reveal the pain that they thought
your customers into salespeople who pay you to
would never be cured: the pain of an impossible
sell! If they achieve delight, your development
remote, a jumpy touch screen, or a phone that
team will have a much bigger role than your
“autocorrects” a friendly text into an insult. You
sales team in driving revenue growth.
can’t know customers’ pain that well unless you spend a lot of time with them. “If you can’t ride
with them you can’t sell to them.” Would a Hell’s
• If all you have is a “competitive” product, hire
Angel buy a motorcycle from someone who’s
a big sales team, and innovate in sales and
never been on a Harley? When you develop a
customer acquisition. • If you have achieved the delight factor, your
cure, go beyond anything that exists in the market today! Create something you would love to
development team will be thinking about cus-
use – a product that our mothers would describe
tomer conversion – “sales” – in everything they
as “simple made easy.” Delight is not the result of
do. The product will sell itself.
THE POWER OF STORYTELLING
How can you transform their most compelling
Customers love to share their delight!
stories into the stories you tell in your sales and
Customers buy your product. They discuss what
they like and don’t like about it with others. If you delight, they will rave about your product, and
What is your Delight Divide?
encourage others to buy it as well. They will tell
Answer the following:
stories about your product and their friends will
• What are you doing at the levels of functio-
listen and believe them more than the world’s
nality and efficiency in the pyramid to cure
best salesperson. What do your customers say
customers’ pain? • How do you delight the customer?
about your product? What stories do they tell?
• How far have you gone beyond the competition
Friction-Free Story Telling
that you have changed the rules of the game?
You have 30 seconds to get a stranger to re-
• How do you Keep It Simple – so your custo-
member your product. Ready, go! 30 seconds is
mers can tell stories about their delight to their
all you have to capture their attention. Your goal
friends and family?
is to get them to say: “Tell me more.” People love
If for any reason you don’t have delight, go back
listening to stories – as long as they’re authentic,
to your customers and work on their pain. No
entertaining, and new. If they really love the story,
point in moving forward until you get this right!
and it’s not too hard to tell, they’ll pass it along to 30
their friends. A great story is never just informa-
of a “devil’s advocate.” Did anyone buy either
tive. It also has emotional appeal. And remember,
story? If not, where was the friction? What cre-
the story is not just about your product. It’s
ated resistance rather than engagement in the
about your customers’ delight. The process of
listener? Did most people like one story more
creating great stories is what we call Friction-
than the other? Would they be willing to share
either one of the stories with their friends? If not, ask them how they would change the stories
First, craft two stories using different story
to make them more compelling. Re-write the
lines. Second, try them out on your mom. Third,
stories based on their feedback. Your goal is to
tell both stories to two of your friends. Fourth,
make them friction-free stories that people are
try them out on a pair of strangers. Finally, tell
able and willing to share. Now you’re ready to
them to the closest person who fulfills the role
share the stories with your new customers, and
delight continuously iterate until you have a story that
to create a story worth retelling:
people love to tell.
• The David and Goliath story: “My product is fighting a big and ugly foe.” • The unusual or outrageous story:
Don’t just tell stories! Ride with your customers,
“Richard Branson used it while skydiving!”
and listen to the stories they tell about your product. Listen to their stories about other products
• The controversial story: “Larry Ellison loves it – Bill Gates hates it.”
they love and hate. This will help you to develop
• The celebrity story:
friction-free stories that will go on creating buzz
“Brad Pitt and Halle Berry both bought one!”
for your product.
• The “What’s hot in the media” story:
THE STORY OF DELIGHT
“It may help reduce global warming.”
Let’s face it. Most stories are boring, not worth repeating, and will not stick. Customers are dif-
Once you’ve created stories of customer delight
ferent. No single story will appeal to all of them.
using different story lines, ruthlessly evaluate
They will create different stories to describe their
them. If they pass, you can share the stories with
delight in using your product. This is why you
your mom, and friends, and strangers. See which
need to tell multiple stories about delight. They
ones they will pass along.
will be repeated millions of times. Bottom line: Tell a good story. If you are successful, Here are five proven story lines that you can use
you are well on your way to a friction-free story.
chapter summary – DELIGHT Without delight, your cure is just a forgettable face in the crowd. With delight, complete strangers will love your cure at first sight. People spread the word about delight by storytelling. If you can discover or create a portfolio of friction-free stories, your customers, investors, channel partners, and even competitors will pass them along. An authentic, compelling, and friction-free story will create buzz and be shared by mil-
lions of people around the world. No point in going further with your business opportunity if you are not sure about your Delight Divide and your friction-free stories. If your answer is NO to any of the questions below, use the tools in this chapter to reframe the story for your customers until they are delighted and spread the word. It’s a waste of talent, time, and money to move forward before you get this right.
Questions that require an answer: 1. Do you know the Pyramid of Needs to cure your customer’s pain? 2. Have you created a Delight Divide for your cure? 3. Have you developed a family of friction-free stories? 4. Are your customers sharing the stories? That is, are you creating buzz?
remember Delight is all about innovation, and not about imitation.
ALWAYS BE CLOSING
ALWAYS BE CLOSING AND SELLING – SOME LOVE THIS, OTHERS HATE IT. WHAT MAKES CUSTOMER ACQUISITION DIFFERENT FROM SALES? TIMEHONORED TRADITION SAYS IT’S EVERYTHING! BUT WE SAY IT’S NOTHING! CALL IT SALES, CUSTOMER ACQUISITION OR EVANGELIZING: IT ALL STARTS THE SAME WAY. SOMEONE NEEDS TO WALK OUT OF THE OFFICE , AND GET THE FIRST CUSTOMERS TO BUY.
The next key is to increase the rate of adding
is a numbers game. It is all about conversations.
more customers. Every morning, before both
Knock on 100 doors, and 10 potential custo-
your feet hit the floor, you should contemplate
mers may open up for a conversation. However,
how to attract new customers, keep existing
from the 10 potential clients, only 1 may end up
customers, and investigate why some of them
signing the deal. So why not increase your fre-
are leaving. Don’t forget: no customers means
quency and knock on 200 doors to close twice
no profits and no fun.
as many deals?
SALES IS FREQUENCY
Frequency is a critical job in every company. You
What we call frequency, others call sales or
and your team have to make the first 100 sales;
pipeline management. No matter how good your
no one else can do it. Frequency can’t be dele-
product is, there will be no customers without
gated until you’ve proven that the product can
frequency. As a result, there will be no profits,
and your venture will eventually die. We can’t stress enough the importance of frequency. You will bring in more customers when you in-
Conversations with customers not only provide
crease frequency. The more customers you con-
insights to create and enhance Delight, but the
tact, the higher the probability of a sale. Sales
deals you also close contribute to your profits. 36
Gea r Up
If you can’t ride with the customers, you can’t sell to them! But let us suppose you do manage to join the weekend motorcycle posse. How should you convince your new buddies to buy your product? Start by asking yourself: what is my target market? Which customers are most likely to buy this product? Where will I find the greatest number of solid leads? Ponder these questions as you sit behind your desk at the office. When you have the answers, then it’s time to venture out and meet your customers. Now ask yourself: what are the best ways to get in touch with them? Is it via email, personal introductions, TV commercials, Google keyword search or Facebook ads? Whatever channel you choose, make sure that your customers either understand what you are selling, or figure out how your product can be changed to fit customer needs. Iterate and reiterate!
MAKING THE DEAL Letâ€™s say customers love your product. It is the perfect fit! Now you need to get them to start using your product or service. However, people who need the remedy are not necessarily the buyers. You need to distinguish between the decision makers with purchasing power, and potential users without authority or money to buy your product. You also need to analyze if the price you set is appropriate given the value you offer by curing the pain. Maybe it is the wife who makes the decisions in the household even though it is the husband who needs the Harley Davidson. Once you have addressed the matters above, itâ€™s time to get paid. This is a proud moment! You now have paying customers, and this fact makes a huge difference to the image and valuation of your company.
INNOVATE IN SALES! Never stop innovating in how you approach different customers. The key is to innovate and not imitate! Always strive to find more effective ways to sell. What new channels or methods will help to reduce customer acquisition costs? The more you can sell with a lower cost, the better. Some of you may say: â€œOK great, but I have an Internet venture so selling is different for me! All I need is to put my product online and users and paying customers will come to me.â€? WRONG! Web-based products need frequency too! Instead of knocking on doors to present your product, you need to get unique visitors to your site via promotions on online forums, blogs, catalogues and mobile advertising, etc. The more potential customers spend time on your site, the higher the conversion rate from random clickers to paying customers. Google Analytics is all about understanding frequency! How does your company define frequency, and what is your actual or future estimated conversion rate? Some great companies have honed their sales tactics to perfection. They treat sales as a sophisticated math equation based on the same questions we introduced above. What is the target 39
customer acquisition market? How can the company secure leads?
DELIGHT IS A PART OF SALES
How can the leads be converted into custom-
Why Delight? It is simple. The more people like
ers? There are plenty of tools, articles and books
your product, the more they will sell it for you. It
to help create a great sales culture within a
may sound clichéd, but it is much easier to sell a
company. Unfortunately, you essentially need
product that people actually like.
to create your own formula for sales triumph. Note that the more unique your successful sales
For example, with a Delightful product, you may
methodology, the more difficult it is for others
attract 20 open doors and seal 15 sales. This
to copy. In other words, even if your competitors
15X improvement for every hour of frequency
duplicate your Delight over time, it is harder to
not only allows you to grow your business faster,
decrypt your unique sales formula.
but also further increases your profits if you can achieve the same result with fewer salespeople.
Reflect on your idea and evaluate how good you and your team are in sales. Mark it on a scale
Frequency is opening closed doors, interacting
from 1 (awfully bad) to 10 (exceptionally amaz-
with customers, and convincing customers to
ing), and brainstorm how you can surpass your
buy. Delight means having customers knocking
competitors in frequency. What can be done to
on your door and begging to buy. Conventional
increase frequency? In fact, there is so much
wisdom says Delight is achievable only some
more to selling than frequency!
of the time, and sales is dependent on a few satisfied and loyal customers. But our advice is
FREQUENCY, DELIGHT AND PROFIT
to always, always strive to delight your customer! First, Delight will reduce customer attrition; cus-
Frequency is very important, but it alone is not
tomers will remain loyal only if your product con-
enough in sales. Customer acquisition boils
tinually thrills them. Second, delighted customers
down into three critical components: Frequency,
will raise frequency and reduce sales costs by
Delight, and Profitability. Together, they present
recommending your product to their friends
a challenge. Without the skillful integration of all
and families. Third, customers’ feedback will not
three components, your business may be in for
only reflect your product development efforts,
a fall. Visualize a three-legged stool without all
but also guide you to achieving perfection and
three legs – the stool will topple over!
deepening the Delight Divide for your product. 40
test. Ask each customer to rate your company
Treat these customers as your best buddies!
by the people they’ve interacted with: you, the To achieve Delight, the “frequency team” in your
rest of the core team, your sales people and
company has to be in sync with the product
even your developers. Find out whether the
development team, and the product develop-
customers would recommend your team to their
ment team has to be in sync with the custom-
friends and colleagues.
ers. Orchestrating this three-way interaction is a critical task for your core team. How effective
Think about your idea and evaluate how good
is your frequency team at helping your product
you and your Dream Team are in Delight. Mark
developers create Delight? To measure their ef-
it on a scale from 1 (awfully bad) to 10 (excep-
fectiveness, subject all of them to the customer
tionally amazing). 41
much each new additional customer will con-
There are a few key questions to consider. First,
tribute to the profits you earn. Ask yourself: do
how much is the acquisition cost to get a new
the benefits of gaining new customers outweigh
customer? Second, what is the churn rate or
your anticipated acquisition costs? Numerous
the attrition rate: how many customers will leave
companies have launched without a clue, but it is
after they have tried your product once? Third,
advantageous to track and know in advance how
what is the estimated lifetime value of your typical
much it will cost to add more customers!
customer? In other words, how many products will the average buyer purchase, including add-ons
For some companies, the cost of sales is much
and after sales? Or for how many months are
more consequential than the expected lifetime
customers willing to pay the service fees?
value of a customer. Remember to do your homework and add the above figures to your
You don’t always have to incur sales costs, and it
is advantageous not to have costs! Think about your idea and define how effective It may sound strange, but reducing costs to zero
you and your team are at minimizing the cost
has become a key factor in recent years. The
of acquiring customers on a scale from 1 (aw-
more innovative you are in taking away costs,
fully bad) to 10 (exceptionally amazing). What
the better you will be in eliminating costs to zero.
can you change to outstrip your competitors in
Every zero you add to the cost column increases
increasing lifetime value or decreasing acquisi-
the probability that the idea you’re developing
will be a game changer. Try to innovate in your zeros can you find? Skype, IKEA, Ryanair, Apple
YOUR UNIQUE SALES FORMULA IS LIKE BUILDING A STRADIVARIUS
and Google all found zeros and devised to get
Every detail is of importance when trying to
as many zeros as possible in the cost. (Read the
make the best sounding violin in the world. Your
next chapter for more details.)
sales formula is your company’s way of deliver-
business model with the zero game: how many
ing your Delight. Try to innovate, and always look It’s imperative that you know how much it will
for newer and cheaper ways of delivering the
cost to sell as you grow. You want to know how
message about your Delight. Strategize how you 42
can meet more customers more often with more
playing a Stradivarius, and not a warped fiddle
enticing offers. Every detail counts, from the very
you picked up from a starving musician. Where
first contact with the customer through delivery,
do you find your customers, and how can you
Delight and re-purchase. You should eventually
add more? How can you make tiny changes in
achieve perfection by fine-tuning the strings of
input that quickly become overwhelming diffe-
Delight, business model, and frequency. At last,
rences in output? In science, in life and in sales,
working with your sales formula will feel like
a chain of events can reach a tipping point that 43
customer acquisition magnifies small changes. What would that chain
future sales strategies? Are there challenges
of events be for your company? In our inter-
and resistances you will potentially face? Once
connected world, events that are far removed
you’ve sorted out how you brought in existing
from you may create significant influences on
customers, figuring out how to round up more
your sales output. A simple meeting, a media
should be easy. All of this is easier if you have
sensation, or a post on a Facebook page; each
one product, one Delight factor and one good
can have a drastic impact. The way to go is to
business model. However, in reality, most com-
use promotional channels innovatively to bring
panies don’t just have one product. So consider
in more customers. Think beyond the existing
having more than one sales formula!
strategies and try to invent new procedures
WHEN DELIGHT DECLINES, DO YOU ADD MORE FREQUENCY?
where little inputs in time and minor changes yield big returns.
The most common way to add to sales is to Above all, sales means maximizing revenue and
increase frequency. An interesting observation
profit while delivering your Delight. The best way to secure sales is to first understand your existing sales formula. This sounds intimidating, but sales boils down to knowing where you hope to find your next customers. Begin by recalling where you found your existing customers and reflect how you brought them in. Don’t try to innovate just yet. First replicate the right things you have been doing. Then make a list of the sources from which you get your existing customers. Rank from the most to the least rewarding sources, the quickest to the slowest methods used to obtain customers, and most importantly, rank them in the order of profitability. Do you see patterns that offer insights for your 44
is that when a product becomes more difficult
So here is the challenge! From having one great
to sell, the immediate management response is
product A and one homogeneous set of custo-
to increase frequency. What companies fail to
mers, the company now needs to develop a sales
detect is the decline in Delight, and the rational
formula for an additional product B. Product B
steps to take to increase Delight.
also needs to have a Delight, and show profitability in accordance with the companyâ€™s expectation to increase frequency.
When companies increase frequency, they often expand their target market, and unintentionally obsolete the Delight. Salespeople
This challenge becomes apparent when a
report to their offices that they can no longer
company leaps from one market with one great
sell the existing product, and demand that the
sales formula and unique Delight to either a
product be adjusted to address the expanded
mass-market or several niche markets. This leap
market. From this insight, your product portfo-
demands additions of a different sales formula,
lio is born!
Delight, and profitability scheme. Note that if
customer acquisition your target customers diversify or change, you
and product development teams increase the
also have to change your frequency method.
price of the product with the existing Delight to cover the additional overheads.
The most common way to face this challenge has been to fix sales by adding frequency.
Remember that Delight, Frequency, and Profi-
You set up more meetings and try to convince
tability all have to come together as one for each
even more customers to buy with the same old
and every product your company is offering.
Delight. However, a new Delight invention is un-
Have no exceptions or excuses. Just do it!
avoidable, and this assignment should not only be allocated to the product development team.
Do all of these sound overwhelming and com-
It is the salespeople and not the product devel-
plicated? Take a step back, and ask yourself a
opers who talk to the customers. Do not break
few questions. WHAT do I sell? To WHOM am
the feedback loop. Before you know it, the
I selling and WHY? If you can answer these
accountants come along and suggest the sales
questions, you have a sales formula!
chapter summary â€“ Customers Acquisition A fundamental understanding of the delight
Fine-tune it, get inspiration from how others
you are delivering and a business model that
are working with Frequency, Delight, and Prof-
works are the basics for great sales. Have you
itability. Remove what doesnâ€™t work! Increase
created your unique formula for sales? Then
the value of what works and never forget to
keep your formula under constant surveillance.
constantly prototype and Innovate in sales!
Questions that require an answer: 1. Do you have frequency in your sales formula? 2. Are you proud of your unique sales formula? 3. Do you know where you will find the 50 next customers? The first 20 are not the challenge! 4. Do you have a team that understands the need for constant interaction and prototyping in frequency, delight, and profit?
remember Close more deals by innovating in sales.
From Idea to cash
THE ZERO GAME. NOW IT’S TIME TO INNOVATE ON YOUR BUSINESS MODEL; EVERYONE NEEDS A BUSINESS MODEL. NO MONEY NO CASH NO FUN. IF THERE HAS BEEN A HARD STRUGGLE TO FIND AND DELIVER THE DELIGHT, IT’S NOW TIME TO GET PAID FOR IT. BUT HOW AND WHAT DO YOU CHARGE; WHEN AND WHY? ALSO, HOW CAN YOU CHANGE THE GAME BY INNOVATING IN ZEROS? ON THE COST SIDE: THINK MORE REVENUES, NO COST. IT’S NO MORE COMPLICATED THAN THAT: BY ADDING NUMBERS TO YOUR IDEA AND PLAN IT WILL TELL YOU THE SUSTAINABILITY OF WHAT YOU ARE DOING. WITHOUT NUMBERS YOU WILL NOT BE TRUSTWORTHY!
Without customers: no cash – no fun. It’s one
THE ZERO GAME
thing to track numbers, but quite another to see
Let’s start with the innovation in “Zeroes” and
cash pouring in – in any case, without num-
then run through the basics. If you have an MBA
bers there’s no effective way to assess a busi-
in finance you can skip the second part of this
ness opportunity. Without numbers, you will not
chapter. However, the MBA in your portfolio
know if the needle is moving, if it’s moving fast
suggests you probably haven’t sold anything, in
enough, or whether it should be moving at all!
which case, we suggest you read the customer
Every tip suggested in the other gears in this
acquisition chapter again.
book must be quantified in this gear. No credibility without numbers. However, if you understand
You don’t always have to incur costs! In fact,
your numbers, you understand your business.
it can be an advantage to have no costs! This
Are you hitting your targets? Have you identified
might sound strange, but it is an important strat-
the factors that move the needle? If you’re not
egy. The more innovative you can be in removing
delivering on your plan, it’s time to revisit some
costs the better. We mean zero cost – not just
other gears and shift to plan B.
10% cheaper. For each additional zero you add 50
r Up Gea
to the costs column, the greater the chance
accounts, you have created a disruptive busi-
for you to build a company that will one day be
ness model that could change the world. The
known as a game changer.
Zero Game can also be applied to sales by implementing methods that reduce customer
Without any doubt: The challenge is to ques-
acquisition costs. What needs to be done to
tion yourself on the projects you consider to
get customers for free? If you Delight, this
be “musts” because they are also “musts” for
might actually happen!
your competitors. Securing revenue is one big undertaking but reducing costs to zero could
But in short: Challenge all the rows in your
be even bigger. By striving for the zeros, you
spreadsheet and explore what can be reduced
can add Delight, which has been unaffordable
to zero. Challenge yourself: How can you turn
earlier. You can now see innovation right in a
existing costs into revenues and by doing so,
spreadsheet, and challenge established busi-
what would the customers say? Maybe you
ness models! Once you manage to add mainly
can even get your employees to pay for the
“zeros” to the credit sides in your books of
privilege to work with you!!! 51
business model IKEA is a great example of the Zero Game:
Another example of a Zero Game company is
by adding zeros to their business model, they
Skype. In order to supply Delight via free tele-
changed the game. They challenged the assem-
phone services, there had to be a lot of zeros in
bly costs of furniture by making IKEA customers
the spreadsheet. Let’s compare Skype’s case
fasten furniture pieces themselves. The result?
with traditional carriers: The Zeros’ game might
IKEA got one more zero on their spreadsheet
have the greatest impact on a business be-
while customers got the furniture they loved with
cause it will change the game in an entire given
a low price. By challenging tradition in letting
industry. Therefore, put your mind to challenging
customers assemble their own furniture, IKEA
all cost transactions in the spreadsheet. Ask
also cut the cost of delivery to the stores by
yourself, does the customer need it or want it, or
80%, since non-assembled furniture could be
is it just you who assumes the customers expect
packed more efficiently. IKEA even got down
it? What can be set to Zero and still add Delight?
to letting the customers get the furniture themselves right from the warehouse, and thereby
Ryanair and Southwest Airlines also innovated
saving more on overhead costs. Reduced pricing
in Zeros and changed the game in the flight
was IKEA’s innovation in providing their custom-
industry. For example, instead of paying landing
ers with Delight.
fees to established airports, they got paid to land
Use customers’ broadband
No customer service. If you don’t like it, uninstall
Invoicing cost and post paid
PayPal and prepaid
at airports in smaller cities situated close to
you want to challenge existing structures and
major cities. In addition, both airlines converted
business models, look at companies outside of
the costs of handling luggage into a source of
your own industry. Innovation is as important in
revenue by charging customers checked bag-
the business model as it is in creating and
gage fees. Ryanair and Southwest got the Zero
expanding Delight. The Zero Game is about
inspiration from observing the services a bus
understanding the customer pain.
company provided to its customers. The airline companies realized that the only difference
If you found your Zeroes, how can you
between them and bus companies was that they
then double the price of your product?
offered a much faster ride. Lessons learned: If
if you have an mba in finance you can skip the next section â€Ś 53
WHAT IS THE CUSTOMER PREPARED TO PAY?
Remember: If you are curing a pain, creating
Calculate your price. There are basically two
then you should always aim for value-based pri-
types of pricing:
cing. If you end up with cost-based pricing, you
Delight, and are different from your competitors,
will be backed into a corner with a 15% margin. 1. Cost-based pricing: Here, pricing is based
Keep in mind how many times you’ve heard
on how much it will cost you to develop, manu-
people say: “I would have paid more for it!” A
facture, and sell the product. Add a margin
low price is not always the right strategy!
to cover other costs in your company, and to determined by those margins in use among
WHAT IS YOUR PROFIT? HOW BIG ARE YOUR LOSSES?
similar companies – very much a “Red Ocean”
Based on the price, you can start working on
method of pricing. The good news with cost-
your P&L, or profit and loss sheet. Start with
based pricing is that it’s easy to compare, both
revenue – the fun part! Price times customers.
for customers and for competitors. Particularly
Calculate revenue for three years to assess if
in a B2B type of transaction, the customers are
and when there will be a growth in revenue. This
likely to challenge you on the margins. You can
is easy to do in an Excel sheet, but this is where
try to be discreet about your margins, but they
most companies fail when calculating.
add numbers to your profit. Margin is usually
will eventually figure it out. Next is Cost: You need an office, phone ser2. Value-based pricing: How much is the
vice, and insurance – all examples of overhead
product worth to the customers? This is a
costs. Remember to also add salaries and cost of
pricing model that many companies don’t even
equipment for development, manufacturing, etc.
dare to try. You simply try to assess how much
Again, calculate revenue minus costs for the next
your product will be worth to your customers,
three years. Don’t be discouraged if you can only
which has nothing to do with the cost of your
foresee losses for the first three years. Many high
product. If you are swimming in a Blue Ocean
potential companies stay in the red for several
and/or your Delight factor is high, you can
years. For this reason, you might have to secure
easily employ value-based pricing.
external funding to bridge those first years.
CUSTOMER ACQUISITION COST – HARD TO SAY BUT IMPORTANT TO KNOW Start with your Cost of Customer Acquisition (COCA). COCA includes sales people, marketing people, and marketing campaigns. Different businesses have different needs in terms of sales vs. marketing expenses. At least make sure you are comfortable with the suggested spending for both. We highly recommend you start with sales and move slowly into marketing. It’s hard to create and get attention for a marketing campaign when you’re not yet sure what your customers will buy. Now you need the Lifetime Value (LTV) of a customer, or, in other words, how much revenue you expect to generate from the customer. The LTV has to be higher than the COCA. If there is no hope for your LTV getting higher than your COCA, you have a problem. Don’t try to hire additional sales people until these numbers make sense. If the car is pointed towards a brick wall, hitting the accelerator is not a good idea. Instead, go back to the Pyramid of Customer’s Needs, and assess what can be done on all three levels with an emphasis on Delight.
business model Track detailed data (a spreadsheet is fine).
Your pricing should be in line with your sales
Enter data on the product sold, the name of the
structure. For example, you canâ€™t expect to have
salesperson, date of purchase, market price, etc.
an outside sales force meeting customers if your
This data is of primary importance in assessing
average deal is less than $10,000. The math
whether the needle is moving and will be invalu-
wonâ€™t work long-term if your COCA is always
able later as you start to scale.
higher than your LTV.
Start watching the shape of your “funnel” as
me, which factor will have the greatest impact
early as possible. How many leads do you get
on the future success of the venture?” Sales
in a month? How many turn into real opportuni-
numbers and customer acquisition often stand
ties? How many of these opportunities convert
out as the key attributes to focus on, but there
into paying customers? How many of those
is so much more that demands proper atten-
customers will remain loyal to you and buy more
tion. How do you distinguish among what you
than once? When you understand your “funnel,”
“need to have,” what is “good to have,” and what
you can slowly start tweaking your system to fix
you “must have”? When will you have ques-
the “leaks” and ensure that more sales can be
tions about additional costs, or an additional
opportunity, or entering a new market, don’t forget to ask the fundamental question: “How
MOVE THE NEEDLE! OR WHAT NEEDS TO BE DONE TO BE SUCCESSFUL?
will it move the needle for the company? When
You’ve done the numbers, and that’s good! But
buying new chairs for the development team
have you gotten it right? Calculation is a gues-
so they don’t take sick leaves for their aching
sing and estimation game that may be refined
backs, go back to your needles. Problem solved.
you’re in doubt about spending money to get new customers with a marketing campaign, or
with experience and using meta data. The more effort you put into the numbers, the closer to
reality you should come.
To be able to use the needles on your dashboard, you need to ask: “What do I plan to ac-
But after the calculation is done, it’s time for
complish and by when?”
the more difficult work with the numbers, which is to implement a plan that will make the
Some would call this defining your strategy but
numbers real. This is the time to identify the
we’ll just call it: State your goals! The purpose of
needles on your dashboard and how much they
defining goals is to foster a shared understan-
need to move in order for you to alter your plan.
ding and cohesive behavior within the company.
A more academic way of saying it would be to
However, stated and shared goals are not
call it your sensitivity analysis. Start by ask-
enough! You also need to practice what you
ing yourself: “Based on the figures in front of
preach by defining the path to reach your goals. 57
business model There are three common pitfalls when setting
but are not goals themselves. Letâ€™s use a car
goals. First, you try to define too many goals, or
analogy. In a car, the goal might be to drive fast!
goals are way too vague or complex so that no
You need air in the tires, oil in the engine, and
one understands them or they canâ€™t be transla-
gas in the tank. Regular car maintenance will
ted into collective behavior. A second pitfall is
help you achieve your goal, so keep good track,
underestimating the importance of visualiza-
but no need to take action until the needle on
tion and communication of the goals. You fail to
the dashboard starts to move. When you hold
share the dashboard and the needles with the
an executive committee meeting, the subject
rest of your team. How can you share your dash-
matter should be focused on the goals. People
board with your team? The third pitfall is that the
from your finance department should only pre-
definitions of the different goals are unclear, and
sent if their needles are moving in a way that
negatively influence the data collection process.
calls for action.
In the end it might lead to uncertainty as to Make the goals simple to grasp, and the mea-
whether the needle should move or not.
surements easy to translate into daily activities. Try this instead: Define a few quantitative goals.
Opt for clear and concise definitions of the goals.
Remember what gets measured gets done!
For example, key figures must have clear defini-
However, not everything can be a goal and
tions in order to facilitate the collection process.
some objectives should be understood as points
Remember to continuously monitor whether the
to measure. These points will affect the goals
company is progressing in line with the goals.
chapter summary â€“ BUSINESS MODEL With the numbers, you are much more
customer acquisition-centric strategy and aim
prepared. With the numbers youâ€™ll be able to
for value-based pricing with a unique delight.
strategize your pricing, future investments,
The needles need to be monitored constantly
and the growth path of the company. Strive
with clearly defined goals so every member
for zeros in the costs; seek a mastermind
in your team is at the same pace.
Questions that require an answer: 1. Do you know where you have your zeros? 2. Do you have a pricing strategy? 3. Do you have all the numbers to calculate your cost? 4. Do you have goals set for your business? 5. Do you know what needles to look out for?
remember Cash is created by great ideas and innovation in Zeros.
WHO LOVES YOU? WHO HATES YOU? 60
THE CHALLENGE IS NOT TO FIND PARTNERS, BUT TO FIND THE RIGHT PARTNERS. TO DO THAT, YOU HAVE TO FIRST ASK YOURSELF: WHO LOVES ME? WHO HATES ME? SECOND, YOU MUST THINK IN TWO DIMENSIONS, REVENUE AND DELIGHT, AND WHY EACH PARTNER IS VALUABLE TO YOU. THIRD, YOU AND YOUR PARTNER MUST DECIDE WHAT EACH OF YOU WILL GIVE AND GET IN THE PARTNERSHIP. THE RESULT OF A SUCCESSFUL PARTNERSHIP IS FASTER GROWTH IN REVENUES, PROFITS, MARKET SHARE, AND THE VALUE OF YOUR BRANDS.
Not so fast … there’s a catch. Sometimes the
be the one who is most eager, or the one who
doubling of the Delight Divide that accelerates
is most famous. Lasting partnerships are built
your profits puts your partner’s business model
on a foundation that guarantees both partners
into a tailspin! It’s absolutely essential to under-
will achieve their objectives more effectively by
stand what joining forces with you will do to your
working together than by working separately.
potential partner’s bottom line before you call to
Fame and fondness have little weight in the
ask for a meeting.
success of a partnership.
WHO LOVES YOU, WHO HATES YOU?
Love: Partners who love you want you to suc-
Finding the right partners isn’t easy. In the
cess. How? First, working with you will help them
beginning, you may be blinded by a courtship
to identify or deepen a Delight Divide that will
from whoever shows interest in your business.
captivate their customers. Why else do partners
You may also nurture a dream that the right
love you? Second, working with you will increase
partnership is with one of the big brands in your
their revenue and profit. You can also help a
ecosystem. “How can we fail if we secure a
partner succeed by giving them new weapons to
partnership with Apple, Walmart, or Mercedes-
fight their competitors, decrease their costs for
Benz?” Unfortunately, the best partner may not
customer acquisition and retention, reduce their
ceed. Why? Your success increases their suc-
time-to-market and improve the quality of their
no one in the ecosystem brought it up, that
products and services. Most importantly, if your
customer pain has been resting in peace until
partners’ customers love you, your partners will
you showed up with your great idea. When you
love you too! Instead of trying to identify part-
enter the market, you change the rules of the
ners who might love you, find a hidden pain of
game for your potential partners. Suddenly their
your partners’ customers, and help your partners
customers make new demands like lower prices,
cure it. Having potential partners’ customers tell
better service, added features, faster ship-
stories of how you can help the partners solve
ment, etc. – all of which cost money and create
their problems is the fastest way to bring the
hassles that your partners would have preferred
partners on board.
to avoid. Potential partners really hate you when you are a threat to their existing revenue stream.
Hate: Hard to believe that anyone could hate
They hate the Delight Divide you have uncovered,
you? There are lots of reasons! Even a new,
and they may even be working with one of your
small player can inflict great pain on potential
competitors! And they also can’t partner up with
partners. Your new offering sheds light on what
you, because it will annoy their current partners
they should have done a long time ago. Since
and blow a hole in their business model.
The most difficult situation for a potential partner
occurs when their customers hate you, but their
Every partnership starts with a YES! Let’s face
customers’ customers love you. A good example
it – most companies cannot cope on their own.
of this is Skype. When Skype was first introduced,
You need partners! In our rapidly changing world,
the handheld device providers had every reason
product cycles shorten as companies focus,
to partner with Skype. Skype’s message that the
specialize, and differentiate their core missions
“whole world could call for free” didn’t bother
and outsource tasks to partners. Partnerships
device manufacturers. After all, customers had to
are crucial to the growth of your company. Every
buy handsets to make all these calls. The chal-
partnership should be evaluated by two dimen-
lenge was that their customers, the wireless
sions: Revenue and Delight. A partnership should
carriers, hated Skype. All this free calling cannibal-
directly contribute to increasing your revenue or
ized their profitable long-distance calling business.
serve as a distribution channel for your company.
Sometimes, who loves you and who hates you has
In addition, a partnership should bring about an
nothing to do with you. It’s all about the intricate
increased understanding of your product, supply
relationships among other players in the eco-
chain, market, etc., or increase the possibilities of
system. Key points? When considering potential
offering a unique and sustainable Delight to your
partners, think about the impact that partnering
customers. You should always have an optimistic
with you will have on all of their other partnerships.
view of a partnership. No company, large or small, has manufactured a product that addresses the
Potential partners who hate you behave a little
pain of their customers without other partner en-
bit like penguins standing on the edge of an
tities. Don’t ever try to do it all by yourself!
ice cliff and peering down at the shark-infested waters. Although everybody is hungry and wants
When creating a successful partnership based
to go fishing, nobody wants to become lunch for
on the Revenue and Delight dimensions, consis-
a shark. In case you’re wondering, you are the
tency and dependability are the essential ingre-
shark! No one will take the plunge unless one of
dients. A sustainable partnership withstands the
their competitors makes the first move. At that
test of time. Although a contract symbolizes and
point, they all hit the water, hoping against hope
binds the deal, there is no need for it to define
that they will still get the fish and someone else
the implicit mutual benefits. Many partnerships,
will become shark bait.
with great prospects for success, are announced 65
partners with big bells and whistles, but fade away over
Partners; other examples include seasoned en-
time. Gives and takes are pretty on paper, but
trepreneurs and organizations like the Chamber
the promised Delight to customers cannot be
of Commerce. As we have already emphasized,
delivered if mutual understanding and benefits
partnerships take time to build and maintain. It
cease to exist between partners. Each partner
is not easy to go out on a limb, but easy to add
sides with a new different solution, and the
another partner for learning. It is effortless to
partnership crumbles and dies.
justify the addition of another learning partner since you can always learn something from
anyone. The challenge lies in measuring and
In the early days of a company, there is excite-
evaluating the benefits from learning-based
ment that at least one other company is inte-
partnerships. In other words, how do you assess
rested in what you are up to. The other party can
how valuable the learning has been from each
contribute to your learning, and even heighten
new partner? Therefore, let us move upwards
the recognition that you will be delivering a
in the matrix and focus on the partnerships that
certain Delight. It is like working with buddies
add to both your revenue and distribution. These
you’ve known since you were toddlers playing in
partners are easier to evaluate and justify in
the sandbox, but you eventually have to let them
go. Why? They give wonderful suggestions and feedback, and are fun to have around, but they
have distracted you and stopped you from
These are partners who are not of any delight or
achieving success. However, keep on being
learning. Spam partners are more of a nuisance,
good buddies with them! You can take their
but they add money to your chest by dissemina-
calls and keep their logos on your website, but
ting your product to a large market. They will add
don’t waste any more resources on them. We
frequency indiscriminately and in most cases,
call these individuals Playmate Partners.
potential customers will either not pay attention or get irritated. Spam partners are one channel
from which your message reaches a big audi-
Learning Partners hone your ability to improve
ence with minimal costs, but their customer
in all dimensions necessary for growth and suc-
acquisition is an unsophisticated way to obtain
cess. Universities are an example of Learning
the “100 knocks.” 66
AMMO IN A WAR
product. However, you are toasted when you
The partnerships where you are Ammo in a War
cannot deliver or someone else can provide
are perhaps the hardest ones to identify and
the same service much cheaper. As long as
assess. You are the ammunition in someone
you have them on your side, you are the envy
else’s war! What does that mean? It means
of all of your competitors. However, be care-
your product is helping another company fight
ful what you wish for! They can also lead you
off their competitors. So how is it useful to
to complete destruction when they no longer
you? First, you get more revenue. Your product
enjoy your company. Walmart and IKEA are
will expand to a larger target audience as the
examples of some large corporations/partners.
company on the battlefield distributes your
Jurassic Partners will always do what is in their
merchandise as an add-on to their goods. You
best interest; not yours. They will deliver value,
also buy into the company’s large customer
but make sure that your Delight is communi-
base with little costs as their customers realize
cated whenever they are involved. Ask yourself
that they also need your product. Serving as
if you are just a vendor or are you involved in
ammunition in someone else’s war is intimida-
a partnership? If Jurassic Partners really love
ting, but it can be quite rewarding. You are
your product, they can go from being your best
parachuted right into the heart of a new mar-
partner to developing their own similar product
ket and your product is repositioned to provide
and integrating it in their solution.
another unique Delight. Work closely with this partner; this might be your first step to formuliz-
ing a strategic partnership.
Love or Hate Partners are the tough ones to evaluate. In some ways they resemble the situ-
ation of being ammo in someone else’s war. In
Your Jurassic Partners are the juggernauts of
fact, Love or Hate Partners are not difficult to
your market or industry. They represent the “big
find. They are the giants in any given ecosystem,
bites the small” in a “Red Ocean,” and these
and the juggernauts in your industry. The chal-
merciless players can change the rules of the
lenge question is, do you trust them? Are you
game in a heartbeat. So imagine having them
their strategic partners, or their pawns? It boils
in your partner portfolio! Your product has a
down to whether they love you or hate you. You
Delight that they need to secure alongside their
have to play your cards right, but what if they
REVENUE DELIGHT MATRIX
Partner’s Potential to secure REVENUE
Love or Hate
Ammo in a War
Partner’s Potential to help you develop your delight
their own? Remember that Love or Hate Partners
WHAT CAN YOU GIVE AND WHAT WILL YOU GET?
have the resources to do so.
In any relationship, especially business, you have
consider shelving your product or even building
to give something to get something. We will call
anything of value that a partner “bets” on a joint
A Love or Hate Partnership is not consistent over
venture a “stake,” like a player’s stake in a poker
time. This type of partnership will either transform
game. The partners are betting that pooling their
to Jurassic or Strategic. The characteristic for a
resources will increase the revenues and profits
successful partnership is that there are mutual
of both, faster than they could do on their own.
benefits from both sides. In addition to having
Both partners usually venture stakes that are
clear gives and takes, both partners should be
abundant for them, hoping to get back stakes
similar in size. If you are a new company and your
that are rare and difficult to imitate. The more the
partner is an influential player in the market, you
partners complement each other, the more valu-
may end up in a Jurassic Partnership where you
able the partnership is for both sides.
need them more than they need you. For example, 80% of your revenue comes from your partner, but your product in their portfolio only amounts to 1% of their revenue. Therefore, you will not get sufficient attention from their management or resources to further develop the partnership to become future strategic partners. Strategic Partners are generally a few chosen ones.
POISON PARTNERS When you realize that forming a partnership has huge drawbacks, decline any further partnership conversations gracefully. Exit on a friendly note; you never know when you may need to approach the same candidate again. In a distant future, even Poison Partners may prove beneficial for your cause. 69
The Partner Give-Get Matrix Potential Stakes to bet on the Partnership
Partner can give
Partner can get
Mobile Operator E Gaming Company
Gaming Company E Mobile Operator
Technology (product, platform, and process technologies)
Access to infrastructure
Resources (money, time, talent, and knowledge)
Relationships (with customers, channels, investors, government)
Reputation (visibility, credibility, brand equity)
Fun and image
Core Competencies (critical capabilities for execution)
Factors that can make or break a Partnership 1ďż˝
Access to customers
More revenue from customers
Chemistry of Key People (culture, character, personalities, values)
Understanding local culture
Understanding younger demographic
Company Vision and strategy (purpose, mission, values)
How do we use the Partner Give-Get Matrix? Use it when planning for a negotiation with a new partner or existing partner: 1. Put yourself in the partnerâ€™s shoes 2. Fill it out the way you think they will. 3. Then fill out another Give-Get Matrix from your perspective. 70
chapter summary – PARTNERS Partner or perish! You can have partners in
partners. First, who loves you? Who hates you?
manufacturing, R&D, product development,
Second, how does each partner contribute to
sales, distribution, and customer support. There
your revenue and delight? Third, what will you
are three things to consider when identifying
and your partner give and get in the partnership?
Questions that need an answer: 1. Do you know who loves you and who hates you? 2. Do you know why? 3. Do you love the partners who love you and avoid those who hate you? 4. Do you know how the partners will contribute to your revenues and profits, and develop your core competences? 5. Does your “Give/Get” story have a clear and compelling value proposition for your potential partners?
remember Love or Hate is what your partnership is about.
big beats the small or fast beats the slow 72
THERE IS ALWAYS COMPETITION. PERHAPS NO ONE IS COMPETING DIRECTLY WITH YOU WITH A SIMILAR PRODUCT IN THE SAME MARKET, BUT YOU DO HAVE COMPETITORS. THEY’RE LURKING EVERYWHERE BECAUSE BUSINESSES ALWAYS COMPETE FOR CUSTOMERS’ TIME AND MONEY. THE QUESTION YOU NEED TO ANSWER IS: “WHAT ELSE COULD MY POTENTIAL CUSTOMERS DO WITH THEIR TIME AND MONEY?”
You don’t have any competitors? This may
Delight is what you should focus on. That’s how
happen for three reasons. One, you are ignorant
you create something so special that you will
– which is the most common case! Two, you
blow away your competition. Focus on adding
have identified an opportunity that is so small
Delight to your product and your competitors will
that no one else is interested. Three, your idea is
not pose any threat.
brilliant! You have actually discovered a hidden rence between the last two scenarios is often
BIG BEATS THE SMALL OR FAST BEATS THE SLOW?
slim. Though the idea may sound lame, it could
One way to test how much attention and inte-
be brilliant! Perhaps you are alone! But beware: if
rest you need to show your competitors is to
it sounds brilliant, you are probably not alone and
answer the following: “In the market space that
others are thinking about it. For most companies,
I am trying to capture, is it the big that beats
competition is all too clear and present.
the small, or is it the fast that beats the slow?”
market – hats off! You are a genius! The diffe-
Fundamentally, there are two types of markets One of our colleagues claims that: “There is no
that will determine what type of competition you
competition until you make more than 10 MUSD in
are facing. Either you swim in the calm waters
revenue.” It means don’t waste any time or resour-
of a Blue Ocean, or your opportunity lies in the
ces on your potential competitors. We strongly urge
storm-tossed, shark-infested Red Ocean. The
you not to focus too much on your competitors:
terms Red and Blue Ocean were first used by
be aware of what they do, don’t try to copy them,
W. Chan Kim and Renee Mauborgne in the book
and don’t be too impressed by their existence.
“Blue Ocean Strategy.” In a Blue Ocean, you are 74
pretty much the only fish. That’s why it’s blue
to your own to buy pretty much the same product
– there has not been any killing of competing
they were buying elsewhere?” The value propo-
species turning the water red. Others have not
sition that will convince customers to make the
yet discovered this market. But trust us, they will!
shift to you could either be a bit more value, or
Therefore, if you are in a Blue Ocean, you can be
a cheaper price. You align your whole company
small but you need to be fast, because the fast
with your decided value proposition, and outper-
beats the slow. You have to be fast in marking
form the chosen competitor.
your territory so that any incoming competitor will
know you got there first.
But the Blue Ocean opportunity sounds perfect,
where competition is irrelevant! It sounds like the
In a Red Ocean, you are one among many
best water to swim in!!! Unfortunately, it sounds
companies trying to survive while competing with
easier in theory. Why? With a new product, you
pretty much the same product. Your challenge is
need to create new demand. You are trying to
to convince potential customers to switch from a
get people to buy a product that they have not
product they’ve been buying, perhaps for years,
heard of, or understood. You require them to
to your product. That is a challenge! Just like in
change their behavior, or even question what
any other ecosystem. With a newcomer each day,
they’ve continuously consumed for years. To
someone is left to die.
achieve this momentum you will have to educate your customers. You might even have to invent
The good news for the Red Ocean fish is that
a set of terms in order to explain the new pro-
there are already established species, rules and
duct you’re offering. You need to convince your
alliances. If you are an incoming force you can
necessary partners that there’s something in it
easily evaluate and follow the rules; the tricky
for them. In fact, it is something they have never
part is that you also have to grow up fast, be-
imagined before. In order to make it in the Blue
cause in a Red Ocean, the big always beats the
Ocean, you need to educate your customers,
small. A company in a Red Ocean market space
while pursuing differentiation and low cost.
has to work on exploiting existing demand. The question you should ask: “Who are the customers
Many times, a Blue Ocean resembles the top of
you can poach from another company and bring
the pyramid of customer needs. The functionality 75
Red Ocean Strategy
Blue Ocean Strategy
The big beat the small
Fast beat the slow
Beat the competition
Exploit existing demand
Create new demand
Make the value/cost trade-off
Break the value/cost trade-off
Differentiation or low cost
Solving problems in a new way that makes it better and cheaper
competitors and efficiency of a product in a Blue Ocean
swam over, and turned blue into red with fierce
might be the same as that of a company com-
competition. But there was the small fish swim-
peting in the Red Ocean, but the difference lies
ming in a different direction!
in the Delight factor. Think again: “Do you have the right people on board for a Blue Ocean?”
Red Ocean incumbents laughed at that small
and “Are you strong on your Delight?” Your suc-
fish for lame ideas like adding a larger screen,
cess in the Blue Ocean will lie in offering your
and not having a tap-on keyboard. The small fish
Delight at a lower cost than comparative offer-
staked out his territory and kept on working on
ings in the Red Ocean. Note that it is easier said
the Delight factor, and the company became the
than done! However, it is definitely doable! The
big fish that established a whole ecosystem on
greater your Delight is, the harder it will be for
its own, and the name of the company: Apple!
other companies to copy it, which will then create a sustainable advantage for you.
GAME CHANGER OR OUTPERFORMER?
Never forget that every Blue Ocean will even-
If you are comfortable in a Red Ocean, you need
tually turn into a Red Ocean. For example, the
to beat everyone else in a market who is already
handset market was very much a Blue Ocean
established, and have already defined territories,
in the beginning. The Delight factor was huge!
so you are always the “new kid on the block.” If
Suddenly you didn’t have to be tethered to one
you choose that future path, you have to be-
place by a plug in the wall to talk on the phone.
come the most extraordinary Outperformer in
You could walk around, get a snack, and even
your market. Your success is built on your ability
travel while you chatted away. People loved that!
to win what we call an “uphill battle.” The best
No one at that time was considering whether
way to explain this phenomenon is to say that
to get rid of their land lines. Cell phones were,
your success is determined by your capability to
purely and simply, a complement to the Plain
charge up with long-lasting batteries and keep
Old Telephone System. A Blue Ocean with a few
on going until all your competitors either have
small fish, and nobody in the Red Ocean was
surrendered or died. You will then be the market
paying attention. Eventually, the big fish in the
or profit leader. But remember, if you look away
Red Ocean – the carriers and the established
for just one second, or your batteries were not
phone manufacturers – started to pay attention,
fully charged when you started, your competi78
tors will overthrow you and you will lose your
himself as a Game Changer, his customers
position as the leader.
approached him, instead of him having to approach his customers. The good news is this is the best-case scenario. The bad news is your batteries better be of the most long-lasting kind. Even if your long-term goal is to become a Game Changer, it is sometimes inevitable that you’ll end up as a good-enough Performer in the Red Ocean. But remember that most companies are in a Red Ocean with some kind of twist that increases their likelihood of survival. Many in the Red Ocean would like to wake up one morning and be a Game Changer. What about you: are you really a Game Changer or an Outperformer dreaming about a Blue Ocean?
But let’s say that you’d rather spend your time and your resources in a Blue Ocean. Once again, in a Blue Ocean the rules are not yet defined: you might be the only player in sight, a market may or may not be established, and your mission is to become a Game Changer. In this case, you can look away for a second without losing anything. If you are a Game Changer you will, as one entrepreneur explained, “get more customers when the office is closed.” Now once
p rU Gea
that entrepreneur had successfully established 79
Red Ocean Strategy
Blue Ocean Strategy
Traditional academic literature
Delight the author
Delight the readers
A circles of authors
The thicker the better, strive for 500 pages, with a lot of words and many examples
Only 100 pages with a lot of illustrations. Short and consistent
Academic/Top management audience
Everyone with an idea is the audience
Best of Ivory Tower and Street Smart
A complement â€Ś to different truths
Unrelated books, in size and concept
Same concept and format
The author is a time teller
The authors are builders of clock builders
chapter summary â€“ COMPETITORS There is always competition, either now or
a Game Changer that will thrive and create
in the future! The big battle always comes
a Blue Ocean. Be small and fast, and secure
down to the competition for customersâ€™ time,
your position in the developing ecosystem
money, and attention. Your success is de-
so that when the blue turns into red you are
pendent on your delivery of Delight. Beware
no longer small and fast anymore, but big,
that everything can be copied (even if you
slow, and, unbeatable, or have moved on to
have a patent!). Position your opportunity as
a new blue ocean.
Questions that require an answer: 1. Do you know your competitors? 2. Do your competitors know about you? 3. Is your opportunity in a Blue Ocean? 4. If not, can you turn it into a Blue Ocean? 5. If not, do you know how you will outperform your competitors in a Red Ocean? 6. Do you have a strategy to turn your offering into a Game Changer?
remember The small game changer can beat the big outperformer, but the slow can also beat the fast.
Good ideas have no BOUNDARIES
REMEMBER: GOOD IDEAS SEE NO BOUNDARIES! AND WITH THE INTERNET, YOU HAVE TREMENDOUS OPPORTUNITIES TO REACH OUT. WHY SHOULD YOUR HOME TURF BE YOUR ONLY MARKET? IMAGINE WHAT YOUR VENTURE WOULD LOOK LIKE IF YOU COULD MAKE IT IN CHINA, BRAZIL, OR SOUTHEAST ASIA! SUGGESTION: GO BACK AND REVIEW THE GEARS WITH THE WHOLE WORLD AS YOUR MARKET OPPORTUNITY!
SCALE YOUR BUSINESS
is a transition. People who previously have had
To go global means to scale your business. To
strong positions on the bus might have to move
scale means to add more customers to your
to other seats, or get off the bus. New infrastruc-
customer base. To scale also means taking the
ture and processes have to be implemented.
risk of adding more people and more costs to
The original team then starts to grumble about
the company. Very few companies have been
the “good old days” when they were crammed
fortunate enough to be able to scale without any
in small offices with no heat or air conditioning,
additional costs. But remember the zeros game
and furniture was rented or borrowed. In fact,
we introduced earlier in the business model gear.
it’s all exaggeration!
There is no reason to add numbers to that zero unless it increases your market share. But to be
It was pretty tough back then, but it is fun and
realistic, most companies not only have to add
exciting now! In order to capture Global Markets,
new costs to their existing spreadsheets, but also
you need to understand other cultures. That is a
new types of costs like travel, costs for office
challenge for almost all of us. We all know how
space abroad, translation fees for websites, bro-
hard it already is to build trust in a culture that
chures and user manuals, etc. And not only that,
we know, but imagine how hard it would be to do
the team will need new members: people who
that in a different country where people speak
know other languages, other cultures and have
another language and the expectations of your
different backgrounds. For many companies, this
product, your company, and your team might be
Ge ar Up
ILLUSTRATION scale your business aPproximate size, but shape can differ
different. There are also differences in regula-
need to understand when you’re trying to capture
tions, tax structure, and labor laws. You’ll start to
a new market: Player, Stake, and Provincial Code.
get a sense of the challenges.
“Players” are companies, institutions, and people of importance for your success in a new country.
CIRCLES OF INFLUENCE
“Stakes” are the local currency used in the new
In order to understand new regions and countries
place; currency not in the sense of money but in
where you want to do business, you can use
the sense of bringing along whatever you need in
Circles of Influence. There are three things you
order to be taken seriously. Be aware that money 85
go global is not enough. Finally, you need to comprehend
garded as key Players in Silicon Valley are those
the “provincial code,” or how business is done in
with a local presence and with relatively limited
the new place. When you fully recognize all three
global outreach. Think about it, who loves you
components, you are in the “Sweet Spot,” which
and who hates you in the next market you want
means you’re ready to launch your venture in the
to capture? Make a list and find a friend, some-
one on your team, or our website to understand if those who you want to approach as partners
PLAYERS OR THE VIPS OF A PARTICULAR PLACE
in that new market are friends or foes, players or not players.
It’s easy to just assume that the same partner institutions, organizations, and players that are of
PLAYERS BET THEIR STAKES
importance at home will have the same impor-
This is what you have to bet in order to be ac-
tance abroad. Trust us: this is rarely the case!
cepted and eventually be included in the local
You can divide players in a particular place into
ecosystem. As we mentioned above, money is
two main categories: Important Local Players
often not enough. We have watched impres-
and Important Global Players. Keep in mind that
sive multinational companies trying to establish
a Global Player doesn’t necessarily have to be
themselves in hot spots both in Asia and in
an important local player. Let us give you an
the U.S. by supporting localization with a large
example: in Silicon Valley, a very important group
amount of money, but without much success in
of Local Players are law firms. Their involvement
establishing themselves as Players in the region
in the initial phases of a start-up: connecting
in question. Let’s give a few examples of Stakes.
aspiring entrepreneurs to the support structure
First is Passion: you need it without any doubt!
of the region, and playing an influential role in
If the multinationals have had problems, we
Silicon Valley. OK! So law firms are important,
have with amusement seen small startups with
but not just any law firm. Attempts have been
a passionate team getting meetings with top-
made – more or less successfully – by pres-
tier VCs in Silicon Valley and getting the atten-
tigious law firms from the United States East
tion of Cisco and Intel. If you’re smart and you
Coast to set up offices in Silicon Valley. Many
can show how your pool of talent can be turned
are still doing business in Silicon Valley, but they
into an advantage for a particular place, you are
are not Players. Instead, law firms that are re-
safe. The same logic applies to customer rela86
tions and reputation. In the list you have created,
The provincial code is like the etiquette for
add the stakes that you need to risk in order to
conducting business in a certain environment.
get to a partnership with existing players.
The roots of the provincial code are based on the overall culture, traditions, and values at
To get players to bet their stakes on
play. If you understand and follow the provin-
your venture, youâ€™ve got to know the
cial code, you will earn peopleâ€™s trust, integrate
provincial code â€Ś
more quickly into the environment, and have less 87
go global anxiety about encountering challenges and difficulties. The rules for “correct” behavior will vary from place to place. The easiest way to learn the Provincial Code is to shut up, observe, and ask friends and colleagues what you can ask for, and how to ask, etc. Remember that the Provincial Code is both explicit and implicit, both verbal and written, and is present in public and private. The tricky part with the provincial code is that it might be different in distinct ecosystems within the same region, e.g., the gaming industry vs. the biotech industry in Singapore. Sometimes a good start for identifying the Provincial Code can be to read “Lonely Planet”! A lot about the code is closely related to the culture overall in the region. Next thing is to get to know the business side more closely. One way of doing that is to contact Chambers of Commerce or any other country- or industry-related organization for that country. Don’t forget your college roommates, your backpacking friends, and your Facebook groups. Via all these sources, you’ll be able to learn a lot about the code. What’s in it for those you ask to spend time helping you understanding the code? p rU Gea
chapter summary – BORN GLOBAL Always have an ambition to go global! At
the same time be humble. Different cultures,
least that will give you the reason to explain
different players, stakes, and provincial code
to yourself and others: why not? A go-global
in different parts of the world will influence
company needs more resources and new
your business and how successful you will
types of resources, and takes time from
be. Start small with a market not too far away
what is already currently running within the
from home. Learn from the mistakes and
company. Have faith that you can do it, but at
formulate your approach for “the next level.”
Questions that need an answer: 1. Is there a global market for your pain? 2. Do you know where in the world you have your next market? 3. Do you know why you should not go global? Not good enough? 4. Do you know how you can learn about the Circle of Influence in places that you are interested in (friends, colleagues, books)?
remember Boundaries have never stopped good ideas.
GET the right People on the bus 90
Up ar Ge
“So what do you do?” It’s the first question many people ask about a new venture. Wrong question! The right question should be: “Who’s on your team?” Here’s the catch – you can’t do the “what” without the “who,” and you can’t know the “who” without the “what”! SO FROM DAY ONE, YOUR HIGHEST PRIORITY IS TO ASSEMBLE YOUR TEAM. It’s all about “getting the right people on the bus,”
have a rough idea of where you’re headed, but
as Jim Collins phrases it in his famous book
the route may change along the way. More
“From Good to Great.” Think of your company
important than the destination is who to take
as a bus you’re about to take on a road trip. You
along for the ride. So who do you want on the
The Delivery Man
bus? In any venture, the most crucial attributes
better than you’d be if you tackled their jobs –
for the team are world-class hardcore talent,
and your bus will head for the finish line with all
ability to deliver, non-parallel out-of-the-box
cylinders firing. What types of hardcore talent do
thinking and personas.
you need in order to get rolling? But remember: talent is not enough!
THINK HARDCORE TALENT! Without the right talent, your company can do
ABILITY TO DELIVER
nothing. The talent of each person on board,
All the talent in the world will get you nowhere
including education, training, experience, and
unless it includes the ability to finish the job.
aptitude, will add to your company’s hardcore as-
Make sure the people you bring on board will not
sets. Surround yourself with teammates who are,
only deliver the goods, but will also bring along
at best, world-class talents – or at the very least,
an attitude that works for the company. Many
team a great venture has been driven into a ditch by
These are: Innovator, Evangelist, Producer, Ad-
highly talented people who fail to deliver. All the
ministrator, and Integrator. If you skip even one
skills in the world will not help a player who can’t
key player, your team will be incomplete.
work with people, or who crumbles under pressure. (This road trip is not for quitters. To reach
The Sparks of a Genius
the target destination, everyone on board will
First in line is the Innovator, whose flash of
have to perform in spite of the stress that comes
genius sparks the whole enterprise. Consider
with roadmaps, deadlines, setbacks and launch-
Newton, Edison, Van Jacobsen and, Bill Joy –
es.) Remember, you don’t just need people who
all four stellar innovators – all who mastered
are world-class smart – you also need people
the art of non-parallel thinking in their fields.
who are world-class deliverers.
Perhaps your innovator is as extraordinary as Newton and his friends, in which case, what are
NON-PARALLEL CREATIVE THINKING
you waiting for? For the rest of us there is still hope. Some of the most worthy ideas will ad-
Non-parallel thinking is a conglomerate of a
dress everyday problems – or even a new twist
dream, a vision for the company, and a large
on a tried and true solution.
dose of passion. Here is where the masterminds a company creates its destiny. Non-parallel thin-
Every Team Needs an Evangelist
king is the ability to think beyond and challenge
Once you have your concept, it takes a certain
all existing truths and time-tested solutions.
kind of persona to grab that idea, leap off a cliff
Figure out when and how the not-yet-invented
with eyes wide open, and talk about it all the way
will be discovered.
down while trying to land in the right place, at
of a business opportunity excel. Here is where
the right time, and with the right equipment. This
is a persona with passion, vision and a nothing-
The three core attributes mentioned above have
is-impossible attitude who, even after a crash
to be encompassed in what we call Personas. A
landing or two, can transform the idea of the
useful strategy for building your team is to make
Innovator into a fully formed venture. Let’s call
sure it includes five Personas. Each of these five
this uniquely deranged yet essential persona the
character types will play a key role on the team.
Evangelist. In most other places for the last few 94
centuries, evangelists have been salespeople for different religions of the world. It has been said that they have a belief in things unseen. Just as any prophet has to sell the idea that becoming a follower will lead to peace and happiness, the entrepreneurial Evangelist has to convince the team, customers, investors, and other stakeholders that this new venture is the best of all possible paths to business nirvana. Often the Innovator in a company will also play the role of the Evangelist, and the combination of these two personas becomes the Entrepreneur. So what makes a good Evangelist? An Evangelist must have passion for customersâ€™ pain and be creative about how to cure it. The Evangelist has to love this challenge so much that she will often sacrifice friends and family to ultimately change the world. The Evangelist doesnâ€™t mind flying economy class, staying in cheap hotels and eating nothing but instant noodles â€“ money is not used for comfort, but for projects to move forward the business. An Evangelist must be the spin doctor of growth. For the Evangelist, there is logic in the impossible task, and always a clear road ahead. The Evangelist can spin a really good story about any product. It is usually so good that people listen and are delighted to re-tell the story to their Gear Up
friends. An Evangelist can fail and move forward 95
team without missing a beat. Mistakes are a part of
towards that lofty goal until a product is ready
doing something most people think is impos-
for a beta test. With an understanding of one
sible because each one will bring the solution
another’s complementary talents, they’ll work
closer. Not that Evangelists love mistakes – who
well together in the garage phase of a company.
does? But the good ones are prepared to face
Perhaps they’ll be quite happy with themselves
them, learn from them, and even shoulder the
and with their accomplishments – until they get
blame. An Evangelist must show grace under
their first real order. Once the celebration is over,
fire. Companies are stressful – failing companies
they run smack into the process challenge.
even more so. Will the product ever work? Do someone steal our intellectual property? Evan-
PROCESSES START WITH THE ADMINISTRATOR
gelists manage to live in a world full of these
Process problems arise when you need more
questions. They show optimism and a sense of
people on the team to start doing business. This
humor when it seems all is lost, and convince
is when the company shifts from a “garage-cen-
employees and investors to stay the course long
tric” approach to a “process-centric” approach.
enough to weather the storm. But if the Evan-
With more staff, roles have to be defined, tasks
gelists do not surround themselves with other
outlined, methods agreed upon, and forms filled
types of personas, their dream might just be a
out while more people are hired and deployed.
we have enough money to make payroll? Will
dream. Especially for the persona of the Innovator, this
is a difficult time. The lovely vision has to be con-
While the Innovator and Evangelist, or Entrepre-
nected to real-world goals, and scaled to actual
neur, make great starters of a business, this is
production. The patina of perfection might be
far from enough. For a successful launch, a busi-
dimmed but the course has to be followed – the
ness needs a variety of personas. The Entrepre-
company needs to grow or perish.
neur now needs to recruit someone who, instead of developing the ideas endlessly and preaching
At this crucial moment, the Administrator, a
on and on about them, actually creates a product
fourth persona, makes an entrance, and brings
or service. This magical being is the Producer.
structure where chaos has ruled. The Admini-
These three personas can work a long way
strator will demand schedules, budgets, and 96
follow-up plans â€“ much to the horror of the
personas have again seen the light (most likely
dreamers who came before. On the other hand,
a different light!), and the level of frustration in-
a new serenity is introduced to the company,
creases. The Administrator soon learns that the
along with binders, databases, and administra-
rest of the organization is following different
tive resources. This new calm might even last a
paths, and everyone is optimizing the functions
while, but it canâ€™t go on forever. While the Pro-
they have been put in charge of. Before they all
ducer connects the dots and implements the
stumble under this pressure, itâ€™s time to bring in
tasks as quickly as possible, the original two
the next persona: The Integrator.
Try to map your dream team in the cube
a challenge for these strong-willed personas
The Integrator is a company’s center of gravity.
to interact and move in the same direction. The
She negotiates among different departments,
tension will rip the heart out of you and burn up
responds to changes, and focuses on the overall
hours and hours in negotiating, debating, con-
strategy with the goal of keeping the whole orga-
vincing. Explaining the different needs, debating
nization on the same page. For example: suppose
the customer pains – it will hurt, but it will result
these personas were asked to build a coliseum.
in progress. However, you will be moving forward
The Administrator would first pay attention to the
at a more rapid pace than you believe because
rules: building permits, where to place the nice
the personas secure the future of the com-
seating, required working conditions for the em-
pany; the Evangelist and the Producer build the
ployees. The Producer would define the process
delight. The Administrator pays the taxes on time,
and the deliverables, and set up the appropriate
makes sure you have enough inventory, keeps the
process for the team to execute with: how many
company on track – all the while the Integrator is
workers? How many bricks and wheelbarrows?
running back and forth, bridging eventual gaps.
When to bring contractors into the process? The Integrator would pay attention to every aspect.
Many people have one really strong persona but
He would have suggestions for how the building
in most cases one person might cover multiple
process could be accomplished faster and with
roles – especially in the beginning, when the
more efficiency for all involved. The Entrepreneur
team is small and the work is very much people-
has probably wandered off: “Ditch the coliseum!
centric. A waste of time and resources would
Let’s develop a multi-purpose building with a
result from encouraging an individual to fulfill the
virtual component.” In order to have a team, a
role of a persona where they are weak. Instead,
company – large or small, new or old – needs
encourage every team member to focus on their
all of these personalities. Think about it! Do you
most effective personas and strive for bringing
have the core personas presented above?
complementary talent, attitude, and non-parallel thinking to the table.
YOU WILL NEVER HAVE YOUR DREAM TEAM! Even if you have the above, your group might not seem like the team you imagined. It’s always 98
chapter summary – TEAM Getting the right people on the bus is not an
business starts to grow, it is of utmost impor-
easy thing. The biggest asset you have when
tance to add the personas of Producer, Admin-
starting and growing your business is the people,
istrator and Integrator. Now you can visualize
i.e., the team. Nothing can take precedence
your Dream Team, but before you go ahead
over the core value of having exceptionally
and invite them to join you on the journey, there
good talent and team members who can deliver.
are a few questions you should answer. If your
The Innovator and the Evangelist are usually
answer is NO for any of the questions below,
the first two on the team, but as soon as the
you need to reassess your team.
Questions that require an answer: 1. Do you have world-class talent with the right attitude on this team? 2. Have you set the bar high enough and refuse to “settle” in selecting the team? 3. Do you have the courage to throw people off the bus? 4. Is the true DNA for this venture mirrored by the team? (i.e., you are not trying to make bankers out of bikers) 5. Can the Evangelist step off the bus for a while and know that the team will steer the bus in the right direction?
remember Fill your bus with the right people, or you are going nowhere.
only the truth sounds like the truth 100
BY NOW ALL THE GEARS YOU’VE WORKED WITH SHOULD BE WORKING ON THEIR OWN AND IN SYNC WITH EACH OTHER. ONE SMALL QUESTION THAT UNFORTUNATELY CAN HAVE HUGE CONSEQUENCES REMAINS: WILL IT REALLY WORK? HAVE YOU LAID OUT THE GOOD, THE BAD, AND THE UGLY, OR HAVE YOU DELUDED YOURSELF AND YOUR TEAM? IS THAT BEAUTIFUL HOCKEY STICK IN YOUR BUSINESS MODEL A REALITY? ARE THERE MANY MOVING PARTS? CAN YOU ACTUALLY REACH THAT GLOBAL MARKET FROM YOUR GARAGE? AND, REALISTICALLY, WHAT ARE THE ODDS THAT WALMART WILL BECOME YOUR PARTNER?
The beauty of reality-checking your opportunity is
your weak points? There needs to be Passion,
not primarily in the plan of action for handling the
but that is not enough! There also needs to be
risks, but the value in the planning itself. In short,
logic attached to it. It is easy to get carried away
you might say that a reality test of your business
and enjoy the passion, but the beauty (maybe
opportunity is like doing an interrogation.
also the scary part) with doing a Reality Check is that it gives you an opportunity to test if there is
HIT WHERE IT HURTS: THE BRUTAL TRUTH
logic, and if it makes sense.
Why are you doing it? Money, fame, fortune, or
So let’s start the game of reality!
just a burning desire to solve a pain you know exists? In fact, in the end it does not matter. The
more important question is, can you find the en-
Have you secured a world-class team that is
ergy to go beyond? Let’s face it. Why should you
suited to your opportunity? Ask yourself: Who
make it? Most ideas don’t! We salute all you idea
else would hire the members of my team? The
makers, but let’s be honest: the probability and
follow-up question is, why are they here with me
statistics are generally not in your favor! What are
instead of joining those well-known companies?
have heard people pitching ideas based on only their own needs or desires. If that is the case, you have a passion for solving your own pain, and it’s not enough! Your passion needs to solve a more widespread pain. Remember what we stated in the Customers chapter: if you can ride with them, then you can sell to them. If the pain is only your pain, then there’ll be no market. What you have is not a company but a hobby project.
DELIGHT Be honest about your ambitions. If you want to
Do you really have a delight or have you just
win the World Series, you will have to replace the
added yet another function and believe that it is a
team and probably yourself as well. Are you up
delight? Are you fooling yourself? “But … a cool
looking iPad car-holder is our delight.” Probably
CUSTOMERS AND PAIN The first question to be asked is if the pain applies to anyone other than yourself, or your closest circle of friends? Too many times we
not a sustainable Delight. In fact, by the time you have your iPad holder, your competitors have already had one on the market for months. So NO delight there! Again, ask yourself, what is your delight? Will your customers also tell their friends about your delight? 103
You know there is strong delight in your product!
How will you make money? Do you have any
So how many customers do you have? If too
zeros? Even if you do, do you have enough of
few, then you are not delivering on customer
them? Don’t try to pride yourself on how well you have lowered costs. It is never enough! You need to find the zeros. Lowering costs is just trying to perform a little bit better on the cost side but
acquisition. What is your unique sales formula, and what are the magic moves that will get more customers through the door in a more innovative way than anyone has seen before? Let’s suppose you want to have 150 new customers in 12 months. That means three new customers
adding zeros, truly reinvents your business model.
every week for a whole year! Do the math: you
Do you have enough revenue streams? One is
need to find 300 NEW leads per week, initiate
not enough! Not one more freemium with ads!
30 NEW deeper and longer (!) discussions to get those three customers every week. It is one
thing to invent delight, but it’s a totally differ-
Do you have the right partners for the oppor-
ent thing to convince the world about it. Do you
tunity, or is it the same as with your team: You
and your team have what it takes to get that job
have the partners that are “good enough.” This
done? Remember: this cannot be outsourced to
will not fly! One entrepreneur that we know very
a call center or a recently hired sales team. By
well usually says: “Two sinkers will never become
the end of the day, you have to face the brutal
one float.” Don’t partner with a company that
fact that you have to sell by yourself!
can’t help you float. 104
BORN GLOBAL Are you born global? So why are you not in Silicon Valley, New York, and/or Beijing? Are you in
COMPETITORS If you are new and want to be an outperformer, get real. You will never beat Oracle at its own game. To secure a chance, you will have to change the game and run in a direction that your
the places that will give you the biggest leverage, or are you still in your comfort zone and close to the ones you love?
HIGH STAKES, NO PRISONERS What are the biggest risks with your business idea and your plan? There have to be risks attached to your venture, since no RISK, no gain! When you have identified the risks, then it’s time to consider what you can do in order to prevent the worst from happening. This is our “don’t screw it up” plan – and figure out a plan for what to do if it does happen – otherwise known as the “okay competitors would never dream about, and if you
we screwed up” plan! And a “here’s what we try
are lucky, there will be a Blue Ocean to dive in.
next” plan. It might also be wise to assess how
But most fish end up on the shore – dead! Then,
likely it is that things will go wrong – the handy
would the Red Ocean sound easier?
“how likely is it that we’ll screw up” assessment. 105
reality check In which case, you can hardly do without the “how
to generate electricity. You plan to install them
costly it would be for our venture if this happens?”
in San Francisco Bay and start churning out
plan, otherwise known as the “how dead are
electricity. While you’ve certainly earned high
we?” assessment. In order to succeed, you have
marks for creative thinking, an idea from that
to believe. Don’t let the above discourage you!
far outside the box deserves a serious severity
There will be times when you have to stretch your
analysis before you start prototyping. Additional
goals, but don’t dive into the “we screwed up!”
things to consider in a Reality Test:
plan two months after launch. You would not only be foolish, but also show the world that you’re not
1. Environmental Analysis
very good at assessment and planning. It’s OK to
Try to identify key political, macroeconomic,
spend three years in stealth mode, provided that
regulatory, technological, and ecological forces
you took the risks into account from the begin-
that will influence your work with various mar-
ning. The worst thing you can do is announce
kets and in different regions. If you plan on tak-
your product will hit the market in four months,
ing advantage of Mother Nature in a way that is
and then take three years to develop it. Inevita-
not feasible, think again.
bly, the time will come that you have to deliver the bad news: your prototype is taking longer to
2. Ethical Analysis
develop than planned, the manufacturing plant
An ethical analysis is simple. Are you comfort-
in Antarctica fails to deliver, your marketing guy
able with conducting the business you’re as-
is having a brain freeze, or the sales team is not
sessing? Are there any moral implications for
closing any deals. It is OK! It will happen! What
you and your team that might result from the
you can avoid is presenting surprises. Check: Be
business? If you feel at all uneasy with what you
brutally honest, face the facts, plan for avoidance,
are proposing, go back and revise the content
and for when it happens.
connected to the different gears. Make sure you can stand up tall and be proud of the business
BE PREPARED TO SHOULDER THE BLAME
you are trying to launch.
Let’s say you start an energy business with the idea of buying old Soviet nuclear submarines
Now you are prepared!
chapter summary – reality CHECK You just have to do it! No one really likes
resources on identifying potential risks and
wasting time and energy on trying to de-
always keep one eye on the company’s dash-
fine what can go wrong, especially at times
board and on the needles. We can assure
when everything is progressing in the right
you that things will go wrong, and when that
direction. We do understand your frustration,
happens, you will be able to shorten the time
but would like to encourage you to spend
between “detection, action, back on track.”
Time for the last questions, but perhaps the most important ones: 1. Have you done your math? 2. Do you know what can go wrong? 3. Do you know how to avoid it? 4. What you will do if it happens? 5. How severe it will be for the company? 6. And what is the probability that it will happen?
remember Face the brutal facts, then act on them.
SYNC YOUR GEARS
SYNC YOUR GEARS!
SYNC YOUR GEARS
WAS IT HARD TO FIND THE EDGE IN EVERY GEAR? The most fundamental skill is to get all the gears to move in the right direction. Don’t kid yourself: business is a hard game. Even though our hope is that you will grasp the basics of this framework in a snap, it will take a lifetime for you to master. You might think you know all about the gears, but mastering and syncing them is challenging. Suppose you change the direction of one gear – or some gears get stuck – your progress might get delayed or terminated.
Don’t spend too much time and energy on just
Customer Acquisition-Centric Strategies based
one of the gears, even if that one gear is the
on inputs from every gear. Why? Our reason is
best fit to the opportunity. All gears are equally
simple. Customers are always the top priority.
crucial! However, the three gears in the center
No revenue, no success, and no fame if you
(Delight, Customer Acquisition, and Business
can’t acquire customers!
Model) are vital when determining if you have a business opportunity worth pursuing! We have
And here is where we diverge from how others
deliberately avoided giving you too many direc-
think about strategy development. You should
tions on how to use the framework. But we
derive your strategy from answering simple
would like to conclude this book with a few sug-
questions like “Who are our customers?”, “How
gestions that might help if you ever get stuck.
should we find them?”, “What Delight can we offer them?”, and “How do we get our business
CENTER OF GRAVITY: DELIGHT, CUSTOMER ACQUSITION, AND BUSINESS MODEL
to pay off in the long run?”
The gears are the center. We assess new and
solution. It is useful to know how many people in
existing business opportunities by formulizing
the whole world own mobile phones, and among
Internet research for market data is not our
them, how many play games when commut-
want to fight in an existing game and become
ing more than 20 minutes to work. However,
the new outperformer.
these important data points should not serve as points of reference for your business op-
So start with the three gears in the middle, and
portunities if you want to be a Game Changer.
apply them on only one product or business
For companies that create new industries,
area. The more refined your product or service,
finding data to evaluate non-existent markets
the easier it is to solve the problem. Yes, we know
is like crystal ball-gazing to predict the future.
many companies solve different pains simulta-
Use data from existing markets only if you
neously, but letâ€™s tackle one pain at a time.
SYNC YOUR GEARS Spend just one hour on each gear. Note your
Don’t be upset about the comments, questions
immediate thoughts. Don’t try to completely
and suggestions! They’re just trying to help.
decipher each and every one of the three gears
Nothing personal, just business!
on your first attempt. Trust us, you will get there! On paper, draw three axes – one for each of the
Now, move closer to your gears. Carefully start
three gears. Write down the name of the gear
removing Post-its and add new ones. Don’t
next to each axis: Customer Acquisition on the
throw any Post-its away yet. Just stick them on
top, Delight to your left, and Business Model
the wall after removing them from the canvas.
to your right. Place colorful Post-it notes next
Why? You might have to move them back. Re-
to each heading detailing your thoughts about
member, you are formulating a strategy. You are
each of the gears. Be generous with Post-its.
creating Business Development! You are trying
Brainstorm and use short, snappy, fun words
to increase the likelihood for success by identify-
and expressions to capture your ideas; they will
ing and pinpointing the most promising ideas.
come in handy when communicating your idea to others.
If you need more input, or if you don’t quite comprehend our presentation of the gears,
After this first round of sticking Post-its to your
we have more resources for you. You can dig
gears, take a step back and review the whole
deeper by reading more from the references.
picture in front of you. Remember that all gears
Another option is to buy any of our Deep Dive
have to be in sync with each other! Do the
books, where we provide in-depth explanations
solutions on the Delight axis truly address the
of each gear and tools you can work with. You
proposals on the Business Model gear? Are the
are also welcome to pick the brains of our
ideas for Frequency on the Customer Acquisi-
online community members on our website.
tion axis actionable with the Business Model you are anticipating? Stay away from the gears for a
few more minutes! Don’t change anything – just
There is rarely a perfect solution or strategy that
observe! Bring in some people you trust and ask
works in one shot. A strategy is a conglomera-
them their opinions. How valid are your ideas
tion of mistakes made and lessons learned from
and what is their potential as the centerpiece
interactions with customers. If you want to be a
of your Customer Acquisition-Centric Strategy?
Game Changer, be more innovative and make
more mistakes to find that solution. Thomas
1. To what gears do Customers and Pain con-
Edison once said: “Many of life’s failures are
nect? Are there any Customers without Pain
people who did not realize how close they were
to success when they gave up.” On the other hand, if you are striving to outperform in existing
2. How about Competitors and Partners? Use
markets, you will undoubtedly copy what others
a marker or strings to connect them to the
do, but do it better, and beat the competition in
three gears in the center. Don’t be alarmed if
their game. However, we have to warn you that
it looks like a spider web: it’s supposed to!
many ideas look great on paper or in conference rooms but fail in real life. So minimize that risk!
3. Now back to the first three gears. Which ideas should be added, removed or changed to
OK! For now, let’s put aside the first three gears.
weaken a Competitor, strengthen a Partner,
Remember to take time to go back, revise and
or relieve a Pain more effectively?
modify your ideas. Ready to move on to the three next gears?
You can now take a step back and review what you have. Give yourself a pat on the back! You
SECOND ORDER OF MAGNITUDE: COMPETITORS, PARTNERS , CUSTOMERS (AND THEIR PAIN)
Now it’s time to expand your Center of Gravity!
THIRD ORDER OF MAGNITUDE: GO GLOBAL, REALITY TEST, TEAM
Test your ideas on Delight, Customer Acquisi-
Go Global, as we said earlier in the book, is not a
tion and Business Models to the following three
necessity. It is fine to target a potentially lucra-
constituencies that will decide the future of your
tive but also very local market! But you can still
business opportunity: Competitors, Partners, and
muse on what would happen if you take your
Customers (and their Pain). So bring out new flip
company one step further to markets worldwide.
charts and Post-its! Create more space around
Will markets in other countries benefit from
your gears and stick the competitors, partners,
your product? Go back to the gears. Draw some
and customer and pain Post-its on it. Connect
clouds on the distant corners and connect them
related Post-its with a marker and ask yourself
with Customers and Pain. If you are not certain
the following questions:
that Go Global is your cup of tea, that’s okay! No 113
SYNC YOUR GEARS pressure! However, your hesitancy to Go Global
for the venture. By now, it is easier to share your
proves that your Delight is not as competitive.
vision with potential teammates by showing your
On the other hand, if Go Global is one of your
Customer Acquisition-Centric Strategy. Not only
major opportunities, reconsider your potential
can you work with them to look over and modify
Partners and Competitors, and make sure you
your business opportunity, but you have also
include everyone in your first iteration.
included them in the process of assessing the best fit among different team members. Ask po-
Reality Test is another crucial gear. Mark your
tential team members to add their own Post-its
risks with red, yellow, and green circles around
and show how they can contribute to individual
everything you have written, drawn and Post-it!
parts of the canvas.
Use Red for Alert, Yellow for potential abort, and brutal facts, but don’t become overly cautious.
WE PRESENT TO YOU: YOUR CUSTOMER ACQUISITIONCENTRIC STRATEGY!
Finally, we have saved Team for last, although we
You’ve done enough in your dorm, garage, or of-
started the book outlining the components of a
fice. Luck is not coming to you: instead, you have
great team. We are not trying to counter every-
to go out and make your own luck. You have your
one else who claims that building a great team is
unique Customer Acquisition-Centric Strategy.
the essential ingredient for a venture’s success
That, together with your passion for curing your
and thereby should be handled first. We also
customers’ pain, is what will bring your forward.
have not messed up the order of the chapters
It is your responsibility to act on what you have –
in the book. On the contrary, we have saved the
no one else will do it for you, but hopefully there
most important part for last. We are trying to en-
are several who will do it with you.
Green for no risk in sight. Never fear to face the
sure that you will invite the best team members
You donâ€™t have to trust us 116
The People on the bus
Tom Kosnik is a Professor at Stan-
and captured informa-
ford University. Tom started his
tion on these growing
teaching journey at Harvard. This
companies. The new-
is where he laid the foundation
found insight was mixed
for this book by initiating the
with existing knowledge
work with the DDART frame-
and taught to students
work – Diagnose, Decision,
together with what the most
Analysis and Reality Test.
DDART was developed after
Silicon Valley had to offer.
many years of research with
One company Lena studied
the goal to support students,
was Skype, which was how
entrepreneurs, and businesses to decipher
Tom and Lena met Jonas.
new and existing business opportunities.
JONAS KJELLBERG LENA RAMFELT
Jonas Kjellberg, a serial entrepreneur, was a
Lena Ramfelt holds a PhD from Stockholm
member of the Skype leadership team when he
University. She joined forces with Tom at Stan-
met Tom and Lena. Jonas had started a handful
ford and the two of them have been teaching
of companies and invested in even more. Jonas
together for the past 15 years. During their
started to lecture in Tom’s and Lena’s marketing
years together, they saw Silicon Valley grow and
classes about the real life of building companies,
outperform the rest of the world in building new,
the challenges and the gains, and what kind
large and successful companies. Together they
of thinking it took to build Skype. Jonas and 119
bios Lena started to compare notes on what kind
lenge of illustrating the ideas, and his illustra-
of innovative thinking was needed for success,
tions say more than a thousand words.
but more importantly why some good ideas and
companies made it while others didn’t.
The journey has been both interesting and Jonas had a vision to take lessons learned
rewarding. The next challenge is to secure a
from hyper-growth companies, include that with
Digital Learning Tool so that the readers can
what was taught at world-class universities,
formulate and communicate their own unique
and revamp it to create a user-friendly mix and
Customer Acquisition-Centric Strategies, learn
make it accessible to entrepreneurs around the
more and also share stories and advice with
world. Tom, Lena, and Jonas became a great
team. Their combination of academic knowledge and real-life experience is the foundation
The team has also started working on develop-
for the book.
ing “Deep Dives,” which are separate books for every gear where more experiences, and more
With Tom as a mentor, Jonas and Lena set out
in-depth descriptions of the particular gears will
on a journey to write Gear Up Your Best Busi-
be presented with more tools and examples
ness Idea Ever. The challenge was to get
from companies and enterprises.
it academically correct, base it on real life entrepreneurship, get the job done, and still
Whether this book has changed the game for
make it accessible for everyone interested in
management literature is still to be proven. This
journey is built on a constant communication with existing and potential customers. The ex-
… AND THE CREATIVE GUYS ULF and JOHAN
ample you have in your hands is a beta version. The interaction and the feedback have been
This book would not exist without all the time
extraordinary; everything from spelling mistakes
and energy that Ulf Öman, the creative director
to shortcomings in content have been corrected
and producer, has put in to the project. This book
thanks to this interaction. New material has been
would not be what it is with out the incredible
included, obsolete content cut, and not-so-good
illustrator Johan Röstwall. Johan has the chal-
illustrations have been improved. This could 120
never have been done if there had not been interaction with potential customers. It takes guts to do it! But it is worth it!
TO YOU, THE READER The book has completed what we set out to do. If the Gear Up model has been of value as you explore your idea, please tell us! However, if this book has not been helpful, please help us make it better. Even if we have done a good job with this book, your journey is not yet complete. You can always do more analysis, more reading, or hold more discussions. You have been working hard going through the different gears to make sure they are in sync and they spin. But at the end of the day, the proof of the business opportunity is in the execution! It is time to implement the ideas in your writing, and the thoughts you have shared with family and friends. There comes a time when you have to move on from plans, thoughts and contemplation. That time is now! You have two options. Either you go ahead and do it and become one of our heroes or you decide not to execute for some reason. That is OK! At least now, you admire those who take their ideas from planning to execution.
We are delighted that you have read this far! We encourage you to not skip this section. Pick a few books and articles, read them and enjoy how the lessons learned will contribute to your own success. And you will have a lot of fun reading them!
CustomerS “Can’t ride with them. Can’t sell to them.” From a conversation Jonas had in a Harley-Davidson shop in California. Alsop, Ron. The Trophy Kids Grow Up: How the Millennial Generation is Shaking Up the Workplace. US: Jossey-Bass, 2008. Anderson, Chris. The Long Tail, Revised and Updated Edition: Why the Future of Business is Selling Less of More. US: Hyperion, 2008. en in Blank, Steven Gary. The Four Steps to the Be his loop! Epiphany. US: Cafepress.com, 2005. Cool, Karen and Petros Paranikas, “When Every Customer Is a New Customer” Harvard Business Review 89 (May 2011): 29-31.
Moore, Geoffrey A. Inside the Tornado: Marketing Strategies from Silicon Valley’s Cutting Edge. US: HarperBusiness, 1999.
Moore, Geoffrey A. Crossing the Chasm. US: Harper Paperbacks, 2002. Moore, Geoffrey A. Living on the Fault Line, Revised Edition: Managing for Shareholder Value in Any Economy. US: HarperBusiness, 2002. Moore, Geoffrey A. Dealing with Darwin: How Great Companies Innovate at Every Phase of Their Evolution. US: Portfolio Hardcover, 2005.
Mullins, John. The New Business Road Test: What Read before writing entrepreneurs and executives should do before businessaplan writing a business plan. US: FT Press, 2004. Schneider, Joan and Julie Hall “Why Most Product Launches Fail.” Harvard Business Review 89 (April 2011): 21-23.
Grimes, John. Reality Check. US: Ten Speed Press, 1993.
Silverstein, Michael J., Kate Sayre, and John Butman. Women Want More: How to Capture Your Share of the World’s Largest, Fastest-Growing Market. US: HarperBusiness, 2009.
Grimes, John. Fuzzy logic: Cartoons. US: J. Grimes, 1998. Joachimsthaler, Erich. Hidden in Plain Sight: How to Find and Execute Your Company’s Next Big Growth Strategy. US: Harvard Business School Publishing, 2007.
Simester Duncan. “When You Shouldn’t Listen to Your Critics.” Harvard Business Review 89 (June 2011): 42.
Kahney, Leander. Cult of iPod. US: No Starch Press, 2005. Maslow, A.H. Maslow on Management. US: Wiley, 1998. 122
Washburn Nathan T., and B. Tom Hunsaker “Finding Great Ideas in Emerging Markets.” Harvard Business Review 89 (September 2011): 115-120.
Audiences, and Sell More Stuff. US: Prentice Hall, 2009.
“Always be closing”, from the movie “Glengary
Silverstein, Michael J., Kate Sayre, and John Butman. Women Want More: How to Capture Your Share of the World’s Largest, Fastest-Growing Market. US: HarperBusiness, 2009.
Glen Ross”, 1992 Aral, Sinan, and Dylan Walker. “Forget Viral Freq uency in your Marketing-Make the Product Itself Viral” product! Harvard Business Review 89 (June 2011): 34-35. Grimes, John. Reality Check. US: Ten Speed Press, 1993.
Tannen, Deborah, Talking From 9 to 5: Women and Men in the Workplace: Language, Sex, and Power, William Morrow, and Company, New York, NY, 1994. Wiefels, Paul. The Chasm Companion: Implementing Effective Marketing Strategies for High-Technology Great Companies. US: Harper Paperbacks, 2002. ols!
Grimes, John. Fuzzy logic: Cartoons. US: J. Grimes, 1998.
Kawasaki, Guy. Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition. US: Portfolio Hardcover, 2008. Li, Charlene, and Josh Bernoff. Groundswell: Winning in a World Transformed by Social Technologies. US: Harvard Business Press, 2008. Li, Charlene. Open Leadership: How Social Technology Can Transform the Way You Lead. US: Jossey-Bass, 2010. Ries, Al, and Jack Trout. Positioning: The Battle for Your Mind. US: McGraw-Hill, 2000.
“Innovate, don’t imitate”, inspiration from Nordstrom, Kjell, A. Karaoke Capitalism. Management for Mankind. Sweden: Bookhouse Publishing AB, 2003 Brown, Bruce, and Scott, D. Anthony “How P&G Tripled Its Innovation Success Rate.” Harvard Business Review 89 (June 2011): 64-72. Frank, Milo O. How to Get Your Point Across in 30 Seconds or Less. US: Pocket, 1990.
Rogers, Everett M., and Everett Rogers. Diffusion of Innovations, 5th Edition. New York: Free Press, 2003.
Gladwell, Malcolm. The Tipping Point: How Little Things Can Make a Big Difference. US: Back Bay Books, 2002.
Schiffman, Stephan. Getting to Closed: A Proven Program to Accelerate the Sales Cycle and Increase Commissions. US: Dearborn Trade Publishing, 2002
Godin, Seth. All Marketers Are Liars: The Power of Telling Authentic Stories in a Low-Trust World. US: Portfolio Hardcover, 2005.
Schiffman, Stephan. Cold Calling Techniques (That Really Work!). US: Adams Media, 2007
Grimes, John. Reality Check. US: Ten Speed Press, 1993.
Schiffman, Stephan. The 25 Sales Habits of Highly Successful Salespeople US: Adams Media, 2008
Grimes, John. Fuzzy logic: Cartoons. US: J. Grimes, 1998.
Shih, Clara. The Facebook Era: Tapping Online Social Networks to Build Better Products, Reach New
Hughes, Mark. Buzzmarketing: Get People to Talk About Your Stuff. US: Portfolio Trade, 2008. 123
sources Your ne xt opport best unit might be y in front of you
Joachimsthaler, Erich. Hidden in Plain Sight: How to Find and Execute Your Company’s Next Big Growth Strategy. US: Harvard Business School Publishing, 2007.
Your Mind. US: McGraw-Hill, 2000. Schmitt, Philipp, Skiers, Bernard, and Christophe Van den Bulte “Why Customer Referrals Can drive Stunning Profits” Harvard Business Review 89 (June 2011): 30.
Kahney, Leander. Cult of iPod. US: No Starch Press, 2005. Kawasaki, Guy. The Art of the Start: The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything. US: Portfolio Hardcover, 2004. Kawasaki, Guy. Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and With a Outmarketing Your Competition. US: Portfolio laugh Hardcover, 2008. Kawasaki, Guy. Enchantment: The Art of Changing Hearts, Minds, and Actions. US: Portfolio Hardcover, 2011.
Silverstein, Michael J., Kate Sayre, and John Butman. Women Want More: How to Capture Your Share of the World’s Largest, Fastest-Growing Market. US: HarperBusiness, 2009. Wiefels, Paul. The Chasm Companion: Implementing Effective Marketing Strategies for High-Technology Companies. US: Harper Paperbacks, 2002.
Business Model “from idea to cash”, our own contribution.
Keiningham, Timothy, L., Aksoy, Lerzan, Buoye, Alexander and Bruce Cooil Washburn “Customer Loyalty Isn’t Enough. Grow Your Share of Wallet.” Harvard Business Review 89 (October 2011): 29-31. Kent, Muhtar and Adi Ignatius “Shaking Things Up at Coca-Cola.” Harvard Business Review 89 (October 2011): 94-99. Kourdi, Jeremy. 100 Great Business Ideas: From Leading Companies Around the World. US: Marshall Cavendish Corp/Ccb, 2010. Lewis, Michael. The Future Just Happened. US: Coronet Books, 2002.
Anderson, Chris. Free: The Future of a Radical Price. US: Hyperion, 2009. Byers, Thomas, Richard Dorf, and Andrew Nelson. Technology Ventures: From Idea to Enterprise. US: McGraw-Hill Science/Engineering/Math, 2010. Bryce, David, J, Jeffrey H. Dyer, and Nile W. Hatch “Competing Against Free” Harvard Business Review 89 (June 2011): 104-111. Geirland, John, and Eva Sonesh-Keder. Digital Babylon: How the Geeks, the Suits, and the Ponytails Fought to Bring Hollywood to the Internet. US: Arcade Publishing, 1999. Girotra, Karan, and Serguei Netessine., “How to Build Risk into Your Business Model.” Harvard Business Review 89 (May 2011): 100-105.
Martin, Roger, L. “The Innovation Catalysts.” Harvard Business Review 89 (June 2011): 82-87. Monroe, Lorraine. Nothing’s Impossible: Leadership Lessons From Inside And Outside The Classroom. US: PublicAffairs, 1999.
Grimes, John. Reality Check. US: Ten Speed Press, 1993. Grimes, John. Fuzzy logic: Cartoons. US: J. Grimes, 1998.
Ries, Al, and Jack Trout. Positioning: The Battle for
Mullins, John, and Randy Komisar. Getting to Plan B: 124
Breaking Through to a Better Business Model. US: Harvard Business Press, 2009.
US: Penguin (Non-Classics), 2011 Grimes, John. Reality Check. US: Ten Speed Press, 1993.
Nunes, Paul and Time Breene, “Reinvent Your Business Before it’s too Late” Harvard Business Review 89 (January/February 2011): 80-87.
Grimes, John. Fuzzy logic: Cartoons. US: J. Grimes, 1998.
Omidyar, Pierre., “EBay’s Founder on Innovating the Business Model of Social Change.” Harvard Business Review 89 (September 2011): 41-44. Osterwalder, Alexander, and Yves Pigneur. Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers. US: Wiley, 2010. Prahalad, C.K. The Fortune at the Bottom ofthe Pyramid: Eradicating Poverty Through Profits. US: Wharton School Publishing, 2004.
Kawasaki, Guy. The Art of the Start: The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything. US: Portfolio Hardcover, 2004. Kawasaki, Guy. Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition. US: Portfolio Hardcover, 2008. Lebret, Herve. Start-Up: What We May Still Learn From Silicon Valley. US: CreateSpace, 2007.
Rangan, V. Kasturi, Michael Chu, and Djordjija PetkoInsight ful! ski “Segmenting the Base of the Pyramid” Harvard Business Review 89 (June 2011): 113-117. Staats, Bradley, R. and David M. Upton “Lean Knowledge Work.” Harvard Business Review 89 (October 2011): 101-108.
Lewis, Michael, The New New Thing, W.W. Norton & Company, New York, NY, 1999. Li, Charlene. Open Leadership: How Social Technology Can Transform the Way You Lead. US: Jossey-Bass, 2010. Monroe, Lorraine. Nothing’s Impossible: Leadership Lessons From Inside And Outside The Classroom. US: PublicAffairs, 1999.
Ury, William. Getting Past No. New York: Bantam, 1992. negotiate!
“Who loves you? Who hates you?” Our own contribution.
Ury, William. The Power of a Positive No: Save The Deal Save The Relationship and Still Say No. New York: Bantam, 2007.
Carlton, Jim. Apple: The Inside Story of Intrigue, Egomania, and Business Blunders. US: Crown Business, 1997.
Wiefels, Paul. The Chasm Companion: Implementing Effective Marketing Strategies for High-Technology Companies. US: Harper Paperbacks, 2002.
Cialdini, Robert B. Influence: Science and Practice. US: Allyn & Bacon, 2000.
Cialdini, Robert B. Influence: The Psychology of Persuasion. US: Harper Paperbacks, 2006. Fisher, Roger, William L. Ury, and Bruce Patton. Getting to Yes: Negotiating Agreement Without Giving In. 125
“Big Beats the Small or Fast Beats the Slow”, inspiration from Jan Stenbeck Berger, Jonah, and Scott Berinato, “If You Want to
erA new p n o spective n! io competit
Win, Tell Your Team It’s Losing (a Little)” Harvard Business Review 89 (October 2011): 36-37.
Space and Make Competition Irrelevant. US: Harvard Business Press, 2004.
Brown, Shona L., and Kathleen M. Eisenhardt. Competing on the Edge: Strategy as Structured Chaos. US: Harvard Business Press, 1998.
Kim, W. Chan, and Renée Mauborgne, “Blue Oceanread anythingis else, read th Strategy.” Harvard Business Review 82 (October one! 2004): 76-85.
Christensen, Clayton M. The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. US: Harvard Business Press, 1997.
Moore, Geoffrey A. Dealing with Darwin: How Great Companies Innovate at Every Phase of Their Evolution. US: Portfolio Hardcover, 2005.
Christensen, Clayton M., and Michael E. Raynor. The Innovator’s Solution: Creating and Sustaining Successful Growth. US: Harvard Business Press, 2003.
Reeves, Martin, and Mike Deimler, “Adaptability: The New Competitive Advantage Harvard Business Review 89 (July/August 2011): 135-141.
Elkington, John, and Pamela Hartigan. The Power of Unreasonable People: How Social Entrepreneurs Create Markets That Change the World. US: Harvard Business Press, 2008.
Zook, Chris. Beyond the Core: Expand Your Market Without Abandoning Your Roots. US: Harvard Business Press, 2004
Grimes, John. Reality Check. US: Ten Speed Press, 1993.
t If you don’
GO Global “Good Ideas have no Boundaries”, inspiration from Friedman, Thomas L., in The New York Times, October 6, 2006
Grimes, John. Fuzzy logic: Cartoons. US: J. Grimes, 1998. Hamel, Gary, and C. K. Prahalad. Competing for the Future. US: Harvard Business Press, 1996.
Altman, Daniel. Connected: 24 Hours in the Global Economy. US: MacMillan, 2007.
Joachimsthaler, Erich. Hidden in Plain Sight: How to Find and Execute Your Company’s Next Big Growth Strategy. US: Harvard Business School Publishing, 2007.
Castells, Manuel. Technopoles of the World: The Making of 21st Century Industrial Complexes. US: Routledge, 1994.
Kawasaki, Guy. Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition. US: Portfolio Hardcover, 2008. Keiningham, Timothy, L., Aksoy, Lerzan, Buoye, Alexander and Bruce Cooil Washburn “Customer Loyalty Isn’t Enough. Grow Your Share of Wallet.” Harvard Business Review 89 (October 2011): 29-31.
Cole, Geert. Lonely Planet South Pacific & Micronesia. US: Lonely Planet, 2006. Doz, Yves L., Jose Santos, and Peter Williamson. From Global to Metanational: How Companies Win in the Knowledge Economy. US: Harvard Business Press, 2001. Friedman, Thomas L. The World Is Flat 3.0: A Brief History of the Twenty-first Century. US: Picador, 2007.
Kim, W. Chan, and Renée Mauborgne. Blue Ocean Strategy: How to Create Uncontested Market
Friedman, Thomas L. Hot, Flat, and Crowded: Why We 126
Need a Green Revolution--and How It Can Renew America. US: Farrar, Straus and Giroux, 2008.
Harvard University Press, 1996. Saxenian, AnnaLee. The New Argonauts: Regional Advantage in a Global Economy. US: Harvard University Press, 2006.
Grimes, John. Reality Check. US: Ten Speed Press, 1993. Grimes, John. Fuzzy logic: Cartoons. US: J. Grimes, 1998. Hofstede, Geert, Gert Jan Hofstede, and Michael Minkov. Cultures and Organizations: Software for the Mind, Third Edition. US: McGraw-Hill, 2010. Johnson, Bill “The CEO of Heinz on Powering Growth in Emerging Markets.” Harvard Business Review 89 (October 2011): 47-50. Kumar, Nirmalya and Phanish Puranam “Have You Restructured for Global Success?.” Harvard Business Review 89 (October 2011): 123-128. Lipnack, Jessica, and Jeffrey Stamps. Virtual Teams: People Working Across Boundaries with Technology. US: Wiley, 2000. McKendrick, David, Richard Doner, and Stephan Haggard. From Silicon Valley to Singapore: Location and Competitive Advantage in the Hard Disk Drive Industry. US: Stanford Business Books, 2000.
Scott, Allen J. Regions and the World Economy: The Coming Shape of Global Production, Competition, and Political Order. US: Oxford University Press, 2000. Trompenaars, Fons and Charles Hampden-Turner, Riding the Waves of Culture: Understanding Cultural Diversity in Business, Second Edition, McGraw Hill, New York, NY, 1998. Washburn Nathan T., and B. Tom Hunsaker “Finding Great Ideas in Emerging Markets.” Harvard Business Review 89 (September 2011): 115-120.
“Get the Right People on the Bus”, Collins, Jim. Good to Great: Why Some Companies Make the Leap...And Others Don’t. US: HarperBusiness, 2001. Berger, Jonah, and Scott Berinato, “If You Want to Win, Tell Your Team It’s Losing (a Little)” Harvard Business Review 89 (October 2011): 36-37.
Nisbett, Richard. The Geography of Thought: How Asians and Westerners Think Differently...and Why. US: Free Press, 2003.
Branson, Richard. Business Stripped Bare. US: Virgin Books, 2009.
Popkin, James M., and Partha Iyengar. IT And the East: How China And India Are Altering the Future of Technology And Innovation. US: Harvard Business Press, 2007.
Prahalad, C.K. The Fortune at the Bottom of business opportunity the Pyramid: Eradicating Poverty Through here! Profits. US: Wharton School Publishing, 2004. Saxenian, AnnaLee. Regional Advantage: Culture and Competition in Silicon Valley and Route 128. US: 127
Bronson, Po. The Nudist on the Late Shift: And Other True Tales of Silicon Valley. US: Random House, 1999. Carlton, Jim. Apple: The Inside Story of Intrigue, Egomania, and Business Blunders. US: Crown Business, 1997. Carroll, Michael. The Mindful Leader: Awakening Your Natural Management Skills Through Mindfulness Meditation. US: Trumpeter, 2008. Cialdini, Robert B. Influence: Science and
sources Practice. US: Allyn & Bacon, 2000.
Grimes, John. Fuzzy logic: Cartoons. US: J. Grimes, 1998.
Cialdini, Robert B. Influence: The Psychology of Persuasion. US: Harper Paperbacks, 2006.
Groysberg, Boris, L. Kevin, Kelly and Bryan, MacDonald “The new path to the C-Suite.” Harvard Business Review 89 (March 2011): 60-68.
Collins, James C., and Jerry I. Porras. Built to Last. US: Harper Business, 1996. Collins, Jim. Good to Great: Why Some Companies Excellent reading! Make the Leap … And Others Don’t. US: Harper Business, 2001. Collins, Jim. How The Mighty Fall: And Why Some Companies Never Give In. US: Jim Collins, 2009. Collins, Jim and Hansen, Morten, T. Great By Choice. US: HarperCollins books, 2011 Coppola, Francis, Ford and Alison Beard “Life’s Work: Francis Ford Coppola” Harvard Business Review 89 (October 2011): 156. Covey, Stephen R. The 7 Habits of Highly Effective People. US: Free Press, 2004. DeMarco, Tom, and Timothy Lister. Peopleware: Productive Projects and Teams US: Dorset House, 1999. Elkington, John, and Pamela Hartigan. The Power of Unreasonable People: How Social Entrepreneurs Create Markets That Change the World. US: Harvard Business Press, 2008.
Katzenbach, Jon R. and Douglas K. Smith, The Discipline of Teams, John Wiley & Sons, New York, NY, 2001. Kawasaki, Guy. The Art of the Start: The Time-Tested, Gooicde! adv Battle-Hardened Guide for Anyone Starting Anything. US: Portfolio Hardcover, 2004. Kawasaki, Guy. Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition. US: Portfolio Hardcover, 2008. Kennedy, John Fitzgerald. Profiles in Courage. US: Perennial, 2000. Komisar, Randy, and Kent L. Lineback. The Monk and the Riddle : The Education of a Silicon Valley Entrepreneur. US: Harvard Business Press, 2000. Kouzes, James M., and Barry Z. Posner. The Leadership Challenge, 4th Edition. CA: Jossey-Bass, 2008. Lebret, Herve. Start-Up: What We May Still Learn From Silicon Valley. US: CreateSpace, 2007.
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Reality Check “Only the Truth Sounds Like the Truth”, Behar, Howard. It´s Not About the Coffee: Leadership Principles from a Life at Starbucks. US: Penguin Group, 2007.
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Stoltz, Paul G. Adversity Quotient: Turning Obstacles into Opportunities. US: Wiley, 1999.
Grimes, John. Fuzzy logic: Cartoons. US: J. Grimes, 1998.
Stoltz, Paul G. Adversity Quotient @ Work: Make Everyday Challenges the Key to Your Success – Putting the Principles of AQ Into Action. US: William Morrow, 2000.
Kawasaki, Guy. Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition. US: Portfolio Hardcover, 2008.
Tabrizi, Behnam N. Rapid Transformation: A 90-day Plan for Fast and Effective Change. US: Harvard Business School Press, 2007.
Sync Your Gears
Tannen, Deborah, Talking From 9 to 5: Women and Men in the Workplace: Language, Sex, and Power, William Morrow, and Company, New York, NY, 1994. Thich Nhat Hanh. The Art of Power. US: HarperOne, 2008. Tsu, Lao. Tao Te Ching. New York: Vintage Books, 2011.
Collins, Jim and Hansen, Morten, T. Great By Choice. US: HarperCollins books, 2011 Mullins, John. The New Business Road Test: What entrepreneurs and executives should do before writing a business plan. US: FT Press, 2004.
MORE INSPIRATION Have you enjoyed the book? Would you like
model. Youâ€™ll also find all illustrations used in
to explore more opportunities for working
the book with a step-by-step guide on how to
with the Gear Up model, Customer Acqui-
work with the gears.
sition-Centric Strategy and the gears? Visit Gearupventures.com. There you can find your
If you are a company seeking more guidance
template for a digital workbook, which you
or inspiration on how the Gear Up model can
can use to create your own business op-
help you or if you would like to partner with
portunity assessment based on the Gear Up
us, please contact us.
Existing partners that use this framework are: Stanford Center for Professional Development Please contact Paul Marca for more information at: firstname.lastname@example.org. Stockholm School of Economics Please contact Anders RichtnĂŠr for more information at: Anders.Richtner@hhs.se. Or contact Gear Up Ventures Lena Ramfelt will help you find a good partner: email@example.com
Continue your journey at
Fifth Edition of the Beta Version 2011 Published by Gear Up Ventures AB, Org.nr. 556873-0005 firstname.lastname@example.org ÂŠ Gear Up Ventures AB ISBN 978-91-979569-9-4
“Gear Up” helps you to transform your idea into a high-potential venutre in real time. The nine gears are the most critical components for success. Everything in “Gear Up” has been tested by entrepreneurs around the world. The point of departure for “Gear Up” is that all good business start and end with the simple truth: You need customers – a lot of them! Therefore your goal should be to create a Customer AcquisitionCentric Strategy as early as possible.
Produced by Ulf Öman • ILLUSTRATIONS BY Johan RöstWall