Issuu on Google+

GEAR UP

Still in

BETA

Your best business idea ever

LENA RAMFELT JONAS KJELLBERG Tom Kosnik


“Gear Up� is for Entrepreneurs, Intrapreneurs, and anyone else who helps them bring a new business opportunity to life.

3


Introduction

SOME COMPANIES SUCCEED, OTHERS FAIL 4


Up Gear

5


Introduction

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 — 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

first envisioned.

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


Introduction

8


HERE it is! The gear up model Chapter

Page

Customers

12

DELIGHT

24

Customer Acquisition 34

9

Business Model

48

PARTNERS

60

COMPETITORS

72

GO GLOBAL

82

TEAM

90

REALITY CHECK

100


Introduction

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—

worth pursuing.

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.

10


Up ar Ge

Ready? Let’s gear up! We’ll start with the raison d’être for your whole strategy: customers

11


Customers

Can’t ride with them Can’t SELL to Them 12


13


Customers

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,

High Potential.

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!

14


Or try what we refer to as “increasing the density in the minutes.� What we mean by this is, again, you don’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

15


Customers

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

16


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?

18


W HO DO

Ge ar Up

EY SAY? WHAT DI

19

? RN EA L U D YO

WH AT DO TH

HT THEM?

TH IN

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

N! ?

what pain do you solve?

E THE CUSTOME SOLV RS’ OU PA Y IN? DO


Customers

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 “Cross-

pre-chasm companies encounter some serious

ing the Chasm.� 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

20


Up ar Ge

21


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

technology!

company will change! After you have Crossed the Chasm, this unbe-

THE DILEMMA

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?

22


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.

23


delight

Innovate don’t Imitate 24


25


delight

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


Delight

Efficiency

Ge ar

Up

Functionality

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


delight

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

Bottom line

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.

28


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

marketing campaigns?

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?

29


delight

Up Gear

• 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

Free Storytelling.

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

Up Gear

31


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

32

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.

33


customer acquisition

ALWAYS BE CLOSING

34


35


customer acquisition

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,

be sold.

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!

37


customer acquisition

MAKING THE DEAL Let’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, it’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.

38


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: “OK 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.� 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


Gear Up

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


customer acquisition

PROFITABILITY

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

business model.

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

tion costs?

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 company’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

45


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!

46


chapter summary – 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 doesn’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.

47


business model

From Idea to cash

48


49


business model

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

Carriers

Skype

Switches

Personal computers

Broadband/cables

Use customers’ broadband

Customer service

No customer service. If you don’t like it, uninstall

Invoicing cost and post paid

PayPal and prepaid

52


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 ‌ 53


business model

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.

54


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.

55


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 can’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-

won’t work long-term if your COCA is always

able later as you start to scale.

higher than your LTV.

56


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

delivered.

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

SET GOALS

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. Let’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 can’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.

58


chapter summary – BUSINESS MODEL With the numbers, you are much more

customer acquisition-centric strategy and aim

prepared. With the numbers you’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.

59


partners

WHO LOVES YOU? WHO HATES YOU? 60


61


partners

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-

62


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.

LOVE

HATE 63


partners

Gear Up

64


The most difficult situation for a potential partner

SAY YES

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

PLAYMATE PARTNERS

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

your business.

go. Why? They give wonderful suggestions and feedback, and are fun to have around, but they

SPAM PARTNERS

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

LEARNING PARTNERS

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-

LOVE/HATE PARTNERS

ing a strategic partnership.

Love or Hate Partners are the tough ones to evaluate. In some ways they resemble the situ-

JURASSIC PARTNERS

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

67


partners

REVENUE DELIGHT MATRIX

++

Partner’s Potential to secure REVENUE

Jurassic partners

Love or Hate

Strategic

+

Spam Partners

Ammo in a War

Poison

Playmates

Learning Partners

+

++

Partner’s Potential to help you develop your delight

68


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

Strategic Partners

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


partners

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

New content

Resources (money, time, talent, and knowledge)

Money

New products

Relationships (with customers, channels, investors, government)

Distribution channel

Content providers

Reputation (visibility, credibility, brand equity)

Stable, big

Fun and image

Core Competencies (critical capabilities for execution)

Selling

Technology

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)

Growth

Youth Market

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 partner’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.

71


competitors

big beats the small or fast beats the slow 72


73


competitors

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

BLUE OCEAN

know you got there first.

But the Blue Ocean opportunity sounds perfect,

RED OCEAN

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


competitors

Red Ocean Strategy

Blue Ocean Strategy

The big beat the small

D

Fast beat the slow

Compete

D

Complement

Beat the competition

D

Competition irrelevant

Exploit existing demand

D

Create new demand

Make the value/cost trade-off

D

Break the value/cost trade-off

Differentiation or low cost

D

Solving problems in a new way that makes it better and cheaper

76


77


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?

Up Gear

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


competitors

Red Ocean Strategy

Blue Ocean Strategy

Traditional academic literature

D

OUR BOOK

Delight the author

D

Delight the readers

Star Performers

D

A circles of authors

The thicker the better, strive for 500 pages, with a lot of words and many examples

D

Only 100 pages with a lot of illustrations. Short and consistent

Academic/Top management audience

D

Everyone with an idea is the audience

Academically rigorous

D

Best of Ivory Tower and Street Smart

The truth

D

A complement ‌ to different truths

Provide depth

D

Provide inspiration

Unrelated books, in size and concept

D

Same concept and format

Paper back

D

Educational platform

The author is a time teller

D

The authors are builders of clock builders

80


chapter summary – 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 customers’ 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.

81


Go global

Good ideas have no BOUNDARIES

82


83


GO global

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

84


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-

new region.

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, you’ve got to know the

cial code, you will earn people’s trust, integrate

provincial code ‌

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

88


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.

89


team

GET the right People on the bus 90


Up ar Ge

91


team

“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 Administrator

The Producer

The Delivery Man

92

The Innovator

The Talent


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

The Coder

The Integrator

The Geek

93

The Mascot


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

THINK PERSONAS!

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 customers’ 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 doesn’t mind flying economy class, staying in cheap hotels and eating nothing but instant noodles – 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

THE PRODUCER

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 – 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 can’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, it’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

97


team

THE INTEGRATOR

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.

99


reality check

only the truth sounds like the truth 100


ILLUSTRATION

101


reality check

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

TEAM

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?

102


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

for that?

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


reality check

CUSTOMER ACQUISITION

BUSINESS MODEL

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

PARTNERS

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!

106


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.

107


SYNC YOUR GEARS

SYNC YOUR GEARS!

108


109


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

110


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 let’s tackle one pain at a time.

111


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

MAKE MISTAKES!

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

112


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

or vice-versa?

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)

deserve it!

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

114


115


sources

You don’t have to trust us 116


Gear Up

117


bios

The People on the bus

118


TOM KOSNIK

interviewed, explored,

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.

successful entrepreneurs

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

THE JOURNEY

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

each other.

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

the subject.

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.

121


sources

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.

A classic!

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.


Customer Acquisition

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.

to

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.

Delight

“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.

Wallet share!

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.

PartnerS

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.

you Before

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.

Competition

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


sources

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.

Team

“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.

Incredible

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.

Fernandez-Araoz, Groysberg, Boris and Nitin Nohria “How to Hang on to Your High Potentials.” Harvard Business Review 89 (October 2011): 76-83. Fisher, Roger, William L. Ury, and Bruce Patton. Getting to Yes: Negotiating Agreement Without Giving In. US: Penguin (Non-Classics), 2011.

: -)

Kanter, Rosabeth, Moss “The Cure for Horrible Bosses.” Harvard Business Review 89 (October 2011): 42.

Gardner, Howard. Five Minds for the Future. US: Harvard Business Press, 2007.

Lencioni, Patrick, The Five Dysfunctions of a Team, Jossey-Bass, San Francisco, CA, 2002. Li, Charlene. Open Leadership: How Social Technology Can Transform the Way You Lead. US: Jossey-Bass, 2010. Lipnack, Jessica, and Jeffrey Stamps. Virtual Teams: People Working Across Boundaries with Technology. US: Wiley, 2000.

Grimes, John. Reality Check. US: Ten Speed Press, 1993. 128


Loehr, Jim, and Tony Schwartz. The Power Of Full Engagement: Managing Energy, Not Time, Is The Key To High Performance and Personal Renewal. NY: Free Pr, 2002. Real ories t s Malone, Michael S. Betting It All: The Entrepreneurs of Technology. US: Wiley, 2001. 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. Ury, William. The Power of a Positive No: Save The Deal Save The Relationship and Still Say No. New York: Bantam, 2007.

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.

Robbins, Anthony, Unlimited Power, Fawcett Columbine, New York, NY, 1986. Seligman, Martin E. P. Learned Optimism: How to Change Your Mind and Your Life. US: Vintage, 2006. Soultaris, Vangelis, and B.M. Marcello, Maestro, “The Case of Multitasking” Harvard Business Review 89 (October 2011): 32.

Behar, Howard. It´s Not About the Coffee: Leadership Principles from a Life at Starbucks. US: Penguin Group, 2007. Grimes, John. Reality Check. US: Ten Speed Press, 1993.

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.

129

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.


CONTACT

MORE INSPIRATION Have you enjoyed the book? Would you like

model. You’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: pmarca@stanford.edu. 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: lena@gearupventures.com

130


NOTES

131


notes

132


133


notes

134


Continue your journey at

www.gearupventures.com

Fifth Edition of the Beta Version 2011 Published by Gear Up Ventures AB, Org.nr. 556873-0005 info@gearupventures.com Š 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


9789197956994