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January 2016

The Importance of Starting the New Year Off With a Bang

670 300 Russell Potter

by Asher Raphael,, 28th December, 2015 – As many die-hard baseball fans know all too well, you can’t win the pennant in April — but you can lose it. The same sentiment rings true for businesses at the start of each year. While a great first quarter doesn’t necessarily guarantee a banner year, a terrible first quarter will absolutely ensure a year that falls short of expectations. That’s why it’s imperative to make your employees feel energized and motivated — almost as if they are being shot out of a cannon — as the new year begins.

It’s a challenging feat no doubt, especially as many return to the office feeling weary after a long and busy holiday season. However, it’s critical to ensuring a successful year and worth the time, energy and investment it takes to be done right. It’s also the perfect opportunity to take advantage of the natural inclination most of us feel to start the new year with new goals and aspirations on both a professional and personal level.

As your new fiscal year gets underway in the coming weeks, consider the following:

1. Don’t forget to look back.
While everyone views the start of the new year as a chance to wipe the slate clean and get a fresh start, not enough businesses take the time to reflect on both positive and negative trends from the previous twelve months of measurable results. A crucial component of good leadership is accurately communicating the goal and vision of the company, something that, unlike a mission statement, should ebb and flow from year to year.

Just as the President of the United States begins each year with the State of the Union address, it’s important for every business leader to acknowledge the state of his / her business and lay out new, specific goals that are in line with the current vision and realities on the ground.

2. Put success within reach.
Now is the time to define not just long-term goals but also short-term milestones that are both aspirational and achievable. Consider putting out your biggest goals in the first quarter, thereby allowing for some immediate wins and setting the standard for what’s possible for the year. After a huge first quarter, both individuals and departments will redefine their own expectations and set out to achieve year-end goals that on Jan. 1 would have seemed unattainable.

3. Make it personal.
To be a great manager and leader you have to know, understand and care about your people. The goals they are setting for themselves at the beginning of the year are most likely both professional and personal goals and can reveal volumes about their motivations on a number of levels. Make it a point to acknowledge and encourage those goals in some way.

I’ve made it a tradition at the start of each year to ask each employee to write down one short-term and long-term professional goal, one family-related goal, one health-related goal and one spiritual goal. Each list is placed in an envelope, sealed and opened during year-end reviews. Not only does it help people feel accountable and aware of the permanent nature of their goals, but it also allows their managers greater insight into the things that are most important to each of their team members as individuals and human beings.

Perhaps most importantly, every business leader should lead by example. If you want your people to feel energized and motivated at the outset of a new year, you need to feel the same way. Taking time to get away, recharge and reflect outside of your typical day-to-day grind will enable you to look at things from a different perspective and with a clear head as the calendar turns to 2016.

Start-ups Should Sell to Small Businesses, Not Big Enterprises

670 300 Russell Potter

HBR, 1st Feb 2015 > Business-to-business start-ups are an important segment of the entrepreneurial landscape, but many founders hamstring themselves by focusing on the wrong initial customers. They focus on large enterprises, hoping to gain legitimacy from “anchor” customers. This focus can make their path much more difficult, and dramatically reduce their chance of success. Instead, B2B entrepreneurs should focus their efforts on small businesses.

The traditional line against targeting small businesses is that they’re costly to sell to. That’s short-sighted. Selling to small businesses is a great way to start a business, and often sets the stage for selling to larger enterprises later on. In this way, the start-up that initially served only small businesses can disrupt incumbents and come to dominate the large enterprise market, too.

Several examples of this strategy have emerged over the past few years:

  • Salesforce disrupted expensive on-site customer databases by offering a cloud-based solution that replaced substantial up-front expense with a low monthly subscription.
  • Vistaprint disrupted local printing shops by offering web-based design and ordering and centralized production, using economies of scale to dramatically reduce costs.
  • disrupted traditional mail-processing companies like Pitney Bowes by replacing expensive equipment purchases with an online application and monthly subscriptions.

The pattern continues today with start-ups that are in the early phases of this journey:

  • Expensify is in the process of disrupting administrative assistants and office managers with an app-based expense reporting product.
  • HourlyNerd (which was founded by members of my MBA class at Harvard Business School) is disrupting the consulting industry by connecting businesses with independent consultants.

To understand how small business solutions can disrupt large enterprises, I studied HourlyNerd and share here the lessons entrepreneurs can use to create disruptive B2B businesses by starting with small customers.

Because small businesses have similar needs to large businesses, a model that profitably and effectively serves them can be scaled to serve medium and large enterprises with relative ease. Small businesses are also extremely low-risk proving grounds because there are so many of them that failure with any one customer won’t lead to large reputational damage.

Better still, because small businesses desperately want these products but can’t access them, they will be happy with much less functionality than large enterprises that have many products to choose from. This gives start-ups a great entry point for a simple product that can be improved over time to appeal to more demanding customers. Gone are long pre-launch development cycles that attempt to create the optimal product for the most demanding customer. Instead, entrepreneurs can launch quickly with little capital and improve over time. In fact, HourlyNerd was started during Harvard’s FIELD program with only $5,000.

The first step to entering the small business market is to identify opportunities where incumbents are ignoring small businesses because their products are too expensive or complicated. Amazon’s Jeff Bezos recommends looking for opportunities to convert capital and fixed expenses into variable costs. So look for industries where upfront costs are high and new technology could offer similar services with little or no upfront commitment.

Next, create a minimum viable product and work closely with your initial customers to understand what goes right and wrong. For HourlyNerd, this meant individually matching each business and consultant and performing thorough interviews with each before and after the service. It’s important in this phase to temper your growth; make sure your unit economics make sense before seeking to scale.

Keep the product general. Create standardized offerings that many small customers can apply to their unique situation without expensive and time-consuming customization. Similarly, it may be tempting to categorize your customers by attributes like geography or business type, but resist this and instead organize them based on size and sophistication. This will allow you to segment your products and create simple solutions for simple needs and more complex solutions for more demanding customers. Framing your opportunity in terms of the benefits you offer and not customer demographics will help you see opportunities in ever-larger enterprises.Even once you start targeting enterprise customers, it’s possible to do so without competing directly against the bigger competitors. For example, HourlyNerd recognized that while very few people in large organizations have the money or need to hire a major consulting firm, many people have small but important problems that make perfect small consulting projects and space in their budgets to hire a consultant. Similarly, in the post-recession world, many managers have no ability to hire additional staff but have complete flexibility to hire a freelance consultant on a short-term basis. By serving these people, HourlyNerd is now growing in the enterprise space without meeting resistance from big firms, because they’re growing the category with new consumption rather than stealing existing consumption. `

Every business naturally improves its product over time. As B2B entrepreneurs improve theirs, they will find that they can meet the needs of these underserved constituencies in large organizations. The pattern of disruption continues when more demanding constituencies inside the enterprise see the results from the disruptive product and begin to consider it as an alternative to incumbent offerings. Typically incumbents will ignore the startup because they don’t feel any pain from lost sales until their best customers abandon them for the new offering. But by then it’s too late; the startup has succeeded in the disruption and is too big to defeat easily.

This strategy is not without challenges, including brand perception — remember the adage “No one ever got fired for buying IBM.” But with time this can be overcome. While initially many large enterprises may have balked at the idea of using a web start-up called, no one today bats an eye at the idea, even in the largest, most sophisticated companies.

by Thomas Bartman > Harvard Business Review > 1st Feb 2015 > start up business strategy.