Hartford Business Journal

www.HartfordBusiness.com March 2, 2015 • Hartford Business Journal 21 Biz Books Entrepreneurs can find shortcuts to start a business "F ail Fast or Win Big — The Start-Up Plan For Starting Now" by Bernhard Schroeder (AMACOM, $21.95). Is there a shortcut to starting a business? Yes. Does it require a thoroughly-vetted, whiz-bang business plan? No. Schroeder's the "LeanModel Framework (LMF)" intro- duces the rough-draft process, and follows the advice he provided to numerous other entrepre- neurs, including the found- ers of Yahoo! and Amazon. Instead of a business- plan based concept, LMF relies upon a loosely-market- tested prototype that gauges customer interest. With cus- tomer feedback, an entrepre- neur can "make the decision to tinker or rethink the approach, scale up, or even abandon ship." LMF saves money and attracts money. With negative, fail-fast feedback, the entre- preneur saves money by not trying to pro- vide the answer to something that doesn't attract consumer interest. With positive, win-big feedback, it's easier to sell inves- tors on the merits of the product or service. If you've ever watched "Shark Tank," you know potential investors prefer sales to business-plan forecasts. How do you establish proof-of-concept? Crowdfunding. An effective crowdfunding campaign generates excitement and pre- orders. By giving consumers a discount or reward based upon how much they con- tribute, entrepreneurs not only obtain feed- back, they get debt-free working capital. If you meet or exceed your "ask dollars," you get the funds; fall short and you get nothing. To successfully crowdfund you have to have your market- er's hat on. Schroeder states: "Put some passion — and a bit of personality — into tell- ing your story. Give them an 'emotional' reason to sup- port you." You'll have to spend some upfront money; engaging a marketing com- munications firm to help you tell your story will ensure your written and video communications are professional. Such a firm knows the ins and outs of using social media to help your story go viral, and pass "acceptance mus- ter" at crowdfunding sites like IndieGogo, Kickstarter, Rocket and Peerbackers. Schroeder points out that there are crowdfunding sites for equity investment, too. OurCrowd, Micro Ventures, Angel List and other "equity" crowdfunders have networks of individual investors that pool funds for startups. Key takeaway: "Speed to market is the new normal." • • • "The Scorecard Solution — Measure What Matters and Drive Sustainable Growth" by Dan E. King (AMACOM, $29.95). Barriers to optimum performance reduce strategic and tactical momentum. Metrics pro- vide an early-warning system that cues course correction. But what should you measure and how should you measure it? King's "Organiza- tional Prowess (OP) Scorecard" focuses on the three interrelated drivers of every busi- ness — strategy, execution and talent. Initial completion provides an eye-opening baseline about areas doing well and those lagging. Subsequent completion at six-month intervals allows firms to measure results. Let's look at the drivers: Strategy involves determining what will be done. OP starts with market intelligence. Key questions posed: How much do you know about your com- petition? How much do you know about your consum- ers? It then looks internally through SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis. Having an outside facil- itator chair the strategy meeting has two benefits: 1. Help the group get passed congruent thinking, and 2. Ensure that roles, not titles, drive participation. The outcomes of the meeting should be prioritiza- tion of initiatives, a top-to-bottom communi- cation plan and an execution template. The execution phase uses the template to develop the tactics and performance metrics for the teams involved (includ- ing individual goals of team members). It ensures that the teams have the resources required to reach their goals, and estab- lishes cross-functional feedback loops to fuel collaboration. It also establishes the types of reports needed to assess progress and barriers. Talent remains a key in both strategy and exe- cution. "A" players must own mission-critical roles. Talent development and upgrading must become part of the organizational culture in order to keep momentum. The Bottom Line: Perfor- mance deviations = missed opportunities. n Jim Pawlak is a nationally syndicated book reviewer. Jim Pawlak otHEr VoicEs Tesla: Direct-consumer sales give car buyers more choice By Ricardo Reyes I nnovation in consumer technology has allowed a gamut of consumer options — think customized computers from Dell and Gateway, Apple and Android smart phones, and online shopping options including Amazon, Ebay, and Craigslist. Unfortunately, consumer choice has not extended to automobile sales. A decades-old Connecticut law forces consumers to buy cars exclusively through a dealer network. Imagine if con- sumer choice applied to cars. You could choose whatever fea- tures you wanted in a car (or didn't want), you would know the price of a car without haggling or waiting for "manager approval." In some states, there is such a choice. Tesla sells all of its vehicles to consumers directly, allowing those customers to decide the features they want in an innovative, award-winning, zero-emissions vehicle; a vehicle that uses no gas or oil, but only domestically produced electricity; a vehi- cle that is built entirely in the United States. We've seen the consumer-first system work well, recently showcased by Consumer Reports bestowing on the Tesla Model-S their highest-ever customer satisfaction rating, and 98 out of 100 customers saying they would defi- nitely purchase a Tesla again. Since our inception, Tesla has created over 10,000 jobs, and supported numerous U.S. automotive suppliers located throughout the country. With choice, consumers have the ability to be the ones behind the wheel. Most people today would rather go to the dentist than suffer through the traditional process of purchasing a new car. Yet the Auto Dealers Retail Association in Connecticut recently expressed that Tesla should con- sider changing their current business model from direct-consumer sales, so that a middle party can sell Tesla electric vehicles. Independent economists who have looked at the issue, along with the Federal Trade Commission and Department of Jus- tice, have concluded that consumers are better off, and in fact, will pay lower prices if they are able to buy directly. At the beginning of the 20th century, Henry Ford wrote that any customer could have a car painted any color so long as it is black. Today the Auto Dealers Retail Associa- tion would have consumers buy any care they want, as long as it is from one of their dealers. The solution is simple — let consumers decide for themselves. Rather than trying to force a specific business model on an entire industry, let the principles of free market and consumer choice dictate which businesses thrive and which do not. This is not the same as giving up consumer protection (as the Connecticut Auto Retailers Association would have you believe). Regulato- ry protections on safety, emissions, warranty, lemon laws would all still apply — but would now apply equally across the board. Connecticut residents and consumers would then be able to decide for themselves how and from whom they would buy their car. n Ricardo Reyes is the vice president of global communications at Tesla Motors. Ricardo Reyes ▶ ▶ If you've ever watched 'Shark Tank,' you know potential investors prefer sales to business-plan forecasts. Tesla, whose electric vehicle is shown above, is pushing the state legislature to allow it to sell directly to consumers. P H O T O | C O n T r i b u T e d

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