Hartford Business Journal

www.HartfordBusiness.com May 25, 2015 • Hartford Business Journal 25 BIZ BOOKS Four forces that will change business trends "N o Ordinary Disruption: The Four Global Forces Breaking All the Trends" by Richard Dobbs, James Manyika and Jonathan Woetzel (PublicAffairs, $27.99). Three McKinsey Global Institute researchers based in various corners of the globe see the future of business from 30,000 feet and ground level. For- get about following trend lines; brace yourself for trend breaks, and the "new normal of shifts, shocks and surprises." Here are the four forces that need to cap- ture your attention: 1. Growth of urbanization in emerging markets — Just as farmers in the U.S. left farms for better-paying city jobs, those in emerging markets are going urban. Have you heard of Tianjin (China) or Porto Alegre (Brazil)? Their growth, along with 400 or so other small-to-medium cities you probably never heard of, will account for nearly half of the growth of global Gross Domestic Product (GDP) through 2025. 2. Accelerating technological change — Technology brings economic progress as businesses and individuals have access to devices that improve communication. Hand- in-hand with the growth of technological applications in business and personal space, goes "infobesity" (i.e. vast amounts of infor- mation available to businesses and consum- ers) and the cloud's information-sharing. While economic progress has its upside, there will be casualties because the lifecy- cle of products and companies will shorten. Risk assessment will play an ever-growing role in strategic and tactical decision-making. 3. Responding to the world's aging population — There's a demographic "def- icit." As the population of developed countries grays and fertility continues to drop, there will be fewer people entering the labor force. Smaller workforc- es, even with technological growth, may not be able to maintain previous GDP levels, or provide sufficient support for governmental programs for longer-living retirees. 4. Greater global connections — The 20th century was dominated by European and North American trading hubs. The 21st will see not only a shift to include China and India, but also Africa. New markets will open; many old markets will plateau or decline. To take advantage of new markets, businesses will need capital investment and an understanding of cultural norms. The bottom line: The authors see the future's global dots and connect them. How will you make your connections? • • • "You are What You Tweet — Harness the Power of Twitter to Create a Hap- pier, Healthier Life" by Germany Kent (Starstone Press, $16.95). When it comes to personal branding, your social media profiles convey your story. Of all the social media outlets, Twitter allows you to really build your brand because it extends the reach of your words through retweets and the addition of fol- lowers. Think of your tweets as personal PR. Your brand message starts with your profile. Your pic- ture, its background image and your tagline are impor- tant for two reasons: 1. Tweeters usually see your profile picture and tweets when they scroll down their Twitter timelines. They're more apt to pay attention to your message when they readily pick out your tweets. 2. Attracting followers. With the abun- dance of social media information available, potential followers are selective. Think of your profile as the dust jacket of your book. Your picture and background are the cover. Your tagline is its title; it should tell them what to expect from your tweets. When it comes to tweeting, tweet often and stay on message. With a 140-character limit, you must think about what you want to say, and use texting shorthand. If you include links to articles or websites, say something about their content to pique interest. Expand your reach to potential followers by including a link to your Twit- ter profile (along with Linke- dIn) in your email signature. Key takeaway: On Twit- ter, you can establish a brand that shares knowledge and builds bridges. Aspire to become a thought-provoker and opinion-leader. n Jim Pawlak is a nationally syndicated book reviewer. Jim Pawlak THE RAINMAKER The path from concept to investment By Ken Cook M y friend Jeremy is passionate about what he does. He is in the field of psy- chology, and he has developed a pro- cess that can clearly help those in need find their way. Jeremy's passion for his work has evolved beyond his personal practice. He wants his process to be available on a wide scale, help- ing as many people as possible. Passion is an essential element underlying successful growth in business. Jeremy, like many entrepreneurs, wants to grow and grow rap- idly. He is convinced that to translate his passion and process into widespread suc- cess requires outside investment capital. At some point that may be true. Just not yet. Jeremy's business is in its' early stages. By his own admittance, he has not documented the results patients attain; he has lots of anec- dotal stories, just no proven and documented track record yet. What's missing is validation by customers. Customers provide validation by paying money. Paying for a product assigns value to the product. Getting a lot of people to pay for a product validates the value the product deliv- ers. The product solves a problem and people are willing to pay to have that problem solved. The expectation of investors at this early stage is that Jeremy (or any entrepreneur) will fund their business through generated revenue, their own financial resources, and/ or friends and family. The transition from self-funding to other people's invested money is usually a function of proven capability matched with opportunity. The common vernacular at this stage is "we're ready to take the business to the next level." Hundreds of market validated prod- ucts and services could truly blossom into growing businesses if there was sufficient capital to fund the growth. If you are in this category, recognize that capital is a tool and consider the investor's perspective. The investor is the buyer, and the entrepre- neur is the seller. As such, the entrepreneur needs to present a compelling case. Be clear on the requirements. Know what the money will be used for, and more importantly, how the money will make the business more successful. Investors, banks, angels or other sources of capital are, in 98 percent of the cases, not looking to fund an entrepreneur. They are funding a venture that is mobilized and driven by a capable entrepreneur. The pur- pose of funding a viable and growing venture is to receive a premium return on the invest- ment. The entrepreneur who wants to get to the next level, and believes capital is the key to doing that, needs to prove their case. The entrepreneur needs to show the investor how their money will drive a premium return. And when you do prove your case, real- ize that investing in early stage businesses is high risk. If you assume that a "no risk" CD returns 3 percent, and a moderate risk Money Market Fund returns 6 percent, then a high-risk entrepreneurial investment should return at least double-digit percentages per year. And, there needs to be an exit strategy for the investor. That's the case the entrepre- neur needs to prove. Proper capitalization can drive growth. The entrepreneur's task is to prove that the growth of the business is attainable, sustain- able, and profitable. If that can be done, then there are sources of capital that will help that business "get to the next level." One disclaimer: disruption. Disrup- tion occurs when the introduction of a new product revolutionizes how things are done. When disruption occurs the rules change. The owner of a disruptive product or process becomes the buyer, and the sources of capital are the sellers. It's simple supply and demand. Disruption is unique. Demand for it will be high. The entrepreneur in this position should pick their partners wisely. n Ken Cook is the co-founder of How to Who and co-author of How to WHO: Selling Personified, a book and program on building business through relationships. Learn more at www. howtowho.com. Ken Cook ▶ ▶ Investors, banks, angels or other sources of capital are, in 98 percent of the cases, not looking to fund an entrepreneur. They are funding a venture that is mobilized and driven by a capable entrepreneur. ▶ ▶ While economic progress has its upside, there will be casualties because the lifecycle of products and companies will shorten.

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