The Startup Journey

Business to Business Customer Handling Tips

I was going to write a long intro to this explaining how important it is to keep your customers happy. In second thought I realized its pretty obvious. So I'm going to simply list a few guidelines and insights I gave our project managers:

1.    Setting expectation from the beginning and along the way, will result in better flow and understanding on both sides.

2.    Calling  a customer is hardly ever a wrong move

3.    Being early for a call is much better than being late. Most conference  bridges allows you to be on the call early while continuing to do your emails

4.    It's recommended to use social networks to make the personal bond. Adding a picture in skype is also recommended.

6.    Try to gain as many access points to the customer as possible, this comes very handy at times of a crisis.  (ie: Email; skype; phone; mobile; phone of employee sitting close by; receptionist contact details).

7.    Whenever the customer is criticizing, try to take his side and blame the system, policy, process, industry, world, ...

8.    Answering an email with a phone call is very often a smart move. This is especially true when:

a)     You don't understand something the customer said - phone call can solve the misunderstanding in seconds

b)    The customer is criticizing you and there is audience in the cc list

c)     The customer is angry due to a misunderstanding

d)    The email thread becomes unnecessarily long 

9.    The customer contact is not making your life hard on purpose. Try to understand his challenges in getting you the information/approval you need. Once you understand his challenges you may be able to help him solve them.

10.  Whenever a crisis occurs the best thing to do is to increase the communication with the customer as much as possible, come with a plan.

11.  Notify the customer when he is misbehaving - simply let him know - don't make a fuss over it.

12.  Support issues:

a)     Notify the customer that you received his request.

b)    Let the customer know that you understand the severity/urgency/business-implications of the situation and that you will apply special effort / taking the problem very seriously.

c)     Communicate the process.

d)    Communicate to the customer when the problem was identified.

e)     Communicate the resolution estimated timeline to the customer even if you are unsure.

f)      Once the problem is resolved, inform the customer.
when relevant let him know we are also applying new procedure to essure that the problem will not happen again.

13.    Angry customer is better than indifferent customer. Anger shows that he still cares while indifference shows he gave up and made a decision to cancel.

14.    The customer is not stupid (it doesn't get you anywhere saying he is), take proactive action to explain things better/in a different way.

15.    It will be easier to get the customer's attention at the beginning of the project - right after signing the contract. the willingness to assist is higher and the resources are more available at that time.

16.    Complicated integrations require the attention of the relevant team (from both sides) at the beginning of the project.

17.    Long lasting issues – should be solved by getting the relevant people to the same room/ phone call (if impossible) à push until issue is identified & solved (always better to do it at the beginning of the project when the customer is more dedicated).

18.    Customer does not like to feel in the dark – most of the time it is better to communicate the difficulties/delays expected then to be late.

19.    When you have conflicts – you may find it helpful to consult the customer, he may solve it to you easily.

Less is More. Keeping Your Company Focused

One of the advantages of being a small company is that you can rapidly change the company's direction. Well, this is also a disadvantage. Companies that succeeded are ones that had a very specific direction and were very focused on that one goal. One of our advisors told me: "you need to be able to define your company" - I believe this is a very valid point.

Sounds easy - right? Well, It's not. There are so many distractions along the way. Potential customers telling you that your product is not good for them and you should do something else, advisors that try to push you in a direction that they want to pursue, existing customers who aren't representing the largest market opportunity but constantly ask you to meet their needs, and more and more. 

The key for keeping your company focused is doing less things despite of the distractions. In order to do that, you need to be very clear about what you do, but more importantly what you don't do. One way of doing less is limiting the amount of new initiatives. Don't get me wrong, it's important to explore the market every now and than and there might always be opportunities for you to improve the company. However, it's important to understand that exploration has a price and needs to be managed to make sure you are exploring only direction that has high potential of significantly improving your business.

Another way of doing less, is cutting down activities. There are countless publications about the Pareto Principle (or the 80%-20% rule) and I believe it also applies to management attention - 20% of the activities take 80% of the attention. If you find these 20%, you will have a lot more mental resources to drive your company to success. Examples of such "attention takers" might be: customers, employees, advisors, products, markets and territories. 

Making the necessary cuts or applying enough control to not pursue new directions is not easy and usually not vary popular. However, the easy decisions and the right ones are rarely the same ones.

Keeping it Simple

"keeping it simple is well... simpler". This is a sentence from a conversation I had with a management consultant we hired. The guy was CEO of two companies and one of the things he strongly believes in is trying to stick to well established management methods and organizational structures. More specifically, this point was raised with regards to three subjects. The responsibility distribution between the executives, the way to measure employee performance and over specialization in employee roles but I guess the same ideas can apply to more areas.

Just to bring the the idea down to earth, here is an example of viable complicated solutions:

1. Executives with the following responsibilities: CEO, VP New Business, VP Existing Business, VP Product, VP R&D.
2. Employees that have the following titles: Sales Manager - new accounts (hunter), Sales Manager - existing accounts (farmer), Account manager (operations), project manager, customer support, Integration engineer.
3. Setting performance indicators to every employee and using it as a the main criteria to evaluate employees

And here are the corresponding simple solutions:

1. Executive with the following responsibilities: CEO, VP Marketing and Product, VP Sales, VP R&D
2. Employees have the following titles: Sales Manager, Project management and support
3. Evaluating employees in more standard ways

The benefit of making things simpler is obvious, there is less overhead, it's easier to explain and communicate both internally and externally and it's much more scalable. Guy Kawasaki, once said in one of his entrepreneurship sessions: "be innovative about the right things" meaning - your technology and product and not your organizational structure and business models.

As for me, I believe that this approach might fit some cases while in other cases, there might be good reasons to create more complicated solutions. However, the "cost" of not keeping it simple should be considered in the discussion.

Google AdWords Retargeting Feature Will Change the Face of the Web

In a recent post I commented on a troubling trend towards compensating publishers at the low-end of the funnel and the implications this may have on the entire online advertising industry. I anticipated that this problem will get solved over time and today we are one step closer to that. 

Earlier this week, Google announced a new feature for AdWords called remarketing (also called retargeting). Essentially this gives advertisers a way to present targeted ads to users who have already been to the advertiser website by planting the double click cookie. This new feature presents great value for advertisers and I'm sure it will be adopted quickly by the majority of the advertisers.

Putting aside the privacy issues that this new feature presents, Google just created a very big opportunity for publishers at the higher end of the funnel to get better compensation for "intent generation". As this new feature gets widely adopted it's implication on conversion rates will be quantified and it will be easy to associate a dollar value with the act of planting the cookie (flagging). I expect that soon after a new payment model will be developed to compensate such an act - let's call it cost per flagging (CPF). The advertiser will be able to plan a campaign where a user gets flagged on the publisher website if he reached certain criteria based on time of exposure to the ad, dwell time over the ad or some interaction with an interactive ad (widget). Since the advertiser can now associate a dollar value with the flagging he will be able to pay much higher rates in CPF as compared to CPM and since very little user actually click out of the publisher website, CPF will also yield more RPM/eCPM than CPC for the publishers.

This can have very significant implications on the entire web since it can revert the current trend towards the end of the funnel. Giving more revenue to the publishers at the higher end of the funnel means more quality online content and less annoying aggressive advertising which tries to get you to click out of the website. So essentially, it means better web experience for the users.

The implication on the online advertising industry can also be tremendous. The existing trend towards trapping the online advertising industry in the "intent harvesting box" can now be reverted and the advertisers will start shifting the huge brand advertising budgets from other media channels to the online channel as they will be able to measure the ROI on "intent generation" / brand advertising.

Startup Opportunities in the Online Advertising Market

I recently had the opportunity to read a post by Chris Dixon and was really inspired. Chris described a problem in the online advertising market which is a very interesting market for a startup as it's still growing, changing and creating opportunities to make things better.

The problem Chris described is that online advertising budgets are being more and more focused on what he referred to as "intent harvesting" as opposed to "intent generation". In a nutshell, what Chris is saying is that the appetite of the user is built over several visits to different websites but only the last one of them gets the credit for driving the purchase. 

I believe that this problem will get solved over then next 5 to 10 years. 

The online advertising market is part (a rather small one) of the overall advertising market. If we take a look at the bigger picture, the current trend is putting the entire online advertising at the risk of being trapped in the "intent harvesting" box and never reaching it's full potential. There are just too many people who will loose from that situation including the ones who are currently gaining from the trend.

This expected change will create a lot of startup opportunities.

Changes always creates startup opportunities. It's much harder to navigate a bigger company through a change then it is to navigate a small one and so some of the bigger companies wouldn't survive this change and some of the startups will become really big.

Online Sales - Doing it Right

My background is 100% b2b enterprise sales which are rarely done online. Since EyeView is all about increasing online sales, I had a lot of learning to do in order to understand how online sales works. What I discovered is that the basics are very similar - it's all about engagement and commitment.

In order to close a sale (either online or offline), you want to engage your buyer and then turn his engagement into commitment. This is done in multiple steps in which you get a commitment and then leverage it in the next step.

In offline sales, the engagement is done through a presentation and personal relationship and the commitment you want to achieve can be customer actions like:

1. Spending time learning about your product
2. Coming to your office
3. Risking his reputation by championing your product in the organization
4. Getting other resources in the company commit time to evaluate the solution
5. Making a commercial commitment

In online sales, the engagement is done through creative content and the best tool for that is video (check out www.eyeviewdigital.com). The commitment is usually done by the customer taking actions like:

1. Spending time on your website
2. Sharing with others
3. Giving away personal information (aka - signing up)
4. Downloading and installing something on his PC
5. Giving away credit card details (without payment)
6. Submitting a payment

If you want to see some good samples of how to do this right, check out EyeView, Yield SW, Readysite, Ginger SW and Caphyon. 

Job Interviews and Google Buzz

Leading a successful startup during the growth phases involves interviewing a lot of people. It's not an easy task to find the right people for your company and the price of an error can be very high - sometimes even higher then what the company can afford.

As most entrepreneurs don't have a lot of experience in this particular field it is a very good idea to get some help from the outside on that front. In EyeView, we received a lot of help from our VC (Gemini) human resources manager and from a consultant we hired for that task.

One of the advices I received from our HR consultant is that people give you a hint about their weaknesses through the aspects they choose to focus on when they talk about others and about themselves. Layers will often refer to people as being truthful or layers and will speak a lot about truth, lazy people might talk a lot about effort and insecure people will tend to talk a lot about confidence.

I wonder if the same applies for companies. What does it say when a company's logo is "Do No Evil"? To be considered especially in light of Google Buzz...

Are all twitter followers created equal?

Anyone who is using twitter knows that the followers count is one of the first things you look at in a profile. Someone with 10k followers is much more likely to be followed, listed, re-tweeted and replied to. This makes sense, since a high follower count means that lot of people thought that a certain individual is interesting. 

Well, that's not entirely true... If you look more carefully, you would notice that some people read their twitter stream while other don't, some people follow anyone who follows them and some people just follow people around just to get followed. Some twitter accounts are not even run by human beings, they are automated and their following indicates nothing about the person being followed.

Maybe a smarter way to do the scoring would have been to give every account 100 votes. If that account is following only 1 person, then that person gets 100 votes. On the other hand, account that follows 10K people, is basically spreading his 100 votes equally across 10K people giving only one of them 1/100 vote. You can further develop this by giving every account votes according to the number of followers they have. This means that if an account has 10K followers but only follows 1 person, that person would get 10K followers. On the other hand if an account has 1 follower and is following 10K people, each followed person would get only a very small fraction of a vote. 

This should help create a better twitter universe in which the follower count (vote count) is driven more by how interesting you really are and how many real people are following you as opposed to how many bots followed you in the hopes that you will follow them back.

When is The Worst Time to Raise a Round

One of the biggest mistakes a startup can make is to raise money under pressure. This is absolutely the worst time. Young entrepreneurs often make this mistake because they think of raising money only when they start having less of it. Well, that's a huge mistake.

A good advice I heard on this subject is that the best time to raise money is not when you run out of money but whenever your company is looking good. This means that whatever sum of money you raise, you should plan on spending it over 2 years and start raising the next round as soon as your company shows signs of growth even if you still have lots of funds in your bank account.

As counter intuitive as this may be, it actually makes a lot of sense. Besides the problem of raising money under pressure, there is also a big positive side to choosing your round timing proactively. When your financial charts start to look good, the economy is well and you have lots of time to present, pitch and convince you will have more options which eventually translates into higher valuations.

From what I have seen there are 2 main reasons why company's don't follow this guideline. The first one is simply because they try to focus on the business and not on raising money. However, when you struggle for funding, you have to put much more energy into raising money and you hurt your business because you are trying to cut costs. The second reason is because entrepreneurs think that they will get higher valuation if they will try to achieve more with the cash that they received but this doesn't happen because the pressure will just lower the valuation.

Small things that gets me excited or why MSFT still have a shot against Google

I’m trying a new feature from typepad that allows posting to my blog directly from my email. I haven’t tested it yet but am very excited to try this. This will be a nice addition to the set of applications which already allow me to post things directly from my email client. I can now fax from my email, update my twitter account, update SalesForce about the status of my clients, accept friendship requests in many social applications and of course – I can send emails.

Why do so many application try so hard to create interfaces to email? Because a lot of people (I would say most people even) use the email editor and especially Outlook as their primary Rich Text and HTML editor. In terms of functionality, the Outlook editor gives you almost every functionality you can get in Word and is miles ahead of any online text editor. Another tremendous advantage that email client has over online text editor is that it’s available offline and synchronizes automatically so you can compose and post even when you are not connected.

What does it all mean? Maybe it means that we still prefer a local client to a web based server and maybe Microsoft still have a shot in the battle against Google. Although Google is moving quickly into Microsoft’s territory with Google Apps and Android OS, Windows and MS Office are not Bing – it will be much harder for Google to win that battle.