Platt Perspective on Business and Technology

Building a startup for what you want it to become 38: moving past the initial startup phase 24

Posted in startups by Timothy Platt on June 17, 2019

This is my 38th installment to a series on building a business that can become an effective and even a leading participant in its industry and its business sector, and for its targeted marketplaces (see Startups and Early Stage Businesses and its Page 2 continuation, postings 186 and loosely following for Parts 1-37.)

I often refer to a business’ financials and its cash availability and flow as representing an equivalent to its life’s blood – vitally essential to its life and with any real interruptions in it quickly leading to business failure and even outright business death. And loss there, as traditionally documented in red ink, simply illustrates the general validity of this understanding as it has more generally been held by others too. Information and as both raw business and marketplace data and as processed actionable knowledge, can also be considered vitally essential to any business and on an equally ongoing and pressingly impactful basis. So if a business’ cash flow and related financials can be seen as being analogous to its blood supply, think of its information flow and availability, and access to accurate timely information at that, as being comparable to the air that that business would breathe if it were a living organism in a biological sense.

I have been addressing a set of risk management and related due diligence issues in recent installments to this series, that all directly involve the challenges of information development, use, storage and sharing, where business intelligence per se has become an increasingly valuable and sought-after marketable commodity in its own right. And the points of observation and conclusion that I have been raising and addressing here can only become more valid and more consequentially important:

• And both for their ranges of applicability within specific organizations
• And across all industries and business types that they would be included in,
• And for how their information management practices impact on the markets and the people who enter into them that those businesses ultimately all do business with.

I focused in the immediately preceding installment to this narrative progression: Part 37, on an increasingly pressing challenge that all information requiring businesses will come to face if they have not done so already.

• Legal requirements and restrictions as well as business ethics concerns, demand that personally identifiable and other sensitive information regarding customers and employees among others, that might cause harm to them if made openly publically available, must be protected.
• And I stress the importance of the ethical side to this imperative here, as a failure to safeguard sensitive, potentially risk-creating personal information can create marketing and image challenges for an inattentive business that can cost it financially and much longer-term than any regulatory agency-demanded monetary fine could. If a business comes to be seen in its target markets as being unreliable there and unsafe to do business with for its failures to safeguard information such as credit card numbers, potential customers who know of that failing will at the very least think twice before doing business with them and giving them those credit card numbers. And sales transactions with them are likely to slow down or stop as a consequence.
• Information, as noted above can be thought of as the air that a business breathes. And a failure to safeguard it, and a public awareness of that failure can become a noose around that business’ neck. But at the same time, businesses that seek to remain competitive find themselves in races to acquire and more effectively make use of seemingly ever-increasing volumes of this air: this all important information and both for more immediate transactional purposes as for example when developing effective customer relations and at point of sale events, and for their overall business planning and its execution.
• And that led me to a direct consideration of the challenge that I discussed in at least broad outline in Part 37 where the bigger and the more effectively, actionably organized and processed, big data becomes, the more of a mirage any attempt to anonymize individually sourced raw data that is included in it becomes.

I repeat and stress the above, both to allow for smoother continuity of narrative in this series and to make this posting more meaningful as a stand-alone narrative. And I also repeat, and I add expand on what I have already written of in this blog on this matter, because the challenge that I am raising and at least briefly addressing here is one of the most important ones that businesses are increasingly going to face and head-on, as this 21st century advances.

• Businesses increasingly face a conundrum here, from the conflicting needs they face to simultaneously wring as much possible descriptive and predictive value from the information that they hold as they possibly can,
• While at the same time limiting what can be inferred from it in understanding the people this data comes from, so as to explicitly protect their personal privacy and certainly as effective use of this information requires its sharing among wider ranges of potential stakeholders.

I offered a necessary part of any realistic resolution of this conundrum, when I noted the importance of actually checking to see how the progressively more inclusive big data systems in place in a business, might actually compromise any data anonymization and related risk minimization efforts that are also in place, through intentional effort made to “break” that anonymization as a risk management exercise. And that is certainly important for any business that initially develops those information resources, and certainly if any of their in-house developed and maintained data might go out of its doors, and either as marketable, profit generating commodities or as transactional data shared with supply chain or other partner businesses when carrying out specific sales transaction and related activities. But it also applies to acquiring businesses and certainly where they might intentionally or inadvertently further share this, and where their big data accumulation, aggregation and processing might further degrade any still-effective data source anonymization that was still in place from its various individual, more original sources.

I said at the end of that posting that I would turn here to more fully consider the three basic participant classes that enter into all of this, in light of the issues that I raise here:

• Data sourcing and providing businesses (which might or might not actually be data aggregating, developing and selling businesses as determined by their business models),
• Data acquiring and using businesses, and
• The original sources of all of this data with that ultimately coming to a large degree from individual consumers and customers.

I in fact begin this next step analysis here with businesses that explicitly gather in, aggregate, develop and sell individually sourced data as at least a key part of their business models, as explicitly cited in my anticipatory note as offered at the end of Part 37. And I do so at least in part with a goal of explaining why the white hat hacker approach to testing and validating any data anonymization system in place in a business, as touched upon in Part 37, cannot succeed, and certainly if it is employed as a stand-alone solution to this problem and not simply as one brick in a larger and more inclusive edifice. And I begin this with what has become the publically visible poster child if you will, for how not to behave as a business as far as personally sourced information is concerned: Facebook.

I begin that line of discussion by at least attempting to expose and perhaps explode what has become something of an overly simplistic and even toxic myth. When you look to the laws in place regarding personally identifiable, sensitive, risk-carrying information, and when you follow the ongoing public discussions as more commonly address this challenge, you essentially always see the same small set of data types showing up. And I of course, refer to social security numbers and related government-systems sourced personal identifiers, credit card numbers and the generally three digit security codes that also appear in conjunction with them, full names and addresses and phone numbers, etc, and precise healthcare and health status information to add in at least one general information category to this list. These data types, and categories are important and they do in fact represent genuine sources of risk and exposure vulnerability and both for identity theft and for direct monetary value theft and for other immediately impactful risk-creating reasons. But it is a mistake to focus essentially entirely on this smaller set of possible high value targets, for use and possible misuse. Ultimately the real risk can come from the cumulative amassing of vast and even seemingly open-ended amounts of individually sourced information that is in and of itself not sensitive and compromising but that holds a potential for collectively causing harm.

I only touch on one aspect of that possible and progressively more likely exposure problem in my here-continuing discussion of data anonymization through selective redaction, as begun in Part 37. And I only point beyond that to one small part of how such big data can be used for harmful purpose when I go beyond credit card number exposure and the like as more commonly considered, to make note of what Cambridge Analytica did in its efforts to subvert elections in the United States and elsewhere, beginning in 2013 (and also see Facebook and Cambridge Analytica: What You Need to Know as Fallout Widens.)

Facebook and its executive leadership have been called out on this, and more specifically for how their business practices in organizing, commoditizing and selling access to their members’ data made a Cambridge Analytica scandal both possible and even inevitable. But that is still only the now-visible tip of a much larger iceberg.

I am going to continue this discussion in a next series installment where I will, among other things discuss how Facebook incentivizes large, and even vast numbers of small businesses to use their platform for any online connectivity with their customers that they might enter into, in effect forcing those business’ customers to join Facebook if they need to online connect with these small business members. I will also discuss how Facebook sells information, and the impact of this on businesses that buy rights to it, and that buy advertising space on Facebook member pages that they target as members of specific market audiences based on this data. This will, among other things mean my specifically addressing the opportunities and challenges that startups and other newer businesses face as they make their due diligence, participate or not decisions here. And I will, of course, discuss the impact of all of this on individual Facebook members as they share more and more and more of their information through the site and with all of that going into Facebook’s marketable and sellable databases.

Facebook is currently, as of this writing, rolling out a new site design that is supposedly more privacy oriented and protective and that would be freed from at least a significant amount of the paying business sourced and other “friend”-deluge that floods most individual Facebook user’s pages now, drowning out any shared content that they might wish to see from people who they actually know. I will discuss their new website design roll-out too, where bottom line, data and member data in particular is still going to be Facebook’s most valuable marketable product and the most important source of revenue that they have too, and with its accumulation and sale still held as a central feature of their still ongoing business model from before.

Meanwhile, you can find this and related material at my Startups and Early Stage Businesses directory and at its Page 2 continuation.

Planning for and building the right business model 101 – 43: goals and benchmarks and effective development and communication of them 23

Posted in startups, strategy and planning by Timothy Platt on June 2, 2019

This is my 43rd posting to a series that addresses the issues of planning for and developing the right business model, and both for initial small business needs and for scalability and capacity to evolve from there (see Business Strategy and Operations – 3 and its Page 4 and Page 5 continuations, postings 499 and loosely following for Parts 1-42.) I also include this series in my Startups and Early Stage Businesses directory and its Page 2 continuation.

I have been discussing three specific possible early stage growth scenarios that a new business’ founders might pursue for their venture, in recent installments to this series, which I repeat here for smoother continuity of narrative as I continue addressing them:

1. A new venture that has at least preliminarily proven itself as viable and as a source of profitability can go public through an initial public offering (IPO) and the sale of stock shares. (See Part 33 and Part 34.)
2. A new venture can transition from pursuing what at least begins as if following an organic growth and development model (as would most likely at least initially be followed in exit strategy 1, above too) but with a goal of switching to one in which they seek out and acquire larger individually sourced outside capital investment resources, and particularly from venture capitalists. (See Part 35.)
3. And a new venture, and certainly one that is built around a growth-oriented business model, might build its first bricks and mortar site, in effect as a prototype effort that it would refine with a goal of replication through, for example a franchise system. (See Part 36 through Part 39.)

And more recently here, I have been analyzing and discussing these business development possibilities, for how they would address a set of three specific business performance requirements that are important for long-term success:

A. Fine tuning their products and/or services offered,
B. Their business operations and how they are prioritized and carried out, and certainly in the context of this Point A, and
C. Their branding and how it would be both centrally defined and locally expressed through all of this.

I at least preliminarily finished discussing the first of those due diligence issues: the above Point A, in Part 42, for all three of the above listed business development scenarios, briefly touching on Point B and C while doing so for how the three functionally interconnect. My goal here is to more fully and specifically address Point B and its issues as it plays out for the three business models under consideration here. And I begin by noting a point of comparison:

• The selection and fine tuning of what a business would bring to market as its defining source of revenue generating value might be influenced by outside forces, with that including market demands and pressures from their competitors. But ultimately, the most compelling drivers for this come from within the business itself, from its founders and owners and from its ongoing leadership as codified by them in its ongoing business model. And standardization of marketable, sellable production tends to be held as essential. So for example, if a business bakes rolls, all of its product should be of the same size and shape at least within very narrow preset limits and all should be made according to the same recipe for any given roll type offered and with tight quality control over ingredients used. And all should be cooked the same way and to the same doneness and all should packaged, and easy to package quickly for shipment and sale, in the same way too (bringing Point 3 into this narrative here too.)
• Higher level, internal to the business decision making plays a very significant role in the What and How of their business operations as actually carried out too. And that can mean standardized work performance patterns that significantly mirror those just noted for what the business would offer to its outside world. But when you look beyond the officially expected as detailed there, to see how business processes are actually carried out, you can often find that determined by a much wider range of in-house participants, with that larger stakeholder group also including mid and lower level managers and even non-managerial hands-on employees who actually carry out much of the work so specified. And this at-least capacity for variation, can be necessary and even essential if a business is to be flexible enough in order to be able to accommodate change and the unexpected, and certainly as it might more locally arise and even in day-to-day operations. Setting aside the questions and issues of when variation here is a positive and when it is a negative, it does happen and in ways and to degrees that would not be allowed for, or even make sense for products shipped out the doors and certainly within a single business and within a single one of its production runs.
• And outside considerations can and do have very significant impact on the operational What and How of a business too, and with a higher level of functional significance than might be expected in a marketable product context, and for entire functional areas of a business. Consider Finances and the outside mandated requirements of generally accepted accounting procedures (GAAP) as a perhaps best known example there, though outside regulatory forces can and in fact do reach into most if not all aspects of business operations, and for many types of businesses and for essentially all industries.

But for purposes of this discussion, let’s set aside outside-mandated, standardized demands and their pressures (as just exemplified here by adherence to GAAP) that all businesses would face, as leaving competitors on what at least in principle would still be a level playing field competitively. (Here, I set aside biased regulatory requirements that might for example explicitly favor larger already established businesses in an industry or sector, while thwarting possible new entrants there with new competing products or services that their more established peers would be less able to directly compete with.)

All three of the basic business scenarios that I have been discussing here since Part 33 are built around a premise of long-term stability and business strength, and all are built around a basic assumption of overall completeness in what they would carry out and be prepared to carry out operationally, in order to insure that happening. So for example, I did not include here, a fourth business development scenario in which a business founder, or founding team might build a new business venture with an explicit goal of selling it to some larger business entity through a mergers and acquisitions process, where:

• Some of the functional areas that they would assemble in it,
• And at least proof of principle development of all of its key marketable and sellable products or services might have to be very robust
• But where other more supportive capabilities might be left more vestigial as they would be provided by an acquiring entity that would be less inclined to have to pay for what to it, would be unnecessary duplications. (Think here in terms of founders who have ownership to a key next-step advancement patent or set of them, that seek to develop and prove the value of that holding in order to maximize its value to a buyer and its profitability to themselves.)

I offer this build-to-sell scenario, in the context of at least briefly mapping out something of a fourth case in point business development alternative. But the core details included in my tripartite description of it, also offers a simplified and even simplistic outline to what has become an increasingly complex options-rich range of business development possibilities and for a wide and growing range of business types: the three that I have primarily been addressing here included. And I at least acknowledge the legitimacy of that view of matters by posing some Point B oriented questions that the strategic decision makers of a new and forming, or more established and growing business might very well find themselves facing, which I phrase here as being asked of you, the reader:

• What are the core functionalities in this business that you would have to keep in-house, and develop and expand there as your business as a whole scales up (assuming once again that you would retain ownership of this enterprise and continue to lead it)?
• And what more supportive and ancillary functionalities and services might best be outsourced to third party provider specialists, where doing so would be more cost-effective and not carry additional new risk management issues? (And when and how might you do that and under what terms?)
• And focusing on functionalities and services that really should be maintained in-house, and particularly in distributed business systems, which of them should be managed from a home office or other more central facility and which of them should be managed and effectively owned, more locally?

At least aspects of what have traditionally been seen as Information Technology in a business are now routinely outsourced with that including server farms and enterprise-wide cloud storage and access management solutions, and the vast majority of web site and online presence support, or at least their more technical hardware and software underpinnings. And this type of outsourcing can and often does include call center operations and certainly for off-hours coverage when 24/7 customer assistance is a desired goal. And outsourcing can become an attractive option for at least areas of Human Resources and Personnel management too, to add a third increasingly common example of this here (see my series When and If It Might Make Sense to Outsource Human Resources, as can be found at HR and Personnel as postings 134 and following.)

I have in fact pushed this in-house versus outsourced dynamic to a lean and outsourced extreme in one of my earlier series: Virtualizing and Outsourcing Infrastructure, as can be found at Business Strategy and Operations as its postings 127 and loosely following (for its Parts 1-10.) More specific in-house versus outsource decisions become important in the types of context that I raise here, because they have stakeholder-responsibility and stakeholder-autonomy implications that can be shaped by a determination of precisely what type of business model and business development plan is in place. And to take that out of the abstract, consider the above-repeated business development Scenario 3, and at least potential areas for home office/parent company versus franchise facility/franchisee conflicts. What would and in fact should best be carried out and controlled system-wide from a parent company controlled and managed facility, and whether that means in-house maintained and operated or centrally contracted and managed-outsourced? And what should best be done by, and best be considered a responsibility of the individual franchisees in place and their local business outlets in these larger systems?

• Both overall cost-effectiveness and consistency, and market-facing standardization and the branding that serves as a public face to all of this, would enter into any realistic answer to those types of questions, and certainly as best for now solutions to them are to be sought out and implemented. And with that, I tie this back to the above stated performance Points A and C.

I am going to continue this narrative in a next series installment with an explicit focus on those market-facing issues, and with particular attention to Point C and its implicit questions and issues. And in anticipation of that discussion to come, I note here that we live and work in contexts that have increasingly come to expect and even demand social and environmental responsibility from businesses, and good corporate citizenship from them. So actually addressing the demands of Point C, of necessity have to include active consideration of Point B issues as well as Point A ones.

Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 5, and also at Page 1, Page 2, Page 3 and Page 4 of that directory. And you can find this and related material at my Startups and Early Stage Businesses directory too and at its Page 2 continuation.

Creating a clear and compelling focus when reaching out for venture capital funding support

Posted in startups by Timothy Platt on May 19, 2019

I have written a number of times in this blog, about venture capital funding as a means of jumpstarting a new business as it seeks to take off. And I have written here in at least general terms and about their overall average success rates from when they make their investment decisions. I have also written about the due diligence business planning and execution requirements that these investors require be met by the founders and owners of any business that they would invest in, as they seek to improve their changes of both preserving their investment capital in them and their chances of gaining significant profits from them. To take that detail out of the abstract, I repeat here that it is not uncommon for venture capital backers to insist on having a say as to who will carry chief financial officer responsibilities in a new venture, and particularly if that is not a strong suit for any of the founder entrepreneurs they are meeting with.

To repeat a significant detail here that goes a long way to explain both the prudence and the level of direct involvement that these investors show when selecting the new businesses that they would invest in, on average if a careful prudent venture capital firm invests in ten businesses that have met their basic selection criteria, then they can expect that:

• 4 of those ventures will have failed within their first five years,
• 3 will still be in operation but just be breaking even financially as based upon their actual revenue streams (thereby discounting business ventures that are being propped up from outside monies such as life savings from a founder),
• 2 will have reached at least a modest though reliable level of profitability, and
• 1 will have proven itself to be dramatically successful and profitable.

The problem is that it can be effectively impossible up-front to tell in advance which that one break-away success will be, or even which of these investment opportunities will ultimately fail. Standard and routine does not generally lead to break-away success and massive profits, even if it is more likely to actually succeed at least at more modest return on investment levels. It is successful businesses that are built around New and disruptively New, that if they work out are more likely to do so BIG. And this adds both greater uncertainty and greater risk into these investment decisions.

My goal for this posting is to in effect question, or at least expand upon the vision and understanding of venture capitalists and their business practices that I have just offered here. The 4:3:2:1 success model that I just repeated here is so often repeated that anyone reading this has probably read or heard it many times before, just to cite one of my above-written details. The above tells only part of a larger and more complex story and the better know of it at that.

My goal here is to at least briefly discuss in at least some more detail how venture capitalists actually make their invest or not decisions. And while that begins with a paperwork review of documents and document types that they request that a new venture’s founders provide, a key part of it also takes place when they actually meet with them: when the founders and owners of potential investment businesses get sit in a room or video conference with potential venture capital backers, giving both sides to these potential negotiated agreements a better understanding of who they might be working with from this, and how they think and act.

Carefully crafted written documentations are very helpful and informative, but they do not and cannot tell the whole story as they can be carefully drafted, and with third party expert assistance to insure that they effectively touch on all of the issues that investors would want to know about and see. They can be, in significant measure, the product of outside professional help.

People looking for new job opportunities and who do not have ongoing experience crafting effective resumes and cover letters on their own, or who do not see themselves as writing as effectively as they would want for this, hire the services of professional resume writers to help them tell their stories more effectively. Entrepreneurs who do not have experience writing business plans and who want to cover all of the bases for that more effectively, hire the services of professionals who make a practice of developing effective business plans. And when they want to favorably impress potential investors, and ones who would invest a significant stake in the businesses that they would pursue, they hire people who know from ongoing experience and practice, how to more effectively pitch a business too. So even if these documents are fundamentally accurate as to detail included in them, they might not actually say as much about the people who would set up and run this new business venture, as a potential investor in them would need to see.

The type of professional assistance that I just made note of above can and does include practice session face-to face-marketing pitches where coach consultants play the role of potential venture capital investors, and their clients practice presenting their new businesses and business ideas as viable and attractive investment opportunities. These exercises are generally carried out face-to-face and recorded, sight and sound so the entrepreneurs paying for this service can see exactly what they said and how, body language and wardrobe decisions and all. And this type of help can make a very positive difference, and certainly where that means these professionals helping their clients to be more comfortable and communicative. But either way: helping with the written documentation or with face-to-face live presentations, the people seeking support here have to have a genuine message to share, and a compelling one. And direct and preferably face-to-face meetings can be the best way to actually learn something about the people on the other side of the table.

I have read quite a few folders of supportive documents, and have sat in on venture capital pitch sessions. I was actually involved in initially setting up a business that helps individual venture capitalists and entrepreneurs seeking their support to meet each other, where investment seeking pitches are a key part of that. And more than that, I have had opportunities to discuss a fair number of the presentations that have taken place in these sessions, and with both the entrepreneur presenters who had just given their pitches, and with venture capitalists who were being pitched to. And I have seen from this, something of what does and does not work there.

My goal for this posting is to at least briefly outline some of the take-away lessons that I have learned from this experience, focusing on what the entrepreneurs in question need to bring to the table themselves – that they cannot buy from the hired services of a professional guide or coach or writer here.

I begin with the obvious points here, that I would express as a series of generally stated, orienting questions:

• What is your core driving business goal that would set your business apart from your competition, and that would most arguable generate a profitable income?
• And what supporting facts, that you can present as objective data and not just subjective opinion, could you briefly, succinctly and effectively offer that would justify and support your answer to the first of these questions?

The bulk of this can be and should be outlined and in sufficient detail in the written documentation that you would share with a potential venture capital backer, just to get your foot in the door with them. But you have to be able to effectively share the same basic message on your feet in a face-to-face meeting too.

You have to come up with the core lines of persuasive argument and supportive fact that would go into answering those questions, though professional help in better organizing and presenting your answers there can prove invaluable, and particularly for entrepreneurs who are more introverted and less comfortable with public speaking. But the single most important point that you can bring to this type of a presentation is a clear demonstration of your commitment to and enthusiasm for this new venture of yours. You want to be able to present yourself as being willing to walk through walls if need be, in order to succeed.

If two entrepreneurs offer factually similarly compelling pitches, as far as their business plans and financials details are concerned, but one of them presents with significantly more can-and-must-do enthusiasm, they are most likely going to get a positive response if either is, and the funding support that would follow that.

You need to convey a strong sense of enthusiasm and commitment, but one that is grounded in reality. And this means that you need to really listen, and both to succeed in understanding any concerns raised from across the table, and for when you respond to them. And you need to be able to present yourself as someone these investors can work with. Once again, this means listening. It also means knowing when and how to question a point made without coming across as simply arguing against it.

• As a vitally important point there, if you find that a potential investor is asking you questions that do not connect with what you are trying to say, or if they come across as making assumptions that you do not see as valid, always assume it was because you were not clear in what you said. Always assume that you might have left key details unsaid and assumed, that others not already involved in your planning could not know of.
• So be ready to ask clarifying questions to come into a more shared understanding of what you seek to say and of what you actually say; never take a confrontational approach or an argumentative one there; always seek to discuss these sticking point issues as if you and the people you were meeting with were on the same side of the table and simply trying to better understand each other while seeking a shared overall goal.

Any new business is certain to face unexpecteds and unplanned-fors. Venture capitalists look for entrepreneurs who will not quit in the face of adversity and who listen, and who will take and heed their advice as they seek to help course-correct for that. And effective venture capitalists do that: they actively seek to help with experience-based advice and guidance, in order to safeguard their investments if nothing else.

But the single most important point that I can raise here is that you never forget for a second, or seem to lose track of who you are pitching too. This means bringing everything that you say and all of how you say it into as clear and tight a focus as you can, for the people you are meeting with. These are busy people with multiple possible directions that they could invest their funds in. And if they have questions about who you are or what you would do or how, that is a real problem.

Think like a venture capitalist. They want to tilt the odds if at all possible to investing in fewer ventures that fail and more that become very profitably successful. So pitch for the likelihood of business stability and success in what you would build, and for how your venture would generate a genuine profitably that can give the people who invest in your venture, the returns on their investments that they want and expect. (Market analyses and related documentation and the details that you can succinctly share from them in a verbal pitch are going to vital here, but so will be your explanation as to how your venture would realize the value potential that this type of analysis would indicate. Think and plan your verbal pitches with your written documentation in mind, but with a goal of smoothly, effectively presenting their key details in more conversational form.)

But more than that, think like the specific venture capitalists who you are meeting with. Look them up, and their venture capital business online and really research them. What is a potential backer’s professional background like and where else have they worked? What industries have they worked in and how does their experience connect with or resonate with what you seek to do? Study them individually, just as they will background-research you. Are they an entrepreneur themselves, and if so, what types of businesses have they build and to what effect? What do they do professionally and to the extent that you can find out, what were or are their corporate cultures like that they have shaped, or preferentially worked in?

Can you find anything online or in print that they have written, professionally or more avocationally? What does this say about them? How do they express themselves there? Are there key words that your background research would suggest they would positively respond to? Are there key ideas or approaches that they favor that you might find of benefit in your venture too? Are there approaches that might be expected to turn them off? Apply this background research-grounded approach to any letters or other written documentation that they send you, as you read it and learn more about them in the process. And listen to what they say when and as you get to meet with them in person in the same way, and certainly when meeting with them to give your pitch for funding support from them. Listen to what they say and how they say it starting from your first introductory verbal exchanges and from before you actually get to stand in front of them to give your pitch.

And bring graphics and supportive information that you can share with the people you are giving your pitch to, that would support and enhance your message. This means keeping your sight and sound supports lean and focused; extraneous or ineffective content there can and will hurt you. And find out how long you will have to make your pitch and never run over that time limit, at least on your own initiative. Practice for timing as well as for content and be prepared to expand on the key points that you would make if asked to do so.

Going back to the points that I made about researching the people you would give these pitches to, that can be vital if you are to know what they would see as your key points, as they are the issues that they would ask for more about if anything. Here, “key points” are largely in the eye of the beholder.

I have covered a fairly significant amount of ground in this brief note; I have just scratched the surface of a complex and varied topic. So I will end this note with just one final organizing thought. Practice this. If possible start by pitching to potential angel investors with their perhaps tighter focus on the value of your business venture’s mission and vision statement, but who can take a more relaxed approach to your business fundamentals than a venture capitalist would. Take this meetings and these investment opportunities seriously in their own right, but use them as learning curve opportunities too.

Think of this as a funding support pitch counterpart, to practicing your job application interviewing skills in test runs with businesses and for jobs that you might not see as your top choices. And learn as much as you can from every try, practice or real, until you find and connect with the right venture capitalist who would be a good fit for you and your venture and who you would be a good fit for too.

You can find this and related material at my Startups and Early Stage Businesses directory and at its Page 2 continuation.

Leveraging social media in gorilla and viral marketing as great business equalizers: a reconsideration of business disintermediation and from multiple perspectives 15

Posted in social networking and business, startups, strategy and planning by Timothy Platt on May 18, 2019

This is my 15th posting to a series on disintermediation, focusing on how this enables marketing options such as gorilla and viral marketing, but also considering how it shapes and influences businesses as a whole. My focus here may be marketing oriented, but marketing per se only makes sense when considered in the larger context of the business carrying it out and the marketplace it is directed towards (see Social Networking and Business 2, postings 278 and loosely following for Parts 1-14.)

I began working my way through a to-address topics list in Part 11, that would apply to the analysis and planning efforts of a still resource-lean startup. And I repeat the first three entries in that list as I continue addressing them:

1. What types of change are being considered in building this new business, and with what priorities? In this context the issues of baseline, and of what would be changed from become crucially important, and even for startups where that means building new with an awareness of past experience elsewhere.
2. Focusing on the business planning and development side to that, and more specifically on high priority, first business development and operations steps that would be arrived at and agreed to for carrying out, and setting aside more optional potential goals and benchmarks that would simply be nice to be able to carry through upon too,
3. Where exactly do those must-do tasks fit into the business and how can they best be planned out for cost-effective implementation (in the here and now) and for scalability (thinking forward)? Functionally that set of goals and their realization, of necessity ranges out beyond the boundaries of a Marketing or a Marketing and Communications context, applying across the business organization as a whole. But given the basic thrust of this specific series, I will begin to more fully discuss communications per se, and Marketing, or Marketing and Communications in this bullet point’s context. And I will comparatively discuss communications as a process, and as a functional area in a business there.

My goal for this narrative-continuing posting is to complete my discussion of the above Point 2, at least for purposes of this series. Then I will build from that discussion thread and from what I have already offered concerning Points 1 and 2 in earlier installments, to delve into Point 3 and its issues. And I add to that, in further anticipation of what is to come here, that I have been discussing those and related topics in general business planning and development terms and certainly in this series. But this is a marketing and communications-oriented series at heart:

• Even when I write in the starting paragraph to each of its installments that understanding Marketing and Communications in a business, and making them work for it, requires an understanding of the business as a whole and its contexts, so everything can fit together and work together.
• So I will begin offering a specifically Marketing and Communications focus here too, in anticipation of pursuing that approach in a Point 3 discussion.

I begin all of this with the above-repeated (and here simplified) Point 2 as carried over from Part 14, by reconsidering its set of issues from a strictly here-and-now implementation perspective. And that means adding consideration of benchmarks and of explicitly specified final goals to this narrative.

Let me take that out of the abstract with a very real-world example, of a type I have seen play out many times in real businesses that in general have been well managed – but not for some specific “this.” That anticipatory starting sentence, indicating what is to come here, is probably too general and open ended, as I could easily and realistically cite any of a very wide range of familiar strategic and operational blind spots to this narrative here, that I have seen and that I have had to work with and work through, and with that type of discussion still meeting its vague goals. For a more “business functionality” example, I could cite and at least briefly discuss an inventory management problem where there are at least contextually recurring disconnects between in-house employee end users of stock or supplies held in inventory, and the ultimate suppliers of these items. But I will set that and similar case in point examples aside here, and simply note that for purposes of this narrative they are probably too obvious – and I have to add too easy, at least in principle to both proactively prevent and reactively correct from. Quite simply, these are types of issues that would be closer to the hands-on and more routine management experience of the mid-level and more senior management there, so they should start out better understood, and both for any problems in place and for finding effective ways to prevent or resolve them.

So I will pick a Marketing and Communications example here, and more explicitly, I will pick gorilla marketing as a working example (with a few references to viral marketing too):

• In a standard business process or business systems example, everyone involved generally knows the precise starting points and end points that should parametrically define what should be done and how and when, and certainly at a task-by-task or set business process by set business process level. This certainly holds for processes and tasks comprised of them, that fit into specific planned-out business operations chains and with those functionalities serving as tightly connected links in them. In that context, these functionalities should begin and quickly pickup in activity carried out, starting from the point in the overall work flow that they get their initial performance requests from and with any material, informational or other input that they would work from, coming to them from already completed work in that chain too. And they should in turn pass on their output to other next step processes or tasks in that chain and to the people who would carry them out as needed and expected too.
• But now let’s consider a gorilla marketing campaign, or an effort to jump start and encourage market-sourced and supported viral marketing on the behalf of a business. What is the starting point that you would use and what end points do you seek to reach, and how would you best benchmark performance in between those endpoint defining marks?

In principle, this might mean reviewing sales and related data to set an initial starting point benchmark to measure the success of such a campaign from. And this would take seasonal and other predictable cyclical sales patterns into account as well as any observably known longer term (non-cyclical) directional trends too. And goals would be set (e.g. to at least triple the number of positive shared messages about the company’s premium, up-market oriented widgets on Facebook in the next six months, with that translating to at least a doubling of sales for them by the end of this period.) Then performance tracking benchmarks would be selected and measured during that trial period to see how this marketing campaign is working, and to provide input for course correcting it if needed.

That sounds both reasonable and doable, and it should be on all measures as touched upon there, and certainly in principle. But in practice, all of these measures and the metrics that would track them can get very soft and uncertain. For an obvious example of how that can happen, consider the above-cited “positive shared messages … on Facebook.” What type of shared comment or update note, qualifies here as meeting that criterion? Is it sufficient to simply name one of the company’s widget models in text format, as long as nothing negative is said about it? Does it qualify as a positive if one of those widgets is prominently visible in a shared photo, as a matter of viral marketing product placement? What if it is just sitting there as what amounts to background clutter? How would that compare to photos where a widget is being actively used, and appreciatively so? What of mixed message updates that might include images or text that involves the company’s widgets, but in a partly favorable, partly unfavorable way? And how would the company take into account issues of visibility for any of this? Should they consider how many direct contacts such a content poster has on the site, and score higher value to marketing references that show on Facebook pages of account holders with larger numbers of Facebook “friends”? And I have not even mentioned the issues of robo-accounts and fake friending connections here, even though that has to be considered when somewhere over two thirds, and even something over three quarters of all Facebook accounts are almost certainly automated fakes, abandoned and unmaintained ghost presences, or both.

My point in all of that is very simple. Look over my original “reasonable and doable” benchmarking and goals description as offered just before the above paragraph. What defining elements of it can legitimately be assumed to be clearly defined and unequivocal besides the six month duration of this trial campaign? And objectively and given the uncertainties in everything else noted there, how realistic can that be too, and certainly as a meaningful timeframe for gathering in actionable value creating information and insight?

Gorilla marketing is nonstandard in nature. And that means at least some of the types of metrics that would be used, and that a business would want to use for performance tracking it, are going to nonstandard too, even as others will be completely familiar and well understood. Viral marketing might be initially instigated by a company that seeks to benefit from it, and people from their Marketing and Communications might even in fact seek to in some way steer it by selectively sending out marketing updates that would fit into it as fuel for further consumer sourced messages. But viral marketing per se is outside created and maintained, if it actually is viral in nature. And that adds novelty and a measure of the nonstandard to it too, and from the lack of message shaping control that that brings with it if anything. Outside sourced messages amplify and fade, and mutate and in unpredictable ways.

What I am saying here, in both continuation of what I have already offered in a Point 1 and Point 2 context in this series, is that while it might be both possible and easy to set endpoint goals and performance benchmarks for standard processes and procedures, the more novel they become, the more uncertain all of this becomes too. I am going to conclude my discussion of that set of issues in my next installment to this series, where I will at least offer some thoughts on how to make them more rigorous and more definitively useful as a result. And that will bring me directly to the issues raised in the above noted Point 3. Then after completing my discussion of that, I will turn back to Part 11 of this series to continue addressing its topics list as noted above here.

Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 5, and also at Page 1, Page 2, Page 3 and Page 4 of that directory. You can find this and related postings at Social Networking and Business 2, and also see that directory’s Page 1. And I also include this posting and other startup-related continuations to it, in Startups and Early Stage Businesses – 2.

Building a startup for what you want it to become 37: moving past the initial startup phase 23

Posted in startups by Timothy Platt on April 12, 2019

This is my 37th installment to a series on building a business that can become an effective and even a leading participant in its industry and its business sector, and for its targeted marketplaces (see Startups and Early Stage Businesses and its Page 2 continuation, postings 186 and loosely following for Parts 1-36.)

I have been discussing a succession of business intelligence-related risk management issues in this series since Part 31, and began discussing the challenges of data anonymization as a part of that in Part 36. And my initial goal at least for this posting is to continue my discussion of that complex topic, at least for purposes of this series.

I began discussing anonymization as a source of risk management concern when handling confidential and personally identifiable information, by pointing out how true, effective anonymization of original data sources is becoming increasingly difficult and even impossible at least as an effectively zero risk goal, as big data becomes bigger and bigger, and as it is more and more effectively organized into actionable patterns. To briefly reiterate the conclusion that I arrived at in my Part 36 narrative, the more comprehensive the overall set of data types collected and the more skillfully and comprehensively they are organized and processed into meaningful actionable patterns, the more and more likely it becomes that even just sets of what would seem to be anonymous data about some individual source, would indicate the values that must have been there for key individually identifying data fields that were redacted for anonymization purposes.

I then concluded Part 36 by stating that I would offer some thoughts here on how to move beyond this current and growing impasse where this tool: data anonymization has so significantly begun to fail us. Then after addressing that, as at least an initial first step response, I said that I will more specifically reconsider the impact that all of this has on:

• Businesses that provide big data as a marketable commodity,
• Businesses that buy access to it (startups included), and
• The ultimate sources of all of this data, with consumers and other individuals prominently included there.

And I added that after addressing those issues, I will circle back in this overall discussion to consider opt-in and opt-out options and systems, and the stealthy collection of more and more data and from more and more sources where neither of those choice possibilities are always meaningfully possible. Facebook’s user information comes to mind as a source of cautionary note examples there, and I will cite and discuss that business and its practices in this regard when I reach this point in this overall narrative.

• Meanwhile, I begin addressing that new list of topics to come here, with the question of how data anonymization might at least be made more secure than it is now, as a risk management tool for limiting liability faced from violating security oversight of personally identifiable information.

I begin this by acknowledging what might be the single most important starting point assumption that the developers, managers and users of big data should consider:

• Data anonymization might be important and even crucially so and for vast numbers of businesses and business models, and ultimately for the consumers who they would serve too.
• But it can never be made absolutely perfect: absolutely secure from a risk management perspective.
• So any real effort here should be directed towards making this process and the pools of data assembled from it as risk-reduced as possible. 0% risk is never going to be possible in the real world for any business or business process, so this type of risk limiting is in fact a realistic goal and one that would meet realistically effective risk management requirements. A realistic and I add acceptable goal here should be one of acknowledging that there are specific avoidable and unavoidable risks here, understanding how they arise, and reducing them to an acceptable level where possible, and with mechanisms in place for identifying and rapidly remediating any security and confidentiality breakdowns that do occur.

Now, how would I propose actively addressing this challenge? How would I propose carrying out the intentions offered in the above three bullet points and particularly in the third one of that set?

You can only control and minimize the risk faced from anonymizing increasingly comprehensive sets of data as gathered across larger and larger numbers of individual sources, if you actively test to see if and where it might be possible to infer redacted personally identifiable data field contents, from the accumulated patterns of what would still be included as anonymized data. You have to have a team that is dedicated for at least some significant proportion of their jobs, to actually trying to break the anonymization protections that have been attempted, by testing to see what they can learn from the data that is included in anonymized, “cleaned” data sets, that would breach efforts to protect the identities and other confidential information of that data’s original sources.

• Set up a white hat hacker team for this in-house, or outsource this testing to a reliable third party specialist service provider and preferably one that is bonded and that has insurance coverage included in their consulting agreements, in the event of confidentiality breaches in the data sets that they approve as meeting their due diligence standards.

This means looking at older data that is already held in these data repositories as well as looking at new data streams as they come in. It is in fact that older data that was gathered in before this issue rose to visible prominence that might prove to be the most problematical and precisely because of that fact, and certainly where it is mixed into new data and data types as they arrive.

• Ultimately, this is all about looking for, characterizing and understanding, and remediating blind spots in your thinking as to what types of data you actually have and how all of its data fields might connect together to tell a story about its original sources.

I am going to continue this discussion in a next series installment where I will explicitly discuss the three participants in any business information-as-commodity transaction: data aggregating, developing and selling businesses, data acquiring and using businesses, and the original sources of all of this data with that ultimately coming to a large degree from individual consumers and customers. And as noted above, my goal beyond that is to take this line of discussion out of the abstract by citing and at least selectively discussing, some real world business examples: Facebook definitely included there.

Meanwhile, you can find this and related material at my Startups and Early Stage Businesses directory and at its Page 2 continuation.

Planning for and building the right business model 101 – 42: goals and benchmarks and effective development and communication of them 22

Posted in startups, strategy and planning by Timothy Platt on March 31, 2019

This is my 42nd posting to a series that addresses the issues of planning for and developing the right business model, and both for initial small business needs and for scalability and capacity to evolve from there (see Business Strategy and Operations – 3 and its Page 4 and Page 5 continuations, postings 499 and loosely following for Parts 1-41.) I also include this series in my Startups and Early Stage Businesses directory and its Page 2 continuation.

I have been discussing three specific possible early stage growth scenarios that a new business’ founders might pursue for their venture, in recent installments to this series, which I repeat here for smoother continuity of narrative as I continue addressing them:

1. A new venture that has at least preliminarily proven itself as viable and as a source of profitability can go public and with all of the organizational change and all of the transparency and reporting requirements that this entails as they begin offering stock shares. (See Part 33 and Part 34.)
2. A new venture can transition from pursuing what at least begins as if following an organic growth and development model (as would most likely at least initially be followed in exit strategy 1, above too) but with a goal of switching to one in which they seek out and acquire larger individually sourced outside capital investment resources, and particularly from venture capitalists. (See Part 35.)
3. And a new venture, and certainly one that is built around a growth-oriented business model, might build its first bricks and mortar site, in effect as a prototype effort that it would refine with a goal of replication through, for example a franchise system. (See Part 36 through Part 39.)

And more recently here, I have been analyzing and discussing all three of these business development options, in terms of how they address a specific set of key issues that any business that connects with and serves a market in any way, would have to explicitly focus upon if it is to succeed, and certainly long-term:

A. Fine tuning their products and/or services offered,
B. Their business operations and how they are prioritized and carried out, and certainly in the context of this Point A, and
C. Their branding and how it would be both centrally defined and locally expressed through all of this.

I began a discussion of the first two business development approaches as listed above: the IPO and venture capital supported scenarios, and how pursuing one or the other of them would explicitly impact upon, and in turn also be shaped by Point A decisions and follow-through, with an at least brief digression there into Point C issues as well, as that and Point A consequentially and therefore operationally overlap. My goal here in this posting is to conclude my Point A discussion at least for here and now in this series, by explicitly considering how its issues would impact upon a franchise or similar growth business model, with its drive towards templated consistency as a path to successful expansion.

I in fact began my discussion of that business model scenario this context in Part 41 with a brief orienting discussion of product and service consistency, and both as a (Point C) branding issue and as a source of economy of scale and other value. Ultimately, franchise systems that succeed as such, tend to be consistent in what they do and in how they do it and in what they offer, and in the types of market and consumer-facing venues that they would conduct all of this through. That at least forms their basic business-defining patterns and both as a system of reliably consistent franchise outlets that a steady customer base would turn to, and as a reliable steady pattern that they can continue to grow from, from that.

At the same time, however, franchise systems have to be flexible in the face of overall marketplace trends and shifts, and in the face of more local-community needs and preferences too. And this means their capacity to both meet local needs and to prototype and test new offerings and new business approaches that might in fact become their new next overall system-wide norm or at least components of that.

• I wrote in Part 41 of the constraints and shaping pressures that businesses face and particularly in my discussions of the IPO and venture capital scenarios under consideration here. I would continue to use the term “shaping pressures” here in this context as well, but note that the constraints that I could cite in this narrative can be enabling and expanding as easily as they can be restrictive and limiting. In fact, and here I write with all three of the above business model scenarios in mind, successfully pursuing any of them of necessity means a business’ owners and senior managers being able to successful tip the balance there, where “enabling and expanding” outweighs any also-faced “restrictive and limiting” and both for operational flexibility and capability and for the business’ overall profitability and longer-term prospects for that.

And turning back to explicitly focus on franchise or similar templated growth and development scenarios again, this leads me directly to the issue of how such a business would in effect standardize and mainstream change and the testing and allowance of new and different into its systems, and as a matter of both what they do and how, and as a matter of branding and how they market and present themselves to the public too, as I will delve into in a Point C discussion that I will offer in a soon to come installment to this series.

I have already begun addressing the above Point B and its business process and operations issues in this posting and will explicitly focus on that complex of issues in my next installment to this series. And then as promised above, I will explicitly turn to and consider Point C and its issues as a separate topic area. And I will continue to draw out points of connection between these areas of consideration while doing all of this.

Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 5, and also at Page 1, Page 2, Page 3 and Page 4 of that directory. And you can find this and related material at my Startups and Early Stage Businesses directory too and at its Page 2 continuation.

Leveraging social media in gorilla and viral marketing as great business equalizers: a reconsideration of business disintermediation and from multiple perspectives 14

Posted in social networking and business, startups, strategy and planning by Timothy Platt on March 16, 2019

This is my 14th posting to a series on disintermediation, focusing on how this enables marketing options such as gorilla and viral marketing, but also considering how it shapes and influences businesses as a whole. My focus here may be marketing oriented, but marketing per se only makes sense when considered in the larger context of the business carrying it out and the marketplace it is directed towards (see Social Networking and Business 2, postings 278 and loosely following for Parts 1-13.)

I began working my way through a to-address topics list in Part 11, that would apply to the analysis and planning efforts of a still resource-lean startup. And I repeat the first three entries in this list as I turn to and begin to more fully discuss its Points 2 and 3:

1. What types of change are being considered in building this new business, and with what priorities? In this context the issues of baseline, and of what would be changed from become crucially important. I assume here that change in this context means at least pressure to change on the part of business founders, from the assumptions and presumptions and business practices of their past experience: positive and negative that they might individually bring with them to this new venture, and their thoughts as to how a business should be organized and run as shaped by all of their prior workplace experience. So I will consider change as arises in how the business is planned and run, at least as much as I do when considering what would be developed there and brought to market as product or service. I will mostly just cite and discuss the later for its contextual significance in all of this.
2. Focusing on the business planning and development side to that, and more specifically on high priority, first business development and operations steps that would be arrived at and agreed to for carrying out (in light of the above bullet point considerations here), and setting aside more optional potential goals and benchmarks that would simply be nice to be able to carry through upon too,
3. Where exactly do those must-do tasks fit into the business and how can they best be planned out for cost-effective implementation (in the here and now) and for scalability (thinking forward)? Functionally that set of goals and their realization, of necessity ranges out beyond the boundaries of a Marketing or a Marketing and Communications context, applying across the business organization as a whole. But given the basic thrust of this specific series, I will begin to more fully discuss communications per se, and Marketing, or Marketing and Communications in this bullet point’s context. And I will comparatively discuss communications as a process, and as a functional area in a business there.

I focused more on the Who and How of key business decision making when addressing the above Point 1, and with the What of that considered essentially entirely in general terms. Point 2 specifically focuses on what the high priority issues are that a given startup would face, and on decision making processes and their follow-through that would lead at least ideally to their smooth and efficient resolution. And Point 2 also begs the question of how these high priority issues and needs would be identified and characterized, and both for their achievability and with what resources required for that, and for their overall needs-based priorities – setting them apart from the “more optional potential goals and benchmarks that would simply be nice to be able to carry through upon too” as noted there as well. And to further put Point 2 in perspective in this series and in this portion of it, Point 3 continues on from there, with a now-determined list of high and highest priority tasks and goals agreed to, and with their actual resolution the topic of discussion.

I continue my Part 13 discussion here with a fuller and more organized consideration of Point 2 from the above topics list, as outlined in the above paragraph, and with the question of what to do first and even right now, and what to set aside for later if at all. And I begin doing so by acknowledging that I in fact sneaked part of my answer to that challenge into the above paragraph when outlining how I would propose responding to a Point 2 challenge, when I made note of resource availability.

• Ideally, task and goals prioritization would be based entirely on here-and-now and anticipated upcoming need. But that approach can only apply, and certainly as an automatic and always-resorted to option if there are and always will be sufficient resources available and of all required types, to make it possible for a business to carry out essentially whatever it seeks to do, whenever its leadership decides that they would like to do so.
• In the real world, need and desire have to be tempered by limitations faced in what can be done, and on consideration of when the resources required for that might become possible for doing that work, and at what costs. Resource limitations and the performance bottlenecks and barriers that they create, determine the doable here.

This pair of linked points is important. And while they might seem obvious when stated as above in the abstract, it can be easy to lose track of their message in the heat of the moment and when facing immediate and impending pressures to effectively perform, in carrying out next building steps in launching a new business venture. I have certainly seen new businesses get caught up in what from a perhaps more objective perspective, might seem to be resource expending inconsequentials, and particularly when they primarily would serve to support a founder’s vision of themselves and of what they would at least ideally seek to build in their business – as an expression of that. Though ego is not the only source of challenge that can be added in, in this way here, that can skew how tasks and goals are prioritized and carried out or not.

Ultimately, the filtering and selecting of Point 2 requires dispassionate reasoning: reasoning that can both starkly illuminate and serve to evaluate the value of the assumptions and presumptions that founders can bring to the table. And as a positive measure, this winnowing and prioritization process more clearly helps to determine what would in fact be good for, and for-now best for the business as an enterprise. (As an aside, I add at this point in this narrative that this is where a founding team that is too caught up in their own agendas and their own understandings of them can find value in bringing in an outside consultant who can offer a more dispassionate outside perspective, and who will then leave when finished.)

I am going to conclude my discussion of Point 2, at least for purposes of this series, in the next installment to it where I will add consideration of benchmarks and more finalized goals to this narrative. My goal in that is to take this posting’s discussion of that topics point at least somewhat out of the abstract by addressing it as an explicit trackable path forward and not just as a more vaguely goals-oriented intention. Then, as promised above I will more explicitly turn to and address the above Point 3. And turning back to the more complete to-address list that those three points were excerpted from as initially offered in Part 11, I will then work my way through the rest of that more complete list too. And I will more explicitly tie this more business-wide narrative back to a marketing and communications context too.

Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 5, and also at Page 1, Page 2, Page 3 and Page 4 of that directory. You can find this and related postings at Social Networking and Business 2, and also see that directory’s Page 1. And I also include this posting and other startup-related continuations to it, in Startups and Early Stage Businesses – 2.

Building a startup for what you want it to become 36: moving past the initial startup phase 22

Posted in startups by Timothy Platt on February 8, 2019

This is my 36th installment to a series on building a business that can become an effective and even a leading participant in its industry and its business sector, and for its targeted marketplaces (see Startups and Early Stage Businesses and its Page 2 continuation, postings 186 and loosely following for Parts 1-35.)

I have been successively discussing a brief but important set of issues in this since Part 31 that deal with business intelligence, and particularly where that is originally sourced from individual people (e.g. individual customers) and from other businesses, and where that increasingly includes more and more types and quantities of sensitive and confidential information. And in the course of that I have at least selectively touched on the issues of how this information is gathered, organized, processed and used, and both in-house by an original aggregator business and as a marketable commodity that such a business would sell as a product or service, and primarily on a business-to-business basis.

And that has led me to the final complex of issues that I would address here in the context of this series, at least as far as this understanding of raw and processed information is concerned, in a business intelligence context. One of the key tools used in safeguarding the security and confidentiality of initial sources of all of this data and certainly as raw data, is to anonymize it, stripping it of personally identifiable markers that could be used to link it to any particular individual source. And according to that approach, most such data would be pooled demographically for use, with a much smaller amount of this excerpted out as anonymously sourced case in point examples.

That noted as background for what is to follow here, my last to-address point from the above-cited topics list that I have been working my way through here, is:

• “And that will mean addressing the sometimes mirage of data anonymization, where the more comprehensive the range and scale of such data collected, and the more effectively it is organized for practical use, the more likely it becomes that it can be linked to individual sources that it ultimately came from, from the patterns that arise within it.”

The bigger that big data becomes and the more effectively it can be and is organized into actionable knowledge, the more likely it becomes that any effort to so mask and anonymize its individual sources becomes problematical at best. And that failure of effectiveness in what has become a basic standard for managing personal privacy and for limiting individual source exposure – and for limiting the liability that can result from loss of effectiveness there, is going to become compelling overtly obvious in the coming years.

Simple data anonymization as achieved by algorithmically stripping out overtly personally identifying and similar problematical data fields, while preserving and aggregating the rest for use, can no longer be presumed to work as hoped for and with that leading to a loss of privacy and a loss of positive control over most any attempted anonymizing process currently in use and with an increased risk created from that for the businesses that would develop and market, or acquire and use such information resources.

• And this calls for new understandings of data anonymization that would actively promote the development of demographic and other data resources that can remain effectively anonymized,
• And new information management processes and technologies that would work more effectively in a big data context and regardless of how that scales up.

This is important. Traditionally, hacking with its overt theft and use of data from information storage systems, has been considered the one real threat to the anonymity of ultimate data sources. Loss of control of accumulated and maintained stores of credit card account and related personally identifiable account holder information immediately comes to mind for many in that context, and reasonably so.

But anonymization per se as it is currently more routinely carried out, in the risk management-mandated processing of increasingly comprehensive flows and accumulations of individually sourced data, is at least as big a source of threat now.

Let me take that out of the abstract with a simplistic but nevertheless realistic example. Consider a demographics level database resource that includes in it individually anonymized records, that is offered on a business-to-business basis to other enterprises. And in this example, those records include those individuals’ zip codes and the honorific that they use: Mr., Mrs., Ms., Miss and Dr. If a zip code included there covers a large population as would for example apply in most any large densely populated urban setting, this would likely afford significant anonymity for any individual whose data is included there. But consider a small town and its unique identifier zip code, with one physician living and working there. And she is the only one there who actually uses the title Doctor, and its Dr. abbreviation. In that case, any records associated with “Dr.” as an “anonymous” designator could readily and quickly be linked to that one individual.

Big data, by its very nature, allows for and supports finer detail mapping and understanding of whatever overall data universe and its source that is under consideration. That finer granularity in effect turns even the largest and most densely populated community into readily distinguished and identified small towns and villages, to keep with the terminology of my above-offered example. And that, increasingly puts all of us that much closer to being in the more readily identified position of that small town doctor, and regardless of the fact that our individual names and home addresses, etc are redacted from it as directly offered.

• The bigger and more comprehensive the big data in question and the more carefully and thoroughly it is organized and analyzed, with the accumulation of processed knowledge that comes from that, the smaller the small towns of this become. And in this regard, I offer reference here to a series that I wrote to this blog a few years ago: Big Data (as can be found at Ubiquitous Computing and Communications – everywhere all the time as postings 177 and following for its Parts 1-7. And I make particular note here to one particular installment in that: Big Data 1: the emergence of the demographic of one. I primarily focused there on the more positive side of this, and turn here to address the negative potential in ever-growing big data too. Both sides to that are very real and both will become increasing so in the coming years.

To round out this posting and its line of discussion, at least for here and now, I conclude it by offering three news and analysis links from the open online literature:

Once Again With Feeling: ‘Anonymized’ Data Isn’t Really Anonymous: a tech podcast reference.
Your Anonymous Data isn’t as Nameless as Companies Would Have You Believe, Researchers Say: from the news and current affairs division of the Global Television Network in Canada.
• And Anonymous Browsing Data Isn’t As Anonymous As You Think: from Forbes Magazine, Feb 17, 2017.

Big data and its impact have become essential parts in our day-to-day lives and certainly as they have come to be shaped by our online experience, but also in our more directly real world experiences too. I write here in this series of businesses and their acquisition and use of market-sourced and I add marketable data. But I write just as specifically and directly here, about all of us as individual consumers and citizens too, as the ultimate sources of so much of that data.

Anonymized data has become a basic tool for both safeguarding our individual privacy and confidentiality in all of that, while supporting our having progressively more personalized experiences with the businesses and other organizations around us that also enter into and shape our overall communities. I am going to continue this discussion in a next series installment where I will at least offer some thoughts on how to move beyond this current and growing impasse where this tool has so significantly begun to fail us. Then after addressing that, as at least an initial first step response, I will reconsider the impact that all of this has on:

• Businesses that provide big data as a marketable commodity,
• Businesses that buy access to it (startups included), and
• The ultimate sources of all of this data, with consumers and other individuals prominently included there.

And I will also circle back in this overall discussion to consider opt-in and opt-out options and systems, and the stealthy collection of more and more data and from more and more sources where neither of those choice possibilities are meaningfully possible.

Meanwhile, you can find this and related material at my Startups and Early Stage Businesses directory and at its Page 2 continuation.

Planning for and building the right business model 101 – 41: goals and benchmarks and effective development and communication of them 21

Posted in startups, strategy and planning by Timothy Platt on January 24, 2019

This is my 41st posting to a series that addresses the issues of planning for and developing the right business model, and both for initial small business needs and for scalability and capacity to evolve from there (see Business Strategy and Operations – 3 and its Page 4 and Page 5 continuations, postings 499 and loosely following for Parts 1-40.) I also include this series in my Startups and Early Stage Businesses directory and its Page 2 continuation.

I have been discussing three specific possible early stage growth scenarios that a new business’ founders might pursue for their venture (see Part 33):

1. A new venture that has at least preliminarily proven itself as viable and as a source of profitability can go public and with all of the organizational change and all of the transparency and reporting requirements that this entails as they begin offering stock shares. (See Part 33 and Part 34.)
2. A new venture can transition from pursuing what at least begins as if following an organic growth and development model (as would most likely at least initially be followed in exit strategy 1, above too) but with a goal of switching to one in which they seek out and acquire larger individually sourced outside capital investment resources, and particularly from venture capitalists. (See Part 35.)
3. And a new venture, and certainly one that is built around a growth-oriented business model, might build its first bricks and mortar site, in effect as a prototype effort that it would refine with a goal of replication through, for example a franchise system. (See Part 36 through Part 39.)

And I continued that overall narrative in Part 40 with a set of more general comments, and by raising some generally framed questions of a type that at least categorically would apply to most any next-step business development scenario that might be considered, and certainly early on. Then I concluded that posting with a set of three issues that would have to be addressed and for most any business that would operate in a business-to-consumer context: issues that would enter into their core decision making and its execution as effort is made to build that business to be as competitively effective as possible:

A. Fine tuning their products and/or services offered,
B. Business operations and how they are prioritized and carried out, and certainly in that context, and
C. Branding and how it would be both centrally defined and locally expressed through all of this.

There are two basic approaches that I could pursue here as I seek to parse out and analytically identify and discuss the issues just raised in that list. I could discuss all three of those points in order as a group, and successively so for each of the three development scenarios listed towards the top of this posting and under consideration here. That would mean my addressing each of those business development scenarios in turn and with them serving as my primary focus of attention here. Or I could more fully discuss each of these issue points, one at a time as they would arise and play out for each of the scenarios under consideration, and with them serving as my primary focus of attention. I have decided to follow the second of those organizing approaches here, and proceed as follows starting with Point A and products and services offered, or still just under consideration for that to round out this topics point.

Point A: At least in principle, the founders of a business can and do decide on their own what products and/or services they might pursue offering through their own business venture. But in reality, they always face at least some shaping influences there, and even in a simplest case organic growth oriented business model where all funding available or sought out, comes from the cash flow and positive revenue generation of the business itself, as supplemented by funding that they themselves would bring to the table, and with their not having to answer to others as equity holders in this. In that case, outside influences would still arise and have to be accommodated, as coming from their intended markets and from their understanding as to what would effectively, and profitably sell there. And more such pressures would come from their likely and current competition, as they seek to gain and retain a maximum possible market share in the face of their offerings. Both the above-stated Scenarios 1 and 2 are based on the founders and owners of a venture securing outside funding, with any additional shaping constraints added that those funding sources would attach to the support that they offer. And while Scenario 3 as stated towards the top of this posting might be centered around organic growth and arise free of the types of outside equity ownership voices that Scenarios 1 and 2 would invoke, building with a goal of expandability into what might become an open-ended range of local markets and market types can easily place at least some product and service restraints on what they could effectively offer too, and certainly if they seek to benefit from economies of scale across their entire growing business empire and if they seek to remain consistent enough across their overall system for how they develop and support unified consistent branding. Pressures towards uniformity as arising from these considerations can limit this type of business in its ability to meet more locally community-based product and service needs and certainly where such diversity would impact on any business-wide brand-specific product designs supported, as an important case in point example here.

Focusing on Scenario 1 for the moment in this Point A context: when a new or still young business seeks out initial public offering (IPO) funding, it has to be able to argue a case for its receiving such support from both:

• Prospective shareholders who would actually invest in it,
• And from stock market analysts who those prospective investors would turn to as a key part of their due diligence when deciding where to invest and with what levels of their available funds.

This means the founders and owners of such a business, would have to be able to effectively argue a case that they seek to bring profitably attractive products and/or services to market, and in ways that would at least maintain value in this enterprise as benchmarked against the price these investors would pay per share and put into it, and with at least some additional value added for them, as coming from profits generated too. And they would have to be able to market and present themselves for being likely to accomplish this, in ways and according to timeframes that those market analysts would see as meeting their reporting needs.

Dividends: those additional profits as doled out to investors on a per-share basis, might not be as important for successfully arguing that a business is a good investment if that business and its leadership can present themselves as a growth company with long-term investment value, rather than a more strictly income generating one that would primarily offer short-term and ongoing cash returns on investment. But that calls for a demonstrable focus on innovation and on this business setting out to grow and evolve and effectively so. And even then, most shareholders still expect at least modest regularly offered dividends too. And those dividends and a business’ capability to reliably and consistently offer them, becomes even more important when and as a business is positioned more as a profit-oriented venture.

• Either way, all of the stock market analysis that shareholders and prospective shareholders would turn to when making their investment decisions, would be developed on a short timeframe, and generally largely on the basis of just the most recent business quarter or half year. That would put pressures on this business to develop and offer their products and any New that they could bring to them, as quickly and efficiently as possible.

Now let’s consider this same issue point from the perspective of the above Scenario 2, and with the guidance and the pressures exerted by venture capitalists added into a basic organic growth, default business model here. Some venture capitalists selectively make at least some longer term investments and commitments to the ventures that they buy equity in through their funding. But all venture capitalists, as such, invest in what their due diligence effort would show to be likely up and coming business successes, and with a goal of gaining profits and large ones from those investments that do develop that way to cover their losses from those that do not – while still leaving a significant profit margin for the investor.

Most of the time that means their seeking out quick returns on the investments that they enter into, so they can keep their investment funds moving and working for them and not tied up in any single client business. This puts pressures on the businesses that they do chose to invest in, to develop and capture as large and profitable a market share, and as quickly as possible and with corners cut if necessary in longer-term business development preparation where that might compete for funds with this market-facing effort. All of this, of necessity, has an impact on what is going to be brought to market and how and how quickly it would be updated and tuned for greater market impact.

Scenario 3 obviously has its expected forms of impact in this issue too. I am going to continue this narrative in a next series installment where I will complete my discussion for here, of this Point A issue. Then I am going to move on from there to address the above Points B and C next, also doing so in terms of the three scenarios under direct consideration here, with commentary added as needed regarding a fourth: organic growth scenario too, as called for. And then, and with this overall narrative thread in place, I am going to discuss a core point of consideration that readily emerges from it:

• How a new, young business begins, determines if and how it can accommodate and support flexible adaptability and resiliency as it moves forward,
• With the details of that determined and shaped by what type of basic organizing path that venture seeks to follow in its business plan and its execution (where I have been discussing a set of such determinative options here in these postings.)
• Think of this as a matter of looking for longer-term consequences as they would more, or less likely arise depending on how some key early decisions are made.

Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 5, and also at Page 1, Page 2, Page 3 and Page 4 of that directory. And you can find this and related material at my Startups and Early Stage Businesses directory too and at its Page 2 continuation.

Leveraging social media in gorilla and viral marketing as great business equalizers: a reconsideration of business disintermediation and from multiple perspectives 13

Posted in social networking and business, startups, strategy and planning by Timothy Platt on January 9, 2019

This is my 13th posting to a series on disintermediation, focusing on how this enables marketing options such as gorilla and viral marketing, but also considering how it shapes and influences businesses as a whole. My focus here may be marketing oriented, but marketing per se only makes sense when considered in the larger context of the business carrying it out and the marketplace it is directed towards (see Social Networking and Business 2, postings 278 and loosely following for Parts 1-12.)

I began discussing a set of issues that would arise for well established businesses that have become set in their ways, in the context of this type of series, in Part 2. And I then switched directions in Part 11 to at least begin to consider a newly forming startup example in contrast to that, which I have cartoonishly summarized for its basic form as:

• A new, young, small startup that seeks to leverage its liquidity and other assets available as creatively and effectively as possible, and from its day one when it is just starting to develop the basic template that it would scale up and grow from.

And as an orienting starting point for what is to follow, in fleshing out and examining that type of case study example, I offered a to-address topics list that can be considered startup-oriented in its basic tenor and orientation, which I repeat here for its first three entries for purposes of this posting:

1. What types of change are being considered in building this new business, and with what priorities? In this context the issues of baseline, and of what would be changed from become crucially important. I assume here that change in this context means at least pressure to change on the part of business founders, from the assumptions and presumptions and business practices of their past experience: positive and negative that they might individually bring with them to this new venture, and their thoughts as to how a business should be organized and run as shaped by all of their prior workplace experience. So I will consider change as arises in how the business is planned and run, at least as much as I do when considering what would be developed there and brought to market as product or service. I will mostly just cite and discuss the later for its contextual significance in all of this.
2. Focusing on the business planning and development side to that, and more specifically on high priority, first business development and operations steps that would be arrived at and agreed to for carrying out (in light of the above bullet point considerations here), and setting aside more optional potential goals and benchmarks that would simply be nice to be able to carry through upon too,
3. Where exactly do those must-do tasks fit into the business and how can they best be planned out for cost-effective implementation (in the here and now) and for scalability (thinking forward)? Functionally that set of goals and their realization, of necessity ranges out beyond the boundaries of a Marketing or a Marketing and Communications context, applying across the business organization as a whole. But given the basic thrust of this specific series, I will begin to more fully discuss communications per se, and Marketing, or Marketing and Communications in this bullet point’s context. And I will comparatively discuss communications as a process, and as a functional area in a business there.

Note: I also outlined some of the essentially axiomatic assumptions in Part 11, that I would bring to my analyses and discussions of all of the topics points and their issues as listed there: the above-repeated first three included. And I recommend that you review them as discussed there. That noted, I began addressing the above restated Point 1 in Part 12, focusing there on a need for effective negotiations as involved stakeholders air and argue the case for their respective understandings of the goals and priorities faced, for developing and building this new business venture. And my goal here is to finish addressing that Point 1 and its issues, at least for purposes of this series, and to at least begin addressing Points 2 and 3 as well.

To be more specific here, I approached Point 1 and its issues in Part 12 of this series, by primarily focusing on the fundamental need for informed and mutually agreed to consensus, among key stakeholders:

• As to what type of business a startup is to grow into, as it realizes its business model,
• And what its goals and priorities should be, at least in a more immediate here-and-now context, and for next steps that would be taken moving forward beyond that.
• And to add one more detail to that summary: the earlier that any really significant points of disagreement can be identified and worked through among the key stakeholders of a business, at least to the level of their arriving at basic workable functional agreement, the better. Problems of that sort that are set aside for later consideration, only fester and grow.

I turn here to consider a What and How counterpart to that Why. And I begin addressing this half of my response to Point 1 by dividing this approach to its issues, into two areas of consideration:

• What specific tasks would be agreed to and for type and priority? And what specific tasks act more as focus points of disagreement?
• And Who arrives at the determination in any finalized sense of how these discussion point decisions would be resolved and by whom, at least for immediate and next step purposes as the business proceeds forward? I simply note here in generic, generally stated response to that question, that there are circumstances where stakeholder priority in arriving at and phrasing such resolutions would best be based on equity ownership in this venture and on position and title held, and some would best be based on specific relevant expertise and certainly for more technical issues and their tasks. The details as to how this would and should play out, would of necessity be business, and business-model specific and depend on the nature of, and the decision making influence of the emerging corporate culture coming into place.
• Who would make these relevant binding decisions as far as the second of those points is concerned, when determining how specific business decisions would be parsed out according to those decision maker options? And how would their decisions and conclusions, or their recommendations if so identified, be supported and moved forward on?

The first of those points is explicitly What oriented. And together, the second and third points of that set, at least begin addressing the How (and the by whom) side of the issues raised in Point 1, above. The rest of any such answer to the question as raised there, becomes a matter of personality, and of leadership and followership, as can be found or encouraged among the key decision making stakeholders of a business. And the patterns that arise from this process, lay the foundations of the overall corporate culture to come at this new business as it becomes established and begins to grow beyond the initial founding team.

And with that, I offer a word of explicit warning:

• I have seen startups and early stage businesses succeed and even to spectacular degrees. And I have seen them flounder and fail too. And one of the core, fundamental differences between these two outcomes-defined groups can be found in how well the decision makers there, and those who can influence and shape the consequences of their decisions, can come to agreement and achieve alignment in what they do there, or fail to do so.

Abraham Lincoln’s so relevant words come to mind for me as I ponder what for me, is a repeatedly validated point of observation that they compel: “a house divided cannot stand.” Lincoln had a very different and I add more societally impactful context in mind when offering this advice, but it applies in the smaller scale of individual businesses too.

This, as experience shows, can be an even more important metric of overall likelihood of success for a business, long term, than the challenge of arriving at an effective way to profitably monetize what a business would offer to market as its primary product or service. Google, to cite a well known example there, and its founders, knew that they were building a business that would offer a best of breed online search engine as the core element of its overall market facing offerings. And they were effectively aligned in this and in how to proceed in developing their business for this. But they did not in fact work out the details as to precisely how they could best create a profitable service that would enrich the business (and themselves) from this, and even until after they initially went IPO for this venture.

They knew basically what they wanted to do and they were able to effectively capture the imagination of the public that they were trying to reach with this business, and with their online search tools. And they were able to come to sufficient agreement on all of the key business development issues that they faced as they organized and launched and began to grow this new business. And they captured a very significant market share for what they would do. Then, they figured out in more fully working details, precisely how they would earn money from all of this productive effort. Were some of those steps carried out in a very contrarian order, and one that other new businesses would best avoid trying to emulate? Yes. But they did get the most important of their basic business development decisions and steps worked out early, and even from the beginning – and at least effectively enough to make it possible to move forward in achieving all of the rest. They were at least working together in all of this, and certainly for all of the really important issues and decisions that they faced.

And with that offered here, I will turn next to more directly and fully consider Points 2 and 3 from the above list, which I just touched upon in the above narrative. Then after completing my discussions of those topic points and their issues, I will proceed through the rest of the Part 11 to-address list points, as offered in detail there. And I will connect this overall narrative as I have been developing it here, to a more strictly Marketing and Communications context, noting in advance of that, that

• While it is not possible to effectively discuss that area of business activity, or its more social media-based forms without considering the business and its markets that would enter into that,
• It is still necessary to tie any such contextual narrative back to Marketing and Communications again too.

Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 5, and also at Page 1, Page 2, Page 3 and Page 4 of that directory. You can find this and related postings at Social Networking and Business 2, and also see that directory’s Page 1. And I also include this posting and other startup-related continuations to it, in Startups and Early Stage Businesses – 2.

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