Your mature small manufacturing business needs to change? Advice from an expert

Michelle van Schouwen kindly interviewed me for the Succeeding in Small Business Blog. The post, called "Your mature small manufacturing business needs to change? Advice from an expert" reviews some of the core tips of the training I provide through the Lean Innovation Institute. Thanks Michelle!

KISS Canvas: 2. Pains

[This is a part of a series on the KISS Canvas] Once you have identified who your customers are, your next job is to gain deep insights into their pains. This video walks you through the PAIN box of the KISS Canvas, but more importantly, gives you tools for finding the pains that you must solve first if you want to succeed.

https://www.youtube.com/watch?v=aQkOMKe4sG0&index=1&list=PLdfQKNp8w2QmnYEF5jlgQVTOixHXrSBG4

Here is each sub-lesson:

  1. Introduction
  2. Pains are felt by the customer
  3. Only list pains you can address
  4. Pains must be intense
  5. Summary

Check out more KISS Canvas Content.

KISS Canvas: 1. Customer Segments

[This is a part of a series on the KISS Canvas] Knowledge of the customer is the foundation of all great organizations. Mess that up and your organization eventually comes toppling down. If you are a startup and you goof it up you never get off the ground in the first place.

This video series explains the KISS Canvas's 1st box, and in so doing gives you a framework to quickly and effectively identify who your customers are and what critical properties they have.

https://www.youtube.com/watch?v=PgD_B4qa4TM&list=PLdfQKNp8w2QnFm9-ynAKmoVR5v1HTw8iI

Here is each sub-lesson:

  1. Introduction
  2. Users & payers are not always the same
  3. Single or multi-sided market?
  4. Customers are always people
  5. Know the decision chain
  6. Create a "sample customer"
  7. Customer segment evolve
  8. Size your market
  9. Summary

Check out more KISS Canvas Content.

Webinar: Practical Tools to Evaluate Your Marketing & Sales

I like practical, help-me-make-a-living-now tools as much as the next person :). One of my favorite such tools in the Prospecting Plan. Common Capital kindly invited me to do a webinar on this topic AND they made it free and open to the public. You can watch a recording of the webinar, and find links to the tool referenced in it, below. https://www.facebook.com/commoncapitalinc/videos/752346554974367/?hc_ref=ARQ2_euweZIvPDh99Tbxn_XFy2fqM8pEeDzaIZVYPVclvD3dDDX8w0e3Ed7jyooyiQQ

To get a your own copy of the tool I used...

  1. Go to this GoogleSheet.
  2. Go to FILE > MAKE A COPY, or if you like Excel go to FILE > DOWNLOAD AS > EXCEL.
  3. Start filling in your own data.

Hat tip to my friend Jim Mumm, who taught me how to a prospecting plan in the first place :).

Investor Pitch Template & Tips

After seeing hundreds of formal presentation decks and hearing thousands of elevator pitches, some patterns emerge. Here is my recommended formula for how to put together an 8-10 minute pitch deck & speech for investors. Full template here, summary below:

  1. Company – Describe your venture in a tweet/sentence | describe what kind of skill set you bring to a job in a tweet/sentence. Some tips on condensing your value proposition into a tweet.
  2. Credibility – Talk is cheap, SHOW us you are someone with more than just an idea / someone we should continue listening to. If you have no credibility yet (very common!), skip this section. Remember to show, don’t tell.
  3. Customer Segment(s) – Give us a quick feeling for who your target market is and that they have enough money to make your venture worthwhile. Better yet, tell use about a sample customer.
  4. Pains – What is the pain (for your target market) you are solving? How to articulate your pains. Some tips on making sure your pains & gains match.
  5. Benefits – What benefits can you deliver to the target market that alleviates their pain? Note: features are not benefits :).
  6. Competitive Advantages – How are you positioned better than the competition? Remember the positioning triangle.
  7. Channel/Promotion – How are you going to find and get your customers cost effectively?
  8. Market size – How many dollars have your problem (video tips on market section)?
  9. Rev. Model / Key financial drivers – How do you make money? Can you make enough? Don’t show a spreadsheet!  Video w/ tips on financials & exit
  10. Exit – How do investors get their money back out plus a lot of profit for them? For instance: can you show us a screen full of logos representing companies like you that have been purchased for a lot of money? video w/ tips on financials & exit
  11. Team – If possible, intersperse this content throughout the rest of presentation. If that is tricky, make a dedicated team section. Remember to show, don’t tell how your team has the skills needed to help your kind of company succeed. What skills / people are you missing?
  12. Next Steps / Ask – ALWAYS end a pitch with some kind of ask. It can be explicit or implicit, but it must always be there. A great way to do it implicitly is to show the audience what your next step is. Get more detailed help on how to make a great Ask here. If you are asking for money, remember “Don’t tell us how much money you’ll burn.”

Some other great tips:

  1. When you make your slides you want a “dead seagull” on every slide!
  2. Don’t put more than one number to a slide, it confuses people.
  3. Use relative values instead of absolute, industry-specific ones.
    1. Turn “We added 1,000 customers over the past year” into… “Our customer base has doubled in the past year”
    2. Turn “20 customers in the 1st month” into… “We acquired as many customers in our first month as our competitors had after two years.”
    3. Turn “We spend $1.24 on materials” into… “Our gross margins are 75%.”
  4. Anticipate the questions your audience will ask and have extra slides at the end of your presentation that you can pull up during Q&A if the question comes up.

Hat Tip: This content expands on the work I did while working at the awesome www.valleyventurementors.org.

How to Craft an "Ask"

Every pitch should have an "ask," a polite request that lets the audience know how they can help you next. A great “Ask” portion of a pitch should be:
  • Actionable for the mentor/audience
  • Ask for advice, not leads/money
  • Helps you towards one of your goals for the program
  • Be specific enough for a large fraction of your audience to feel like they have the knowledge to help you in a limited time frame.
Example 1:
  • BAD: “Introduce me to senior level executives of company X”
  • GOOD: “I want to understand what matters to senior level executives at companies like X”
  • WHY: One is about extraction, the better one is about learning & building a relationship.
Example 2:
  • BAD: “Purchase my discounted product today!”
  • GOOD: “Help me understand who would want my product, why, and how to reach them.”
  • WHY: Same as above!

Example 3:

  • BAD: “I need help with my business model.”
  • GOOD: “I am debating between 3 models: subscription service, a direct sale, or selling through retailers. I’d love to hear your feedback on how to make this decision, especially if you have deep experience in any of these models.”
  • WHY: The first was so generic that people don’t realize they can help, or won’t feel special in helping.  The second one lets people with the right knowledge know they can make an impact on you.  It also shows that you have done work to figure out your options and are ready for guidance vs mentors do your homework for you.

Hat Tip: This content expands on the work I did while at the amazing www.valleyventurementors.org.

KISS Canvas vs Business Model Canvas

[This is the first post in a series on the KISS Canvas] About five years ago I switched to using Alex Osterwalder's Business Model Canvas (BMC) as a go-to tool for helping startups. It was superior to anything I had tried before. However, after watching hundreds of students use the BMC (and some alternative canvases), I noticed some consistent friction points:

  • The BMC doesn't read from left to right (or right to left!), making it hard to tell a story and for newbies to get used to using it.
  • The revenue model section doesn't capture the value one gets from every customer segment. Its location makes it awkward to cover multiple customer segments' values.
  • Color coding is required to map components to different customer segments, making the canvas get a bit visually overwhelming.
  • Lots of space was allocated to components that I don't find as important as others for concept through seed-stage companies.

So, I took a stab at creating a new canvas, one that reflects the way I like to teach and focusing on the elements I have found are the most important for a startup to master. I call it the Keep It Super Simple (KISS) Canvas. It looks like this...

KISS Canvas-Easy2Read Here is a 2-minute video walking you through it.

The main advantages of the KISS canvas for me...

  • It tells a story in the way entrepreneurs should pitch, with the most important elements first. Start with the customer because the understanding of the customer is the foundation of your business. Then explain your value prop, move on to how you'll Get/Keep/&Grow those customer relationships, and finally cover the financials.
  • The last column lets you explicitly list what value you derive from each customer segment. Sometimes it is money, but many times it is something else, and one needs to know and focus on that!
  • No color coding required. In the upper two thirds, simply add a row for each customer segment like so...Screenshot 2018-01-22 at 7.02.37 PM - Display 1

I welcome your input on the design. You can download several versions here:

Check out more KISS Canvas Content.

Accepting Applications for Nonprofit Accelerator

I am happy to announce that Lean Innovation Institute (full disclosure: I am the founder :)) is launching a pilot accelerator for mature nonprofits in March. The Nonprofit Accelerator trains leaders of mature nonprofits to discover, assess, and deploy internal innovations that create new sources of unrestricted revenue while furthering their mission.

There are currently only two slots left in this cohort. If you know of a nonprofit with forward-thinking leadership seeking to increase their financial independence, further their mission, and retain their best talent, then please direct them here.

Announcing The Lean Innovation Institute

Many of you know that after retiring from VVM I, being a glutton for punishment, launched not one startup, but two that I run concurrently. I described one of them, Launch413, back in November. Today I am happy to formerly announce the other: The Lean Innovation Institute (LI2). LI2 trains mature organizations to find, vet, and develop new revenue-generating opportunities that allow them to diversify their income and increase their competitive advantage.

LI2 is the spiritual child of a program I built & led for VVM, the 2016 Manufacturing Accelerator. There I learned that the same methodology that worked for startups worked for mature organizations seeking to innovate. For instance: top alumni secured $500,000 contracts within 6 months of graduating that they attributed to the training! That translates to real jobs and income gains for our region.

LI2 offers that same training to other mature organizations. Here is an excerpt from our website...

THE PROBLEM

Leading a small business in today's ever-more-globally competitive world isn't easy...

  • Every year buyers demand higher quality, quicker delivery, and lower costs.
  • If you don't cut your margins, work longer hours, and ask even more of your employees, then your customers will go to someone else.
  • You'd like to get out of this someday, retire, be debt free! But if the potential buyers keep talking to you like you are "just another [X] business" they'll never offer what you deserve.

HIDDEN GEMS

You probably do all kinds of work right now. It all pays, but some of it doesn't pay enough... but some of it you do damn well. If you could be paid to focus on just that work, you would...

  • Increase margins - If you are one of a handful of companies that can do the very specific work the customer needs, then you'll face far less competition and find customers willing to pay a premium.
  • Lower cost of sales - Once you've found the right work to focus on, you can concentrate all of your energy and effort on a small number of marketing & sales techniques that work. Furthermore, once you are known as the best at your work, much more free word-of-mouth business will come your way.

You're already working 60+ hours a week. So how can you discover this area of specialization quickly enough?

OUR SOLUTION

The Lean Innovation Institute (LI2) trains small business to, among other things, quickly and cheaply discover where they can specialize to make their business more profitable.

Learn more.

 

Elevator Pitch Template & Tips

If you have 1-3 minutes to communicate your idea, here are tips using a format hundreds of startups have field-tested with thousands of mentors. Develop your pitch slides & with a minimum font size of 30 points. Use as many slides as you like and we recommend you use lots of images instead of lots of text. Follow the template summarized below:

  1. Company – Describe your venture in a sentence. Some tips on condensing your value proposition.
  2. Credibility – Talk is cheap, show us you are someone with more than just an idea / someone we should continue listening to. If you have no credibility yet (very common!), skip this section. Remember to show, don’t tell.
  3. Customer Segment(s) – Give us a quick feeling for who your target market is and that they have enough money to make your venture worthwhile. Better yet, tell us about a sample customer.
  4. Pains – What is the pain (for your target market) you are solving? How to articulate your painsSome tips on making sure your pains & gains match.
  5. Benefits – What benefits can you deliver to the target market that alleviates their pain?  Note: features are not benefits :).
  6. Competitive Advantages – How are you positioned better than the competition? Remember the positioning triangle.
  7. Next Steps / Ask – ALWAYS end a pitch with some kind of ask. It can be explicit or implicit, but it must always be there. A great way to do it implicitly is to show the audience what your next step is. Note: never ask people to buy your product or invest in your company. It can be illegal and never classy. If people love you, they’ll ask to buy/invest without you asking :). Get more detailed help on how to make a great Ask here.

Hat Tip: This content expands on the work of the great people at www.valleyventurementors.org.

Introduction Etiquette

When you get introduced to a mentor / someone who can help you, here are a few simple rules to make sure you are Awesome. Awesome people do better and get more referrals :).
Must Do:
  1. Provide value in every interaction – ask “how can I help you?” This involves 5 minutes of research into the contact so that you can ask intelligent questions / provide contacts. Odds are they won’t ask you to help, but that you care says a lot!
  2. Connect via LinkedIn, and if relevant, ask for connections. Smart people use this and get phenomenal results!
  3. Follow up with at least a thank you email to both the person who helped you and the person who referred you. Add one sentence of what you got out of the interaction and it will increase the warmth and fuzz 5x!
  4. Bcc Referrers. When you get introduced to someone, make sure to put the referrer on the BCC line so they don’t get all the replies. When you do so start your email with something like “[ReferrerName], thank you so much for the intro! I’ve moved you to BCC to spare your inbox.  [MentorName], it is great to make your acquaintance…”

Should Do:

  1. Promote every connection – Send out a shout of thanks on twitter and retweet a message of theirs that is meaningful (where possible).  This can be done on any of the social media platforms.
  2. Use a CRM (Customer Relationship Management) system, a lot are free – do not let valuable connections fall through the cracks!
  3. Ask to put contacts on a quarterly newsletter – (see crm above).  People who help you generally would like to know that something came of it, and this is an automated way of maintaining your network.  This is not the same as marketing emails!

The content of this post originally appeared on the Valley Venture Mentors blog and was inspired by advice from the awesome VVM Mentorship and Accelerator alum Damon Magnuski, co-founder of www.peoplehedge.com

VVM's Next Chapter

In 2011 Scott Foster, Steve Willis, and I co-founded Valley Venture Mentors (VVM) as a nights&weekends hobby. A few years later it transitioned from a hobby to a real organization with a staff and ambition to change the face of the Western New England economy. It was a crazy ambition. And crazy ambition requires crazy ideas :). Our unique approach to mentoring, selecting startups, and our family and sanity-friendly programming allowed us to attract great minds that so many entrepreneurship programs miss.

VVM helped hundreds of entrepreneurs follow their dreams. From cookie truck franchises to software changing how social work is done, to bacteria that can crawl into and kill tumor cells, and so so much more. These crazy, beautiful, passionate entrepreneurs muster all their courage to do what most of us are far too sane to try! Their products are touching the lives of people the world over, winning national awards, gaining national press... Along the way they have increased startup activity in this area by at least 10x. 10x more revenue from startups. 10x more investment into startups. 10x more jobs... they are approaching a thousand jobs!

A year ago I asked the amazing Liz Roberts to take over as VVM's leader. She professionalized and systematized the ragged startup Steve, Scott, and I put together in 2011 and shepherded Team VVM to heights I could never have dared hope we would achieve. Specifically: world-class leaders of the entrepreneurial community and the Obama White House have recognized VVM's results as extraordinary.

It has been the greatest joy of my professional life to work alongside Team VVM and the thousands of volunteer mentors that make up our community. Today is my last day as a full-time employee at VVM. I will remain an active and proud member of the community, but it is time to go. My startup baby has grown up.

Leaving is bittersweet, but it is beautiful. I could not ask for a more amazing staff and board to lead VVM to its next chapter.

I look forward to seeing y'all at a Mentorship Night, and to see where VVM goes next.

-Paul