In continuation of yesterday’s post on my experiences with the top 5 habits of successful young entrepreneurs…
3. Getting involved with business plan competitions, business incubators, and networking groups
I never got involved with a business plan competition or business incubators but networking really was critical to our success. We did not get too many responses by just going to a networking event as attendees. We did the morning breakfast meetings, the business card exchange sessions, and the evening seminars – all the in the hope of finding the right people – investors, partners, employees, customers – who could help us. Where we actually got the most bang for our time was from targeted networking and delivering our own seminars.
Targeted networking – we approached the Business Development Bank of Canada, a federal government initiative, looking for help. They put us on to a consultant who connected us to another consultant. The final consultant ended up playing a significant role in guiding us towards success. We only got to him by knowing what we were looking for and asking the people around us. If you don’t have a sense of who you need chances are you won’t find the right people.
Delivering our own seminars – we made a partnership with Chapters / Indigo which is the Barnes & Noble equivalent in Canada. We delivered free seminars for people on entrepreneurship. There was never a business model behind it – the goal was to give back to the community and help other aspiring business owners. We ended up meeting a number of people who would become partners and employees in new businesses that we launched. It is always much better to be a guest speaker at an event than to be an attendee. After your presentation opportunities open up as people come to you with ideas on how you can work together.
4. Selling web-based software subscriptions to reduce the upfront cost to clients
We had two companies that sold web-based software. One of the things we found was that big companies were more willing to spend on something that can be put on the desktop than just a web subscription. This led us to make a thin desktop product with its own browser that connected to the Internet. We also found that customers were not willing to put their private information into a website vs. a desktop product. These perceptions are changing though as more companies move to the web. Finally, while it was great to have a monthly subscription at $50 / month, when you’re starting up a business you need cash flow so we offered pricing options and tried to push the $500 / year option.
5. Using word of mouth and viral marketing over traditional advertising
As a small business, it’s hard to afford traditional advertising campaigns. We tried to encourage our customers to tell their colleagues and recommend our company. What also worked well for us was getting media exposure. If you can convince a newspaper to run a story about you, they do a lot of the work of convincing your target market to buy from you. You get the extra exposure and it looks great to highlight on your home page. The only advertising dollars we spent were on pay per click marketing with Google AdWords. We were selling $500 to $1,000 software so it paid off to spend $0.30 / click to get a targeted lead. The beauty of the system is that you can measure the results and if it doesn’t pay off you can stop immediately.
What has your experience been with networking groups, web-based software, and viral / word of mouth marketing?