Startup: The Complete Handbook for Launching a Company for Less

I happened to come across a review of this book while surfing the web and thought it deserved some consideration as a possible replacement to the course textbook for ETR500 entrepreneurship and innovation. The book is called Startup: The Complete Handbook for Launching a Company for Less, and is written by Elizabeth Edwards. Edwards is an entrepreneur herself having started her own company. She has also funded several startups as a venture capital investor, and sits on the advisory boards for several other startups. The book is based on her personal experiences in all these different areas and can be used by technology startups, as well as, people just looking to open a local coffee shop.

How Word-of-Mouth Can Drive Revenue for Your Business

Here's another interesting article I came across that talks about how word-of-mouth can drive revenue for your business. The article talks about how many people now use user generated content such as , reviews, blogs, and other things to find out what products to buy. 51% of people now buy products based on user generated content. The article also lists several things that a company can do to step into the brand talk surrounding their company or product. 

What brands can do to step into brand talk: 

• Be where your target audience is around 
• Listen to the conversation 
• Respond to the conversation 
• Publish and share buyer persona relevant and remarkable content on the web and in social media 
• Ask for opinion about your products and your business 
• Ask for any suggestions for product and services improvement 
• Be authentic, be honest and be helpful 
• Keep the conversation on run

The article goes on to say that in 2017 the Millennial generation will have more buying power than any other generation. There are also some interesting charts towards the end if the article that show the difference between Millenials and Baby Boomers in terms of what they will and wont buy without first checking user generated content. Not surprisingly Baby Boomers are still very reluctant to base decisions off of user generated content while Millennials tend to rely on it more when making decisions.

Why Apple is Beating Google

I found this article while surfing the Internet the other day and thought it was interesting. The author, Henry Blodget, claims that while Google's products are all built around a strong technology foundation, they are geared more towards "geeky technologist". Apple, on the other hand, design its products for "normal humans". Blodget explains that because these nerds are a smaller, weird niche market Google is struggling to gain the mass market appeal that Apple has enjoyed for several years now. Blodget linked these differences to the organizational strategies that are in place at Google and at Apple. "Google has an engineering culture, in which brilliant technologists are the rock stars."  Apple on the other hand, "has a product-design and marketing culture, in which "technology" merely serves to support a product's function and form."  Looking deeper into this Blodget notes that Google was founded by people who posted stellar GPAs at some of the country's top universities, while Apple was founded by a college dropout, Steve Jobs, who attributed his amazing product designs to LSD and calligraphy. According to Blodget, Jobs, a genius in his own right, would never have been hired at Google because their hiring algorithm would have red-flagged his educational background and dismissed him as a legitimate candidate. Unfortunately, Google really needs someone with Steve's type of genius in order to bring their products to the masses, but in order to do so they will need to change their hiring algorithm, as well as, the colleges that they typically recruit from. The charts below show where Google goes for its talent and where Apple goes to hire its employees.

Google

Apple

Market Opportunities

Estimating the size of a particular market depends on four different cuts of market data: demand, addressable market, realistic opportunities vs. competition, and targeted selection of "winnable market opportunities.  In the following post I will discuss the approach that Closing Bell has used thus far in estimating our market size.

Demand:

"In economics, demand is the desire to own anything, the ability to pay for it, and the willingness to pay. The term demand signifies the ability or the willingness to buy a particular commodity at a given point of time (Wikipedia, Demand)."  One of the key benefits to running a bar like Closing Bell is that there is always a demand for alcohol.  In fact, our research has shown that despite the recent recession people are still indulging themselves with alcoholic beverages at a record pace.  Boston in particular represents some of the highest alcohol consumption rates in the entire country, which makes this location for Closing Bell that much more attractive.

Addressable Market:

"Total addressable market (TAM) is a term that is typically used to reference the revenue opportunity available for a product or service. TAMs help to prioritize business opportunities by serving as a quick metric of the underlying potential of a given opportunity (Wikipedia, Total Addressable Market)."  Presently there are approximately 4.5 million people living within the Greater Boston area.  Of these 4.5 million people approximately 3 million are of legal drinking age.  These 3 million people represent the total addressable market for Closing Bell, or the number of people we could expect to see if there were no competition (i.e. other bars, liquors stores, etc.).

Realistic Opportunities vs. Competition:


While there are 3 million people of legal drinking age in the Greater Boston area there are approximately 1 million males age 24 to 34.  Of the 1 million males age 24 to 34 in the Greater Boston area it is difficult to forecast the exact number that will choose to go to Closing Bell rather than one of the other approximately 180 bars in the area.  Our hope is that people will choose our bar because of the unique pricing system we have implemented, as well as, the atmosphere that fully immerses the customer in the Stock Market experience.  Because of this difficulty in forecasting we took a somewhat different approach in estimating our market. We went more with an average customer per day assumption (assuming on Friday and Saturday we would be closer to max capacity (including turnover) so more like 250 customers, where as on Monday / Tuesday, we might have an average of 50 customers.  We then added a factor in, saying in year 1, we will probably only get 25% of max sales, Yr 2 increasing to 35%... and so on.

Targeted Selection of "Winnable" Market Opportunities:

Closing Bell is currently targeting the 1 million males age 24 to 34 in the Greater Boston area.  However, rather than go after this group as a whole we are specifically seeking those people making over $50,000/yr as this group represents the highest percentage of drinkers.

Tiny $35 Raspberry Pi computer causes big stir on launch day

A fully functioning computer for just $35!  Apparently it's as simple as Raspberry Pi.  Eben Upton came up with the idea in 2006 as he watched the number of applicants to Computer Science programs that possessed actual programming experience declining at an alarming rate.  In the 1990s Upton saw many applicants that were experienced hobbyist programers, but by the 2000s kids were applying that had little more programming experience than simple web design.  Upton deduced that the reason for this radical shift was because current computers and gaming consoles were so expensive that parents had forbidden their children from tampering with them.  While this is a completely logical reaction on the part of the parents it was not providing children with an opportunity to learn basic programming.

By 2008 Upton and his team were able to take advantage of processors that were being developed for mobile applications, but at the same time would suit the needs of his simple computer.  Now, nearly three years later the project is at the end of its first run of developement, and project is garnering incredible interest from across multiple markets. "Developing countries are interested in the Raspberry Pi as productivity devices in areas that simply can’t afford the power and hardware needed to run a traditional desktop PC; hospitals and museums have contacted us to find out about using the Raspberry Pi to drive display devices. Parents of severely disabled kids have talked to us about monitoring and accessibility applications; and there seem to be a million and one people out there with hot soldering irons who want to make a robot."

This message comes directly from the company's website, www.raspberrypi.org. "We don’t claim to have all the answers. We don’t think that the Raspberry Pi is a fix to all of the world’s computing issues; we do believe that we can be a catalyst. We want to see cheap, accessible, programmable computers everywhere; we actively encourage other companies to clone what we’re doing. We want to break the paradigm where without spending hundreds of pounds on a PC, families can’t use the internet. We want owning a truly personal computer to be normal for children. We think that 2012 is going to be a very exciting year."

And in fact they were right.  The response to the Raspberry Pi personal computing system was so overwhelming that when it was launched in early March 2012 distributer's websites crashed almost instantly and the product sold out within hours.

Coming across as nothing more than a credit card-sized circuit board, "the powerful, fully-programmable PC can plug into any TV and can power 3D graphics and Blu-ray video playback."

(Click to Enlarge)

In an interview with CNN, Upton informed them that he is currently working on a version of the computer that will retail for only $25 and will being starting production within the next several weeks.  Upton's hope is that this device will spur the creative minds of young people and result in an additional 1,000 engineers in the UK each year.  He views the Raspberry Pi as a potential "industry-changing development."  In Upton's mind, "anyone who expresses a desire to get into designing software should have a platform to do it."

Like any good entrepreneur Upton saw a problem, identified an opportunity, and set out to create a solution that now appears to be on its way to becoming a successful business.

Whole Foods experimenting with Kinect-powered shopping carts

I found this article on one of the technology blogs that I frequently view in order to keep up with the constantly revolving cycle of gadgets that are being developed.  It's always fascinating to see what people will develop.  In this case, Whole Foods, yes that earthy-crunchy food market, has developed a shopping cart that is capable of following the customer around the store, checking items off their list, and even directly billing their account when they're done shopping.  This particular article is thin on details, but the video showing the cart in action is pretty intriguing.

As shown in the video the cart is even capable of advising the customer about the contents of certain products in regards to allergies.  In the demonstration the customer has entered into his list that he is looking for gluten free spagetti.  When the item is scanned by the cart it reacts to the purchase by notifying the customer that this particular brand of spagetti contains gluten.  It then tells the customer where in the store he/she can locate the gluten free version.  A more detailed article about the cart can be found through Popular Science.  The main driver behind this innovation is the Kinect, which was developed by Microsoft as an add-on to their popular gaming console the XBox 360.

Microsoft developed the Kinect in response to Nintendo's Wii gaming console that allowed uses to control their gaming experience by waving their arms while holding a controller.  However, Microsoft took this concept to the next level with the Kinect, which is capable of monitoring the full motion of the user's body.  Since it burst onto the scene in November 2010 the Kinect has spawned many new innovations such as the shopping cart shown above. Engineers have strapped the device to everything from vacuum cleaners to lounge chairs in an effort to provide them with the ability to sense and react to their surroundings.  Popular Science Magazine featured an article about the Kinect in November 2011, which explored everything that people have used the popular device for since its inception one year earlier.  Included as part of the article was the chart pictured below, which illustrates everything that engineers have used the Kinect for.

(Click to enlarge)

In creating a next generation gaming device Microsoft inadvertently created a device that can also be easily hacked, and adapted to slew of other applications.  Could this be the first wave of robot devices that will make our lives easier?  Only time will tell.

Nottingham Spirk Strategic Innovation

I buried the link to this company in one of my previous blog post, but thought it was worth featuring on its own.  The company is called Nottingham Spirk Strategic Innovation, and they are developing game-changing products for many different markets.  The company was founded by John Nottingham and John Spirk after the two met in Industrial Design Department of the Cleveland Institute of Art.  Upon graduation both received lucrative offers from Fortune 500 companies, but chose to go a different direction and start their own company instead.

They currently do work for multiple clients in the medical, consumer, packaging, retail, business-to-business, and services industries.  Clients include Dirt Devil, AXE, and Swiffer.  Innovations include the Spinbrush, twist-and-pour paint container, and the M&M's Personalized Printer which allows consumers to print custom images on M&M's.

One of the more interesting features of Nottingham Spirk is there location. Housed within the First Church of Christ Scientist that was originally built in 1931, Nottingham Spirk renovated the space to create the Nottingham Spirk Innovation Center (pictures below).  The company is located in Cleveland, OH.

I thought it would be interesting to create this post in light of the previous post, which dealt with large corporation's inability to foster entrepreneurial environments.  Nottingham Spirk, on the other hand, thrives on innovation.