Business Plans: Outside Networking Commitment

I had the opportunity to spend a Saturday at the Spark e-ship conference hosted at HBS on November 15th. The conference was an all day event focused on lectures from leading start up founders, venture capitalists, and workshops focused on innovation exercises. The conference was primarily attended by business school students from HBS and surrounding Boston schools as well as some law school and graduate students. Most attendees were focused on creating their own venture or working for an early stage start up.

The first event I attended was a presentation from successful founders on their start up experience. Speakers gave tips on moving from an idea to a business. Experiences generating early stage revenue, pitching for seed funding and Series A rounds were discussed. The importance of maintaining a positive attitude, not giving up, and surrounding yourself with like minded individuals were emphasized.

The second series I attended was on how to prototype an idea. For this session the presenters discussed the process of prototyping. We were divided into teams of 6 and given materials to use in prototyping a product of our choice. We were given 10 minutes to develop and pro type our idea. Groups then went around the room and presented on their prototype. My team  developed a time traveling app that allowed the user to experience time travel as a hologram through an app. This was probably one of the most valuable experiences of the session as it helped me to really understand how to take the idea I have been working on and prototype and create a story board of the application. Working on this skill also gave me some good opening to network with other students who were attending the conference.

The remaining seminars I attended included Selling &Exit strategies which was helpful for me in understanding how to create a product that could have a potential profitable exit strategy. Start ups beyond tech was the last seminar and included an interesting presentation on a combing neurological tests in creating online job candidate profiles. An individual looking to be recruited by top companies would set up a profile online and take these tests that could tell an employer what types of positions you were best suited for. This is not based in IQ but more about what environments and tasks are you best suited for. Companies would purchase memberships to have access to this data and could recruit based on a particular profile. This presentation inspired me to look deeper into incorporating more principals of habit building technologies into the app I am developing.

The last event I attended was volunteering at the New England Venture summit. During my time as a volunteer I was able to watch technology and life science founders pitch their companies to VC  companies. I also had the opportunity to listed to VC panel discussions on what they looked for in companies they were investing in. There were also tips how the protocol of being introduced to investors, how much time a typical VC firm is willing to listed to your pitch, and what industries and areas are seeing the biggest investment. I also got some insight into the potential market of creating a sales app for emerging companies to use in preparing their VC pitch.

Habit forming App's

After being introduced to skillshare (http://www.skillshare.com) during one of Professor Nelson's lectures I decided to visit the site to see if any of the posted resources would be helpful in building out my app business. I have found a number of online resources that have helped me through out the process of creating my business plan and skill share has proven to be a site I will continue to utilize during my entrepreneurial process. I came upon a 2 hour course, broken down over 7 sessions, titled "How to Build Habit Forming Products' by Nir Eyal. Nir is a silicone valley entrepreneur who has sold two start ups, Sunshine Valley Business Development and AdNectar. Nir's talents are focused on researching the crossroad where technology and psychology meet. His presentation on skillshare is based off of his book of the same name "Building Habit Forming Technologies". 

Nir's presentation is built off of the premise that in order to build a successful tech product you need to create a product that addresses a burring need. This is the painkiller (burning need) vs. vitamin (may help but we don't know) analogy that is introduced early in the presentation. Nir then defines a habit as "when not doing something causes pain". Nir encourages the user to consider this information in building a technology product and ask ourselves "how can we create a product where habits can be used for good". I found this concept to be particularly intriguing as much of the motivation I have for building a suite of apps is to help users who are contract workers or small business owners to have the same level of resources and knowledge available to them that larger business's have in an easy to use platform that does not require expensive, specialized training. (think of Quickbooks for example expensive investment in software that then requires additional training)  One challenge I am facing in my business plan is identifying how I can attract a steady stream of users to purchase my apps and have these same users return to buy additional apps that are available to purchase. In order for my proposed sales model to be successful I need to have returning users purchase additional products as well as have users become evangelists for my product by recommending my products in their respective communities. 

In order to develop a habit Nir identifies two important actions that must be present; frequency and attitude change. Nir's theory is that in order to be a very successful tech product user's need to engage with your product more than 1x per week. If your product requires less then at least weekly interaction from the user it will be nearly impossible to create the a "habit" level of engagement. Creating habits for your customers creates a higher lifetime value for your product (ie. essential for favorable VC valuation), enables the owner to change the pricing models if necessary; both features which are important to the growth process of the company. The second piece, attitude change, is all about being able to have your customer base be amenable to seeing things differently. An exercise is introduced to reinforce these concepts and asks the company to describe their business model and the habits formed around the business model and then articulate why the business model requires these habits. You are then guided to take ten minutes to ask yourself what problem you will solve and how the problem is currently solved.  Having completed this task early in my research and development phase I moved ahead to the next concept and the core concept of the course, creating the Hook. 

The Hook is essentially a continuos four step process of Trigger, Action, Reward and Investment. In order to build a product that becomes a habit for the consumer it needs to possess all four phases of the hook process. In finalizing my product description for my business plan I am going to incorporate this process into the product description section and in each app design. Understanding this process has also helped to give me direction on what supporting features I need to develop to support my app. Creating a robust website where users can connect, share their experience and read content devoted to topics that impact small business's and commentary that breaks down how issues/laws/regulations impact the small business owner. This article also inspired me to think about how to incorporate user badges and recognition for users who contribute and create incentives for them to deepen their engagement with the product set and the brand. During the competitor research phase of my business plan I did not find that app developers supported their product by building community forums, had strong website support, or offered incentives/rewards for deepening customer brand engagement. 

The last important concept that I will leave you with is the idea that technology products have the ability to appreciate in a way that is different from typical consumer goods based on how the user engages with the product. If you incorporate into your business model a habit forming product that allows the user to store content and data in the product it's value will continue to increase. When we enable users to invest in the product by contributing their time and data to the product it changes their perception of the product. It also increases the likelihood that the user will return to the product and allowing the Hook cycle to take place again. 

There was a significant amount of content in the "Building Habit Forming Products" and I recommend that anyone developing a product take time to learn about this concept and understand how they can incorporate these principals into their business model. As I continue to work these concepts into my product I will continue to update this blog. 

Launching my App product

App research and buying experience overview
I have spent a significant amount of time reviewing apps that offered services under the business section of the app store. Many of the apps competing in this space are designed by solo designers or small companies. Some apps can be purchased on their company website in addition to the app store. Most sites provide little detail on the company or what their apps actually do. This can be a challenge when making a buying decision. One of the few ways to asses the potential performance of the product is through user ratings. Because there are many apps available for purchase there tends to only be a few that are reviewed and for those that are reviewed there is typically 3 or less user ratings. This made it challenging for me to determine which apps were worth purchasing and test driving for my product research.

Competitor Research 
One app that I though was interesting was an app titled "Benchmarking". This was $2.99 app that helps the user understand the technique of benchmarking and guided them through the process of benchmarking a product or service. This app is similar to the concept that I am working on. Essentially, take important business concepts and break them down so that someone with a limited background in a the particular topic can quickly gain an understanding of the concept and learn how to implement into their business. This company has about 40 apps that can be purchased to address common business issues. Check out their website at http://www.kalees.in to view this example. While the website is fairly simple it is one of the better examples from app development companies that I have seen.

Pricing
Based on my research I have decided to price my applications between .99 and $9.99 per app. Apps can range from free or free to over $100 for more established brands. By offering lower price points initially for the consumer I can build up brand equity with the user and introduce higher price point products in the future if it makes sense for my product line.

Building Brand Awareness
Operating under a start up budget my intention is to spend most of my marketing dollars on creating and maintaing my website and on SEO keywords and paid search. I will also create awareness by positing to forums where my applications can be useful to users in tackling business problems and directing them to my website or the app store.
Creating a website that is interactive for the user and helps them to create a connection between them and the app is a major component of my marketing strategy. A simple way to differentiate myself from competing applications (aside from creating a superior product) is by giving them the ability to test drive a piece of the product prior to downloading or showcasing a new app in development. I will use the skills that I have developed in my blog class to blog and talk about the development of new products and give users the ability to have input on the process and make suggestions. I will also create a separate forum where users have a community space to share what how the app has helped them to be successful and as the product line grows how using a combination of apps has helped their business to be successful.

Design
The apple app store provides very specific guidelines for creating an app and having it approved for sale via the app channel. Top issues for rejection include a lack of information provided, bugs, or a user interface that does not meet apples standards. My major challenge has been in downloading and using some of the resources out there to build an app product. I am working on scheduling a time to speak with an app developer this week to understand what the market pricing is for contracting the development out, or, if they can suggest a more user friendly product that I can use to begin to build my initial product. During my research I have read feedback from some app developers who have used paper and a pencil to sketch their ideas and then contracted an app programer to build. An important decision I will need to make in the near future will be deterring which direction I will take in developing my app. I am still looking for courses online to assist me with this.

Free is not for me

During our class with our Angel in Residence Barbara Clarke we discussed different types of revenue generation models. For my application I was initially inclined to make the product/service available for free to the consumer and rely on advertising as a way to generate income from the product. Barbara discussed how this model no longer was viewed as a lucrative option by firms and that ad revenue has continued to decrease for many firms who have used this as a revenue generation model. Another popular revenue model, but one that I believe has many flaws and is beginning to lose value is the membership model. Revenue is not as easily predictable because in order to encourage users to sign up you now need to make it fairly simple to allow people to cancel their subscription. The third option for evaluating is the pay per use model. 

Ben Milne of Dwalla spoke about his start up on Kahn Academy which is focused on reducing the costs of transferring funds between people using a pay per use model.  The scope of the money transfers market exceeds 30 Trillion per year. By charging customers per use instead of a percentage fee of the transaction Ben is betting that Dwala can win significant business. At .25 per transfer and free for dollar amounts less than $10.00 Dwolla is sure to put a dent in banks and merchant processors revenue forecasts.   Check out their website at https://www.dwolla.com. 

Using the pay per use revenue model combined with a now-ist philosophy constant innovation by way of existing product improvements, add ons, and complements will be central in developing my applications and products. Zach Kaplan of Inventables (https://www.inventables.com) spoke about how he first learned as an entrepreneur that it was important to understand how to sell things to people and the concept of being able to sell anything if you understand who your target market is and how to sell to them. Zach also discusses how the AI age has removed the barriers to entry in getting a product/service to market. His approach is to try it, test it, and if it does not work do something new. "Learning about something unexpected helps you to think of new concepts that may be possible." Intuit takes a similar approach in asking themselves "how are we the best in the world at problems to solve". This requires Intuit to constantly identify the major problems to solve and continue to innovate. This methodology will be part of my revenue model as I look at constantly evolving applications to meet market changes or new consumer needs. Profitability will be contingent on creating applications that will have a broad enough demand in the marketplace that will also increase demand for compliments to the application. 

Becoming a "Now-ist"

The first step in my field work was to investigate the world of innovation and educate myself on the practice used by the top innovators today. Below is a sampling of the lectures and modules I have viewed through resources such as Ted.com and Kahn academy. Viewing these speakers online has given me the unique opportunity or replaying and researching topics as they are discussed. This practice has been helpful for me in developing the initial stages of my process and I encourage you to view the selected talks I have outlined below.

Joi Ito's Ted talk "Want to innovate: become a now-ist" compares innovation pre internet of BI (before internet) and AI (after internet). In the BI stage, innovation was about thinking into the future and developing your innovation around a business model that was then "deployed by VC firms armed with an MBA education". The internet drove down the cost of trying a new idea or concept and made the world more complex and unpredictable. In order to survive in a AI world, Ito argues that innovation has become a "bottom up process; we need to learn how to be open and alert to what is going on around us", to be present. We have moved from a software or service model to a design & innovate model. Successful entrepreneurs will "learn to build quickly, improve constantly and with out waiting to for proof or permission that you have the right idea". Ito also pushes the concept that we need to move away from relying on large corporations for innovation as their bureaucracy and process's are geared towards looking into the future instead of responding to market conditions today. Scott Cook founder of Intuit touched upon this in his Kahn Academy module. Cook has created teams within Intuit who are tasked with innovating products and services and to innovate and publish for consumer feedback in as little as 3 days from start to finish. This enables Intuit to respond to market changes as if they were a small firm by eliminating the typical corporate road blocks that cause big firms to miss out on innovation.

When you search the word "entrepreneur" on Ted.com Maya Pen's talk returns as the top result. Maya is a 13 year old entrepreneur who was featured in Fortune Magazine for starting an online business at the age of 10. Maya's ideas for business's were based on materials she found at home that she was able to craft into items and sold online. Maya's mantra is that we are all able to create change and that creating change can help us to solve a problem or discover a new market. Successful entrepreneurs need to train themselves to not only embrace change but to train themselves on the concept of constant innovation as a discipline. Maya has learned to follow her interests and innovate in each of her new spaces. This has enabled Maya to create a cartoon focused on educating people on the important role bee's play in our ecosystem. Check Maya out at "http://mayasideas.com/pages/about-us" to learn for yourself how inspiring a "now-ist" like Maya can be. 

The third result when searching with the keyword "entrepreneur" on Ted.com returned " Eric Giler: A demo of wireless electricity". I have worked with Eric as a client and have heard him give this talk before so I thought it was a good opportunity to incorporate his talk into this blog piece. The idea of wireless electricity was after the 3rd night of Dr. Marin Soljacic listening to his wife's cell phone beep that it was losing power. Dr. Soljacic found it ironic that his wife's phone was losing power only a few feet from a wall where electricity was running though. In this case his job to be done was to enable electricity to travel to the device without wires in order to charge his wife's cell phone battery. Check out Eric's engaging presentation at
http://www.ted.com/talks/eric_giler_demos_wireless_electricity. WiTricity is another example of innovating in the now. Taking a bottoms up approach to innovation, Dr. Soljacic had to be open and alert to his surroundings in order to identify the JTBD. He then applied the concept of "demo or die" by testing his hypothesis by trying to light a light bulb with a team of colleagues at MIT. The success of his innovation confirmed that he should focus on moving his idea forward.

My research on innovation and e-ship has confirmed my theory that in order to build and innovate my product set I need to test and publish applications for small business's to use to effectively enable them to operate their business. In my prior experience of running a successful business the products and services that I offered grew from what my customers demanded coupled with me being willing to meet that need for an agreed upon dollar value. Some services flourished and others missed their mark, I learned to continue to move forward in the process. My biggest set back in not being able to continue to move the business forward and into an even more profitable direction was my lack of confidence in myself, an emerging fear of failure and not having the community of practice that the e-ship program at SOM can provide me. The next step in my innovation process will be to build an application over a 3 day period that I can submit to be published through an application store. From that point I will receive feedback that will enable to move the process forward in one of two ways; innovate based on feedback to publish or have application published and innovate on user feedback and trends. Although I lack the expertise in programing an application Zoho (www.zoho.com) will enable me to launch and innovate my customer application.

Leave it on the Barre

The last class I sampled in my research was a Pure Barre class in Newton Ctr. Pure Barre is a form of exercise based on concepts from ballet training and Pilates. Pure Barre boasts creating the fastest most effective method for changing your body. The workout focuses on toning your "seat" (grownup word for Bum) hips, thighs, abs an arms. The Pure Barre franchise has 200 locations in the US and is the fastest growing ballet inspired workout franchise. Locations in the Boston area include affluent suburbs such as Newton, Wellesley, Hingham and Lynnfield. Locations are owned via a franchise agreement with some franchisee's owning multiple locations. Like Soul cycle there is a portion of the studio that is dedicated to retail; primarily apparel. Pure Barre, like Zumba, also has a robust online retail presence that sells apparel, DVD's and equipment. Pure Barre sets itself apart in the retail section by offering podcasts enabling seasoned puree bar students to practice this method anywhere in the world only needing the assistance of their pure barre workout towel. 

Classes can be scheduled online through the official pure barre website or via phone at your local studio. I called to schedule my first appointment and felt welcomed in starting my new experience. The introduction to the class was swift and painless. An instructor demonstrated to me that it would be important that I learn the "tuck" movement for class and showed me to an open carpeted area with mirrors and a barre lining the wall, much like a ballet studio of my childhood. Equipment needed for the class was minimal and included a small rubber ball, three point weights and a rubber band for stretching. Once class began the instructor was featured at the center of the room calling out positions and demonstrating movements. Each routine was broken drown by area worked and included a stretch after each section. Upbeat songs played throughout the session in the background. Inspirational messages were displayed throughout the retail areas of the studio however the instructors did not provide the affirmations that are peppered throughout the soul cycle routine. The workouts are hard! Not in an intense cardio way but in an intense isometric exercise kind of way. I really enjoyed the class and the instructor was very helpful in confirming that I was positioning myself correctly. This is definitely a class where you can not let your mind wander; I had to focus on remaining present and listening to the instructor in order to ensure my form was correct and that I was following along on the positions. 

At the end of the class I learned I was eligible to purchase one month of unlimited classes for $100 and that my class fee of $23 would be credited to the amount. The only additional item I needed to purchase were special grip socks that cost about $12. I enjoyed the class and bought into their body changing concept  ("30 classes to a transformed Body"). My goal is to attend 30 classes in the 30 day timeframe and document the transformation. Many exercise programs today guarantee that you will experience a significant level of change within a short time frame and I want to understand how this process works. A constant theme throughout all three of the programs I have evaluated (spinning, Zumba and Pure Barre) is that they are all selling change. All promise a change in you physically and some talk about the mental aspects of change; Soul Cycle seems to do the best job with talking about and executing on a change in mentality. I will update this particular blog after my 30 day challenge; stay tuned for further findings! 

Joining the Crew.....

For my next adventure in research on crafting my innovative idea I decided to take a lesson at Community Rowing in Brighton. Rowing was a sport I aspired to learn as a child. Living in an area surrounded by Head of the Charles, a neighborhood teeming with former Ivy league rowers, and a view of the training team for a local university gave me the opportunity to appreciate the sport at a very young age. It seemed only natural that part of my collegiate experience would involve being part of a "crew".

I first became introduced to a rowing machine in high school after I was sidelined from running due to an achilles tendon injury. I really enjoyed the solidarity of rowing on the machine in the gym and getting lost in my thoughts.

Community Rowing requires that it is located in Brighton on the Charles River, requires a decent amount of real-estate to house sweep and sculling shells, oars, and additional equipment. Community Rowing is a not for profit offering rowing outreach programs to at risk youth and disabled veterans.  the barriers to entry for rowing and made it accessible to all income levels in the Greater Boston area. I registered for a 90 minute introductory course that reviewed the basics of rowing where we had the opportunity to get out on the water. The first 45 minutes of the course covered the basic form of rowing and was taught on land with the assistance of a rowing machine. The instructor broke down the act of rowing into three steps for us to follow when out on the water; body, legs, arms. Rowing on the water as part of a crew proved to be far more challenging than I had anticipated. When crew members rowed out of sync it placed you in danger of having your oar roll over you which would give you the appearance of looking like a crab flipped on its back. Rowing with 9 other strangers proved challenging when trying to hold one another accountable for rowing out of sync. 

Like Zumba, Community Rowing seemed to be more inclusive than some of the boutique exercise classes I attended. This can be partly attributed to their not for profit status and attributed to their clearly defined mission of "Rowing for All". Inclusion is also a major factor in a team sport and for this lesson I did experience rowing as part of a crew. Community Rowing also offers classes rowing in singles, a conditioning gym, and indoor training during inclement weather. The instructor's level of training and experience was greater than the typical training. My instructor had rowed crew at Southern Methodist of four years and had moved to Boston to work on a new master of coaching in rowing at CRI. The typical level of training for a boutique exercise class such as Zumba, Soul cycle or Pure Barre is typically a personal training certification and individual training in the particular concentration. An interesting fact based on our teachers length of time and experience is that Rowing is a sport where in order to be good at it it does not require that a minimum amount of time for you to achieve mastery. If you learn the techniques and are physically strong you can row as well or better than a counterpart who has been rowing longer. This broadens the scope of individuals who can learn rowing, you don't need to be 20 to join the crew. 

I enjoyed my time at CRI and was really impressed with the quality of the facility as well as the instructors. I look forward to exploring additional classes.