The Cheap Revolution

Grass-roots, The Great Disruption and Sandcastle Corporations

The corporate sandcastles we've built are crumbling fast as the waves wash them away.  Some have called our existing system a "Ponzi Scheme".  Throwing billions of dollars to rebuild them may not be the answer.  Maybe its time for some creative destruction?  But what will replace the sandcastles?  The answer may be right under our feet.  How can we create new competencies for building effective grassroots organizations that can solve many of the emerging problems?

For the impatient reader, I have put together a brief list of some of the competencies that seem to be necessary for the grassroots organizations of tomorrow. Afterwards, I outline some of the root causes and possible solutions in more detail.

New competencies for new organizations

So we need to build new competencies.  I don't profess to know all of what these competencies are, but I'm getting busy studying the grassroots organizations that have worked to see what we can replicate.  Here are my early learnings from this journey...

1) Effective Grassroots organizations must be grounded in people gathering around a specific, common interest.  The more specific, the better. Its all about getting traction. A tight definition helps.

2) You need a BHAG (Big-Hairy-Audacious-Goal).   As Jim Collins tells us in Good to Great, big goals set our souls on fire.

3) People need to be passionate in the topic.  Passion drives personal investment and volunteerism.  These organizations thrive on self-fulfilling human energy (which is a renewable resource!)

4) Specific governance practices are key.  I'm sure there are many ways to do it.  My favorite is Holacracy. 

5) Specific processes help.  Some may find prescribed processes to be too rigid, but the most effective grass-roots organizations I've seen have specific protocols, that are kept simple and understandable.

6) Provide multiple communication channels... and allow easy participation.  Whether it's by email, a forum, a blogging platform or Twitter, you need to enable full contribution from the members.

What have you found to be effective in building grassroots organizations that can make real change?

The Great Disruption

The New York Times columnist and "World is Flat" author Thomas Friedman posted a recent column called "The Inflection is Near".  He highlighted the convergence of our economic crisis and environmental crisis and suggested that we may have hit a wall.  Joe Romm of climateprogress.org calls our current system for creating wealth 'a Ponzi scheme".  

Our institutions were created to convert exploited resources into wealth.  For hundreds of years, most of our marketplaces, exchanges, financial institutions, corporations and governments have been built on the backs of slavery, deforestation, burning fossil fuels and vast ghettos of human poverty.  If you need to see how we got here in more detail, check out the apocalyptic Internet movie Zeitgeist Addendum.

The Sandcastles are crumbling...

My good friend Valeria Maltoni of Conversation Agent and I were talking about this.  We observed that the institutions (banks, corporations, etc.) we've built over the past 50 years or so are like so many sandcastles laid out along a coastline.  And the waves are coming in higher and higher and washing them away.  And our government... actually most governments, are throwing money into rebuilding the sandcastles!

Grassroots to the rescue?

Could the answer be growing right under our feet?  I believe that Grassroots organizations are emerging to supplant the role of these depleted institutions with vibrant clusters of activity.  Passionate individuals are self-organizing into collectives which plugin into the economic grid. 

There is no greater example of a successful grassroots effort than the work of President Obama's Presidential campaign.  The folks at Blue State Digital, the team that built the popular My.BarackObama.com platform, report that the Obama campaign mobilized over 3 million individual donors to contribute over $500 million online, sent 2 billion email messages, motivated over 2 million social networking participants who wrote 400,000 blog posts and created and promoted more than 200,000 offline events across the country.  If this isn't a testament to the potential of grassroots organizations, then I don't know what is!  (BTW - I have the honor of introducing Blue State Digital CTO Jascha Franklin-Hodge in this week's Emerging Technology Enterprise conference.  Come if you can!)

To further illustrate the point, I was recently at an advisory board meeting for The Founders Factory, a grassroots-based event put together to support the Philadelphia Entrepreneurial Ecosystem. This eco-system, it turns out, was recently re-invigorated by another grassroots organization called PSL (Philly Startup Leaders).  During the meeting, the board members rattled off several new organic organizations supporting the Philly entrepreneurial and creative community without batting an eye.    (Philly Startup Leaders, Founders Factory, PANMA, Mobile Mondays, IgnitePhilly, ...)

Across business-people, spiritual seekers, hobbyists/enthusiasts and any other group that has a center of gravity around a common passion, new groups are springing up.  How many new, organic groups are you involved with?

Can the government help?

One last thought.  You may wonder if the government is going to be able to get with the program.  I was pointed to an article co-authored by incoming SBA (Small Business Association) Administrator Karen Mills.  Ms. Mills recognizes that 70% of business is generated by small businesses.  In a paper authored in 2008 on Industry Clusters, Ms. Mills and colleagues advocate fostering a system of regionally grown clusters that share in a common industry focus.  Sounds like a great opportunity for some grassroots development to help rebuild our failing economy.

Where do you stand on this?  Will it be business as usual as we rebuild or are we ready for some Creative Destruction... with new, grassroots organizations that grow to dynamically meet the needs of tomorrow?

Talk is Cheap…Do Something Already!

One characteristic entrepreneurs possess is the inherent ability to constantly think of new ideas. I, for one, am always thinking of new ways to use an already existing product, combine multiple products together, or (my favorite) - come up with a new product or service altogether. I usually get really excited and proceed to call up a couple of friends to discuss it with. After some time passes though, I tend to feel completely disheartened and end up back on square one. Why? Let me start with a few examples:

• In the summer of last year, I was reading Founders at Work by Jessica Livingston and found myself highlighting certain sentences and making notes on some of the pages. Suddenly, it hit me – why not combine a bookmark with a highlighter and pen (and/or maybe post-its) that I could use instead of having a separate pen, highlighter, bookmark and/or post-its? I called up my best friend immediately and discussed the idea. Next, I did a Google search and - to my dismay - found a patent on a similar product. (Thanks to print moving online and products like Amazon's Kindle, you can see it's also a product that was probably not going to get far).
• Another idea I was also excited about was an online service that allowed obsessed fans to have personal images altered to include their favorite celebrities. I put together a few for my sister (this is when I used to be handy at Photoshop) and she loved them. I also created an eBay listing to see if anyone would be interested in paying for the service. However, I quickly learned about copyright infringement and a lawyer I hired advised me to go in another direction.
• Just this year I put together a business plan for a clothes swapping marketplace and spent months working on a business plan. I entered it into Temple's Business Plan Competition where I was chosen as a finalist. However, I didn't place and abandoned the idea a couple of months later when I couldn't get past a key issue in my plan.

What's the common thread among these examples? I DIDN'T LAUNCH ANY OF THEM!

What is it? Are the ideas flawed from the start? Are there focus or execution issues?

It’s cheaper than it’s ever been to build an online business. Unlike 10 years ago, you no longer need to spend millions of dollars creating a website for your business from scratch. There are numerous tools and resources you and I are now lucky enough to be able to leverage. For example, you can set up an eBay or Amazon store, utilize Guru or Rentacoder, or you can even purchase already existing code.

The online space has changed and it doesn’t require as much time or money to get started. So why aren’t you or I taking advantage it? In addition, another problem I had was that I kept trying to come up with an original idea. Is there really such a thing anymore? Plus, there is ALWAYS competition. It's time that you and I embraced it and focused on creating compelling differentiators on our product or service instead.

Skip wrote a great post last year titled "To launch or not to launch? Three reasons to launch now." In it, he discussed how easy it is to engage would-be customers and to get up and running quickly. What can you do differently today to finally start your business instead of just talking about it? Here are some steps I laid out for my current venture that may help. These steps can be used as "gates" through which idea must pass successfully - or be terminated with mercy:

1.       Bounce your idea around. Create a sounding board of close friends and family members to discuss your ideas with. Listen to their feedback and refine the idea as necessary. Check out “Bouncing Your Idea Ball” for more information.

2.       Do some market testing. This is the step that will help you assess your market and competition to see if the market you’re pursing is as attractive as you think it is. A lot of entrepreneurs will want to skip this step so they can just focus on getting up and going but I wouldn’t recommend it – plus it could end up saving you time and money (See “5 Reasons to Market Test your Startup Idea”).

3.       Identify your differentiators. What’s going to make you stand apart from your competitors? Determine your position and make it compelling.

4.       Look for beta users. Say I decided I wanted to pick up the clothes swapping marketplace concept again. I would look for users who would be interested in using the service and constantly ask them for feedback on the website, features, etc. In other words, I’d get them to help me with my business model instead of trying to figure it out myself.

5.       Discover leverage points. Instead of building a “walled garden”, look for other ways you can get out there cheaper and faster. For example, can you create a Facebook application instead of a stand-alone site? Can you use the power of eBay’s reach or Amazon’s?

6.       Build your team. If you’re a technology person – make sure you find a business person and vice versa.

7.       Post your project on Guru or Rentacoder (For others, see “7 Alternatives to Guru.com”). This is optional – if you can do it yourself by all means, go ahead.

8.       Launch a minimal version. Get a basic version out and use feedback from your users to build out your site. After all, they’ll be the ones paying for it and using it.

9.       Market your site. Once you’ve worked out the kinks and built out your business model – get out there and start telling others about it (For ideas, check out our previous post, “25 Nearly Free Ways to Market your Business”).

This post was as much for me as it was for you. I hope you enjoyed it. What are you going to do differently today to launch your business?

By: Yasmine Mustafa

Most Common Entrepreneurial Myths

I've been at Team and a Dream for a little over a year now and I've been having a lot of fun working with early stage Internet companies. While involved with these entrepreneurs in their various projects, I've sensed a pattern of classic mistakes they seem to slip into from time to time. I've outlined the top twelve pitfalls I've encountered below:

• "I want to offer it all"

  Focusing is an important aspect of any start up. It allows you to establish credibility and expertise in the product or service you are offering. As Skip likes to say, "When you're all things to everyone, you're nothing to anyone."

  It seems counter-intuitive, but it also reduces costs and enables you to be more efficient. Allow yourself to be the best at what you do.

• "If I build it, they will come"
  

  Launching your site doesn't guarantee success. Let me repeat that -€“ launching your site doesn't guarantee success. Why the emphasis? A lot of entrepreneurs believe if they put something up, that's it. They've done the hard work. In actuality, that's not the case at all. There have been a few exceptions (such as Google) but it's obviously not something you can count on. Your site, including its content, needs to be designed around your users and their needs. Selling widgets doesn't mean much if no one wants to buy them.

  Another important aspect is to be different and unique. Don't look like every other site - it's boring! Also make sure you notify the search engines because your site is not going to market itself. No one will visit  your site if they don't know you exist or if they can't find you.

• "I don't have any competition"
  

  I was recently surprised when a client of ours with an extensive business background said this to me. There is always competition - whether direct or indirect. This particular client had a couple direct competitors and more indirect competitors. What was nice was they were mostly bad competitors which is your best-case scenario. It'll make it easier for you to outshine them and obtain more market share.
  
  If you honestly believe there is no competition to what you're doing - it's because there is no market for your product or service.
  
  Sharing your idea is a possible approach that can help you identify some competitors you weren't aware of. Validate your assumption further with a Google search or by conducting a market and competitive analysis.

• "I shouldn't share my ideas (because it'll be stolen)"
  

  This is something I personally struggled with a lot. I used to be extremely hesitant in sharing my ideas because I was afraid they might be stolen or they'll be told to someone else that would. I've gradually learned that I really have more to gain by sharing them. I can find potential partners, potential vendors, potential advisors, possible competitors – and I can get tremendous feedback to make my idea better. After all, two heads are better than one. Three heads are better than two, and so on...
  
  If you're still not convinced, it's much hard to execute on an idea than it is to hear it. If it's possible, get a patent to protect yourself. If you really think about it, it's actually a good thing if someone "steals" your idea because it validates it. The next step (what you really need to worry about) is preparing yourself for the competition. If it's that good and has the potential for profitabiliy, everyone is going to want to get into the pool as well. 

• "My idea has to be original (to be successful)"
  

  This is something else that I used to believe for a long time. I wanted to launch an online service that no one else has started, a service that was based on a completely original concept.

  Is that really feasible anymore? When I used to share my thoughts about this everyone would say "there are no more original ideas." A classic example is Microsoft - what original ideas have they come up with? Exactly, none!

2007 in Review: The Best and Worst in Business and Entrepreneurship

I've been coming across different lists from Mashable, Techcrunch, Business Week, Time Magazine, Fortune Magazine, the Wall Street Journal, and others that feature the best and worst products, startups, websites, moments in business, venture capital investments, etc. of 2007. What better way to re-evaluate the end of the year, get caught up on what you missed, learn from what worked and what didn't, and prepare for 2008? Lots of interesting stuff here - enjoy!

1. PC World – The 100 Best Products of 2007
2. PC World - The 25 Most Innovative Products of the Year
3. Entrepreneur.com - 15 Revolutionary Inventions of 2007
4. Inc.com – The Dumbest Products of 2007
5. Business 2.0 – Startups to Watch
6. Mashable.com – The Dumbest Startups of 2007
7. SEOmoz.org - 2007 Web 2.0 Awards
8. Time Magazine - 50 Best Websites of 2007
9. Time Magazine - 5 Worst Websites of 2007
10. Mashable.com - Best of 2007: The Coolest Web Apps
11. Lifehack.org - 11 Top New Web Apps of 2007
12. Time Magazine - Top 10 Best Biz Deals (of 2007)
13. Time Magazine - Top 10 Worst Biz Deals (of 2007)
14. PartnerUp.com - Complete List of 2007 Web/Technology Acquisitions
15. Forbes.com - The Midas List (Top 100 Tech Investors)
16. Techcrunch.com - The Year in Deals (Venture Fundings and Acquisitions)
17. Techcrunch.com - The Year in Deadpool (2007 Edition)
18. Mashable.com - Best of 2007: Trends that shaped the Web
19. Fortune Magazine – 101 Dumbest Moments in Business (of 2007)
20. Business Week - America's Best Young Entrepreneurs - 2007
21. ManagementToday.com - Britain's Top 100 Entrepreneurs
22. The New York Times - The 7th Annual Year in Ideas
23. Business Week – The Best Product Designs of 2007
24. The Wall Street Journal – Best of Ads, Worst of Ads
25. Content Marketing Today - The 5 Most Popular Examples of Bad Content Marketing

Have you come across a similar list? Let us know by leaving a comment below and we'll add it to our list.

Related Posts:

Most Popular Posts of 2007

By: Yasmine

Most Popular Posts of 2007

Our 10 most popular blog posts of the year based on traffic are:

1. Top 20 Entrepreneurial Quotes - This post was featured on the first page of Digg and on Entrepreneur.com's Blog. It features inspirational quotes from people of all walks of life. 
2. Quiz: What kind of Entrepreneur are you? - Take this quiz our own Skip Shuda created and figure out which of the 8 entrepreneur types you are.
   
3. An Evaluation of Popular Project Management Tools - Looking for a project management tool for your company? We evaluated six different tools for your convenience.
   
4. 25 Free (and Useful) SEO Tools - Free online search engine optimization tools to help you optimize your site.
5. Build a Web 2.0, Long-tail Social Media site for 12k? What's missing? - Skip questions Guy Kawasaki's post about building a Web 2.0 site on the cheap.
6. Find your Sweet Spot - What are you good at it? What should you pursue? Adapted from Jim Collins' HedgeHog Concept.
   
7. Top 12 Books for Entrepreneurs - Check out our book recommendations divided into two categories - for companies in the concept stage and for those in launch stage.
8. Alternatives to Guru.com - Ten alternatives to the popular online service site.
   
9. Natpal's Nate Stevens talks about recent venture raise - Skip talks to a former client about how he achieved funding for his startup.
   
10. An Evaluation of Logoworks - A post about our experience with the popular online logo design firm.

By: Yasmine

Announcing our Technology Entrepreneur's Circle

Our 25-plus years of experience with startups facing common issues has led us to create our newest offering - a circle of entrepreneurs at similar stages in their technology startups. The circle provides teams with access to a professional investor and a strategic advisor as well as a serial entrepreneur advisor for a fraction of the fees they would charge to consult with them individually. In addition, it also provides a network of support and allows us to leverage our expertise across multiple startups concurrently.

Furthermore, the circle also provides a network of support and allows us to leverage our expertise across multiple startups concurrently. As an added benefit, a Team and a Dream intern is available at the biweekly one-and-a-half hour facilitated sessions, providing entrepreneurs with extra muscle to put the ideas generated in the meeting into practice.

Our Program Details and Benefits:

· You work with two specialists. Twice monthly you’ll have a 90-minute teleconference with a professional investor/strategic advisor and a serial entrepreneur advisor.

· We focus on your issues.  There will be opportunities to bring your specific issues to the Circle for brainstorming and exploration.

· Intern consulting support included. Our cohort intern will work with each company for one hour on the topic of the week. (Additional execution is available)

· Online repository included. Each client will have an online repository to organize their project documents.

· Network and collaborate with a peer group. Meet and gain support from people struggling with the same issues as you.

· We will focus on special topics relevant to your company. The topics covered will be customized to fit your needs. Examples include Software Vendor Selection, Search Engine Optimization, Putting a Marketing Blitz Together, Business Plan Development, Assessing and Defining the Market, Competitive Issues, Go-to-Market Strategy, Developing Realistic financial projections, Creating Investor Presentations, etc.

· Includes a Value Needs Assessment. Provides a comprehensive map of what your business needs now.

· Savings of over $600 a month! You’ll work with two experienced specialists for a fraction of the price - allowing you to receive high value at a low price point. 

Our Advisors and their Background:

Skip Shuda is the founder of Team and a Dream, which helps early-stage technology companies get to the next level. For over 20 years, Skip has been an innovator in the use of new technology to enhance the growth and profit potential of early-stage software, service, and technology companies. He founded Destiny Websolutions in 1994 which grew to over $17 million in revenues and 120 employees. For more information on Skip's background, please click here.

Laurie Burstein is a professional investor manager, who knows what makes companies successful. Professional psychologist turned "veteran micro-cap investor," she has been rated as one of the top microcap portfolio managers in the country*.  She is currently the President of Oakwood Capital Management, Inc., and Managing Principal of Dartmouth Strategic Advisors. In addition, she is a Steering Committee Member of Temple University's Mid-Atlantic Diamond Ventures, providing support to early stage companies technology and life science companies that are seeking funding. Laurie has also been a judge at Temple University's Annual Business Plan Competition.

Thanks for the recognition!

Recently the top smallbiztrends website published a list with new small-business related blogs (including ours) indicated by Anita Campbell. We highly suggest checking these out and subscribing to her blog - a great read for entrepreneurs!

In addition LogoDesignWorks, a design tips blog has included us in their first carnival about small businesses and startups. Check it out for information on branding, identity, marketing, hiring, online efforts, success, productivity and more.

Find your Sweet Spot

Earlier this year, I taught a seminar called "The First Step" for entrepreneurs at the Wharton Small Business Development Center (SBDC).   Many SBDC clients are starting their first business.  They often come to the class wondering whether they are doing the right thing by taking this big leap into starting their own business.  One of the best exercises I've found for answering this question is to use an adapted form of  Jim Collins’ HedgeHog Concept' from his phenomenal book Good to Great.  (BTW I just discovered that, on Jim's Web site he has a fabulous diagnostic tool which covers this - for a business - and the rest of the concepts from his book! Way to go, Jim!)

A year-end walk around the four corners of our business life

The end of the year is a wonderful time to take stock of you and your business. We often have a couple of extra days of "down time" from work and are being encouraged to be reflective, make New Years resolutions, etc.

The example below provides a framework for a year-end walk around the different aspects of our life as a professional. Starting in the upper left and move clockwise, it takes you through your own internal states and feelings, your behavior and actions, the systems in which your business is embedded and the culture in which you and your business operates. Feel free to add your own questions.

Try it out and ask yourself which areas of your four quadrants are under-examined.

I wish you a happy time of reflection and a successful New Year - whatever that means to you.

On Trust: Astronauts don't launch their own rockets

Years ago, I wrote this piece to illustrate the importance of trusting others while building an organization. Sometimes your own self-importance gets in the way of growing a thriving business.

If you want to find other ideas like this, check out the Startup Advice page at Team and a Dream.

- Skip

Thousands of years ago, people could only get around on foot. They could cover maybe 15-20 miles with a good dirt road.

Horses came and enabled people to cover 20-100 miles per day.

Then some serious stuff arrived:

Boats. Out on the ocean. Cruising 24x7, non-stop to the destination. People might cover 200 miles or more a day.

Trains arrived. Moving faster now.

Automobiles. Faster still –and introduces the ability to go to more places.

Airplanes – really taking travel by storm. A jet can circle the world in a day.

But who has the prime seat? The championship ring? Who is the blue-ribbon prize-winner of travel?

The astronaut.

So let’s look at what the astronaut does.

This little guy or gal stands next to a structure nearly 20 stories tall. They climb into a little cockpit and strap tightly into a seat in the nose of this structure, with 2000 tons of liquid fuel at their back.… surrounded by hundreds of specialists, radar tracking systems, communication systems, guidance systems, life support systems, computing systems, systems to monitor the systems.

An engineer flips a switch...

And in 3 days…

This person can travel to the moon.

No other traveler can touch that.

What is the lesson of the astronaut?

The Astronaut gives up total control – and through complete trust in the people and instruments that have been put in place by them, the Astronaut accomplishes a milestone that literally moves mankind out of this world.

Through that trust, that total loss of control, the Astronaut becomes the most powerful traveler that has every lived.

Description:

The key to the Astronaut remedy is found through favoring trust over fear in your decision-making processes. Fear drives a scarcity mentality, which causes team members to hunker down, preparing for the worst. Trust enables a creative mastery of situations, allowing for growth and expansion.

Entrepreneurs would do well to master the Astronaut’s control through influence. By expanding one’s influence, they also expand their sphere of indirect control. By giving up direct control in favor of influence or indirect control, an individual can create a multiplier effect on their intentions. Multipliers translate into higher productivity, greater sales and a multitude of other important business results.

It is akin to asking the question:

“Would you rather have a smaller slice of an enormous pie, or own the whole pie that is tiny?” To illustrate the point, a one percent share of Microsoft today is worth over $2.5 Billion.

An entrepreneur can control:
1) what they give up,
2) to whom and
3) when.

This remedy requires careful consideration of the three factors outlined above.

1) What they give up. You should always perform to your strengths. If you have a strength, but lack experience, then bring on a mentor. If you have a blind-spot in an area, then fill it with an experienced and skilled person. Sweet Spot analysis can help with deciding what you should give up. Its okay to want to communicate and be informed, but don’t stifle your opportunity to grow by trying to have it both ways. Once you’ve given responsibility to someone else, you must give them the leeway they need to do their job. Otherwise, you never really gave it up.

2) to Whom. Since trust is a key enabler of this remedy, the people you turn your keys over to must be trust-worthy. Are they predictable in their behaviors? Do they operate with integrity? If you can’t answer these questions, then you probably need more time operating with them before turning over major responsibilities. Cultivate a network of people you can trust. You never know when you’ll need to tap them to step up a level.

3) When. Often, the time to release and trust is when it is most frightening. This is because your business may have reached a crisis point. You are faced with a dilemma that ultimately stems from your growth, or lack of growth, and must make a hard choice. Free yourself by giving up something and use the new-found time to go deeper and wider in the areas you maintain for yourself.

Examples of the Astronaut include:

Entrepreneurs who share generous amounts of equity with team members

Entrepreneurs who bring in an expert CEO to run their company

Senior Managers who delegate responsibility broadly and decisively

The Astronaut pattern description provides a table of Scarcity vs. Abundance theory as well as some additional details about this piece of startup advice.