Resourceful Companies Tend to Be Successful Companies

When you think of company resources you may think of money, time, employees, technology, etc. I can say with utmost certainty that there is not a positive correlation between the number of resources a company has and the increased probability of success. It certainly makes it easier if you have resources but the most successful companies understand that the most precious resource is resourcefulness. Once you become resourceful, you will always find ways to get the resources you need to make your dreams come true.

Photo by Paweł Czerwiński on Unsplash

However, companies fail all the time who may have had unlimited resources. Here are just a few examples:

Blockbuster: At one time Blockbuster had employed over 84,300 employees worldwide. At its peak in 2004, it had a market capitalization of over $5 Billion and annual sales of over $5.9 Billion. However, they failed to innovate and keep up with new technologies and in 2010, Blockbuster filed for bankruptcy. Blockbuster is now owned by Dish.

Toys R Us: After 70 years in business, childhood toy memories have vanished with the recent March 2018 announcement of the closing or selling off all Toys R Us stores.

Sears: Sears was once the juggernaut and industry leader in the retail space. They incorporated nearly 126 years ago in 1892. Amazon and online retailers have taken significant market share from Sears. Sears failed to embrace the new technologies that eventually led to their demise.

Sports Authority: On July 28th, 2016, Sports Authority closed all of their stores.

Kodak: Kodak was founded on Sept 4th 1888. It is one of the longest running companies in history but not without its many challenges. In Jan 2012, they filed for chapter 11 bankruptcy.

Juicero: Juicero was founded in 2013, raised $118.5 million and shut their doors in September 2017.

Jawbone: Raised $929.9 Million and after 17 years of operation, sold their assets in July of 2017.

A relatively young venture-backed company recently closed their doors. Shyp, a service meant to make it dead simple to ship anything by using your phone, had a lot of potential and raised $63 million from some of the most prominent VCs in the world. Customers loved them. Some even said their service was magical. They had an audacious goal of “being the new global standard in shipping.” However, even with all this money, they were still unable to succeed. Kevin Gibbon, their founder did a postmortem and here are a few of his quotes, “the investment we took, everything we got, wasn’t warranted for where the business was at. And I think that really hurt us. The expectations were way too high. We had a lot of capital. We had to deploy it. And I don’t think we were ready to do that. We prematurely scaled.”

Essentially Kevin knew they raised too much money, had too many resources and were forced to spend it without thinking resourcefully. This is common with VC backed businesses, they don’t give you money for it to just sit in the bank.

“While large, established companies have the financial freedom to explore new product categories for the sake of exploring, for startups it can be irresponsible.”

Rather than focusing on one thing and being the best in the world at it, Kevin lost focus and spent resources on other things.

“Growth at all costs is a dangerous trap that many startups fall into, mine included.”

The resourceful startup never falls into this trap.

At the end of the day, Shyp did not fail because they didn’t have enough resources, they failed because they failed to be resourceful.

Gibbon is said to be starting a new company, ”I think there’s an opportunity here to solve this pain point in a much more scalable way,” he says. “One hundred percent technology, and no warehouses.” Perhaps he will take a more resourceful approach to his next idea without the need to raise tens of millions of VC funding.

The older companies also failed to tap into the ultimate resource; resourcefulness. They no longer were able to develop the action enabling emotions that made them great companies, to begin with. They were no longer able to take any action. Internal innovation stalled. They were frozen in their antiquated ways because it is difficult to see the future when you are so wrapped up in the past. They fell into the dreaded “why change something if it is currently not broken” trap.

Google, on the other hand, has more resources than virtually any other company on the planet but they continue to tap into the power of resourcefulness. Why is that? For one, their mission of organizing all of the world’s information and making it universally accessible to all is an audacious mission that they are constantly trying to achieve. When you are always trying to fulfill the mission, you develop creative and innovative ways to help you get there.

In addition, when Larry Page, one of the founders of Google says to employees to always have a “healthy disregard for the impossible,” it empowers them to have an open mind which is critical to putting resourcefulness into action.

Google also has a mantra when releasing new products to market. They want each new product to be at least 10x better than any competing service that is out there. When you need to be 10x better than anyone else, your creative and resourceful juices begin to flow that enables you to be pushed to do things you may have thought impractical before.

Some of Google’s most successful products came out of something called 20% time. 20% time is given to engineers to work on virtually anything related to the business. Founders Larry Page and Sergey Brin highlighted the idea in their 2004 IPO letter:

“We encourage our employees, in addition to their regular projects, to spend 20% of their time working on what they think will most benefit Google,” they wrote. “This empowers them to be more creative and innovative. Many of our significant advances have happened in this manner.”

Some products that have been developed under the 20% time include Gmail, Adsense, Google maps and Google Chat. Adsense alone made up more than 23 percent — or $15.5 billion — of Google’s total 2016 ad revenue.

Amazon is another resource-rich and successful company that is extremely resourceful. Jeff Bezos, Amazon’s founder, and CEO says “The whole point of moving things forward is that you run into problems and failures,” He said in a recent interview.

He even let his four kids play with knives at age 4 because he says allowing them to take risks and be self-reliant teaches resourcefulness — a key trait both in business and in daily life.

Amazon has 14 principles they live by. Although most relate back to being resourceful and overcoming challenges regardless of position within the company, one, in particular, is the catalyst for a lot of Amazon’s success.

Frugality

“Accomplish more with less. Constraints breed resourcefulness, self-sufficiency and invention. There are no extra points for growing headcount, budget size or fixed expense.”

In the early days of Amazon in 1994, Jeff Bezos made his desk out of an old door. This led the way to other employees making their desks out of doors and this remained the quintessential example of the company’s frugality.

Today the company still gives out the “Door Desk Award” to individuals and teams that create significant savings for the company and customers.

Amazon is also known for being resilient and making big bets. In fact, in his first annual letter to Amazon shareholders in 1997, the CEO writes, “Given a 10 percent chance of a 100-times payout, you should take that bet every time.”

An example of this was their launch of Amazon Auctions in 1999 to compete with eBay. At first pass, this was a complete failure. Amazon then launched another service that completely flopped. After a third try, the things they learned from the previous failures led to a huge success called Amazon Marketplace, a platform for third-party sellers on Amazon. According to Credit Suisse, they estimate that Amazon Marketplace will contribute $135 billion to Amazon’s annual sales. They also estimate that by 2020, the marketplace will have grown to $259 billion.

“Things don’t work, you have to back up and try again. Each time you back up and try again, you’re using your resourcefulness, you’re using self-reliance. You’re trying to invent your way out of a box.” says Bezos.

Automation and The Future of Jobs

The cost to start and run a business has dropped dramatically from just 10 years ago. 10 years ago, if you sold products and wanted to build a website, it would have cost you well over $400K to get up and running with very limited features. Today, you can sell your products online within hours and have an almost endless amount of features for $29 a month with the basic Shopify.com package.

These are just small examples of how automation, APIs (application programming interfaces) and increased computational power has changed the way businesses are started and operated. One key reason for this exponential growth is due to Moore’s Law. Moore’s law is the observation that the number of transistors in a dense integrated circuit doubles approximately every two years. In simpler terms, computers are becoming smaller and more powerful at an accelerated rate.

Today, we literally carry all of the world’s information in the palm of our hand. The iPhone or Android phone you use every day has more computational power than the computers that sent Man to the moon.

This acceleration in technological advancement means more and more of our daily routines and even jobs will be fully or semi-automated within the next 10 years.

A recent 2017 study by The Mckinsey Global Institute cautions that as many as 375M or 14% of the Global workforce will need to switch occupational categories by 2030 due to automation. They also predict that nearly half of today’s work activities could be automated by 2055.

However, that doesn’t mean that robots are going to take over the world and all of our jobs. At least not yet. For most, this simply means we will become more efficient at our jobs and even have more time to explore things that we may enjoy more. For example, while at Google I would work on campaigns where I had to generate millions of keyword suggestions for clients using excel spreadsheets. MBAs from top business schools were doing the same. Within a year or two, this process was fully automated but we didn’t lose our jobs, we simply focused on more creative and strategic things to help our customers become even more successful. Automation can actually stimulate employment by lowering the price of a good or service and unleashing untapped demand.

The report says that the jobs in jeopardy from automation are the physical ones where people operate machinery, prepare fast food, collect and process data, originate mortgages and do paralegal and accounting work. These jobs are relatively easy for computers and artificial intelligence to replicate and do even better.

The jobs that are least at risk of automation are the jobs involving managing people, as well as high-expertise jobs like engineers, scientists, plumbers, educators, IT professionals and healthcare providers.

One example of an entire industry that will be disrupted by technology is the car industry. The advancements in autonomous self-driving vehicles will force taxi drivers, truckers, and car salespeople to switch occupations. Companies like Google, Uber, and Tesla already have millions of miles of self-driving under their belts and this is starting to accelerate as more cities and municipalities develop new laws to catch up with the technology. You see, the benefits of self-driving cars and trucks outweigh the risks and potential jobs losses in doing so. Mckinsey predicts that these types of jobs have a 55% chance of being fully automated by 2030. I would argue this will be closer to 100%.

Imagine a world with no traffic, no smog, no stop signs or stop lights, no angry drivers, no loss in productivity, no carpooling lanes, no more traffic stops or traffic tickets, no more taxis, no stolen cars, no more gas stations and most importantly no more deadly car accidents.

As John Lennon said, “it is easy if you try.” By 2030 it is estimated that autonomous vehicles will be ubiquitous throughout the entire world. Technically, very few people will actually own cars. We will simply hail one with our phones and one will be in front of us within minutes ready to drive us to our final destination. These “pods” will be powered by the sun, electricity and even magnets. They will be so efficient that traffic will become obsolete and accidents non-existent.

The future entrepreneurs within the car industry will be those who own a fleet of autonomous vehicles that make money 24 hours a day, 365 days a year by deploying their fleet to drive passengers to their next location.

How can this be possible in such a short amount of time?

Ray Kurzweil, the futurist and VP of Engineering at Google, literally wrote the book on it entitled, “The Singularity is Near.” In it, he explains that technology is decreasing in size and increasing in computational power exponentially. Every 10 years, technology decreases in size by 100x. This means, by 2025, the computational power within your smartphone will be small enough to fit into a red blood cell. This nanotechnology will not only radically change how we drive, but it will also change how we live, eat, breathe, love, think and transcend into what many believe will be a higher state of consciousness our current minds can’t even begin to comprehend.

Many of us will be a hybrid of AI and DNA. Medical advancements will allow for millions of “nanobot surgeons” to operate in our bloodstream, killing off diseases and cancers well before it can do any damage. In Kurzweil’s most recent book, “Transcend,” he says by 2030 technology will be able to rebuild any human organ with our own cells. If you need a new heart, a machine will build one for that is fully functional using 3D printers and 100% made from you.

Kurzweil believes that by this same time, the average lifespan will increase by 1 year every year. It is not unrealistic to have 200, 300 or even 400 plus-year-olds running around like teenagers by the end of this century.

But, in order to get there, we must take small, incremental steps towards a safer future. We must start with something that kills more people each year in the US than anything else that is non-health related. Deadly car accidents are number 3 on that list, behind cancer and heart attacks.

It might just very well be that the technology we develop to make self-driving cars, becomes a catalyst for developing technology that will be used to cure cancer, eradicate poverty, eliminate disease and help us live forever.

The Fake it Until You Make it Approach To Business Validation

In 1984 Richard Branson’s flight from Puerto Rico to The British Virgin Islands was cancelled. The airline didn’t have enough passengers to warrant a flight so he decided to charter one, grabbed a blackboard and as a joke wrote, ‘Virgin Airlines’ on top of it. He then wrote $39 one way to BVI. He went out and proactively rounded up all of the passengers and filled his first plane. Virgin Airlines was born on that day. Richard was frustrated with how airlines treated their customers and wanted to make a change. This first real life and resourceful validation made it a lot easier to jump right into the business. To protect Virgin’s downside, Branson creatively worked out an agreement with Boeing. Within the agreement, should the airline fail within 3 years, Virgin could sell the 747 back to Boeing for an already predetermined price. This is truly the resourceful approach.

Photo by Suhyeon Choi on Unsplash

In 1998, Bill Gross of Idealab was frustrated with the existing process of buying a car and wanted to start selling cars online. To validate this idea, they quickly set up a website in one night and ‘faked it until they made it.’

“We gave the CEO a 90-day contract to work for us as a consultant, and his goal was to sell one car. I told him to complete the whole transaction, financing and everything, and then go buy the car at a dealership. I didn’t care if we lost money. My focus was just delivering the car to the customer’s house on a flatbed truck, just seeing what the experience is like — and if people love it.” Gross said.

They sold 4 cars in one night. Gross got his validation and had to shut the site down until they could completely build it. This site, CarsDirect was sold to KKR in 2014 for $1.1 Billion.

Let’s say we were to develop a “Coach” app that used AI and your phone to give real-time coaching feedback for any sport. We could actually fake this quite easily and show the athletes and coaches how it would work as if it was already built. For example, we could live stream a Microsoft Skype or Google Duo call and point the camera from our phone at the batter. We could then have a professional athlete or winning coach on the other end taking notes and using a virtual pencil to show where the athlete can immediately improve their swing.

This real-time feedback could be in the backend, where they don’t even know there is a coach on the other side. All the customer would see is feedback on their form. We of course, would eventually use artificial intelligence and learning algorithms to accomplish this at scale but the purpose of this is to get feedback from the coaches and athletes who will be using the service. We need to quickly and resourcefully validate the idea before we build it.

Tips to Becoming More Creative

Being creative is one of the most important traits of being resourceful. Some people are born with the ability to leverage their right side of the brain more than others. The right side of the brain is responsible for art awareness, creativity, imagination, intuition, insight, holistic thought, and music awareness. As compared to the left side if the brain that is responsible for logic, analytic thought, science and math, language, writing, and numbers skills. With that said, we can all train our mind to be more creative by leveraging more of our right side of the brain or we can train our mind to think more logically with our left.

Photo by Alice Achterhof on Unsplash

During the inevitable continuation of the automation of our jobs, those that are the most creative and critical thinking will thrive. We will see a new resurgence in creativity like we haven’t seen since the original renaissance within the 14th and 17th centuries. Creativity and the ability to think critically will be the most sought-after job skill for both employees and entrepreneurs.

In 2016, the World Economic Forum published, “The Future of Jobs.” In it they say the future skills needed by 2020 compared to 2015 will change dramatically. The skill of creativity will be number two on the list, right behind complex problem-solving.

According to Keith Sawyer, a research psychologist and author of “Zig Zag: The Surprising Path to Greater Creativity,” everyone can become more creative by taking a nonlinear path and practicing to train the mind with 8 simple steps.

Step One: ASK — Ask the right questions.

The way we ask a question can change the end result of the solution dramatically. Sawyer offers a few real-world anecdotes where the right question led to the biggest impact. For example, Starbucks would not be where it is today if Howard Schultz of Starbucks asked the same old questions like, “How can I replicate the Italian espresso bar here in the US?.” Instead, Howard asked a different question, “How can I create a comfortable, relaxing environment to enjoy great coffee?”

Imagine how much different the world would be if Larry and Sergey of Google didn’t ask the following questions, “How can we organize all of the world’s information and make it universally accessible for all.” Or “How can we provide the right answer to any search as the first result?” or “How can we make search as good as a human answering a search request,” but instead asked, “How can we make a search engine similar to Yahoo?”

Sawyer offers some tips on how to ask the right questions.

  • Quickly and without overthinking it, write down 10 variations of the same question.

For example, you might rewrite the original question of, “How can we make cars safer?” by asking, “What are the current causes of car accidents?” or “How can we eliminate the need for human drivers?” or “How can we bring car accidents to 0?” As you write these questions down, your new questions should be much clearer than your original.

Debug your life

Take a look at the various products and services you use every day and make a list of all of the pain points, problems or annoyances you experience with them. This can accelerate creativity because little annoyances tend to be a systemic problem. For example, here are a few annoyances I saw with my cell phone provider:

– Random dropped calls even when I have “bars”
– Auto-connecting to password protected wifi
– Spam callers
– Data usage too high
– Pricing sucks
– Throttling of phone when it gets older
– International traveling is brutal when I have to add new SIM card
– Excessive International Fees
– Lack of pricing and usage transparency
– Stuck with one cell provider
– Locked into excruciating long contracts

BTW, all of these annoyances are some of the same ones Google noticed and decided to solve for. A few

Step Two: LEARN — Become an expert.

Sawyer writes, “Successful creators don’t just like knowledge, they thirst for it. They can’t stop asking questions, and they always go beyond what they’ve learned from teachers and books,”

When you follow your passion and live by your purpose, you will do anything to become an expert in that subject. You will read books, listen to podcasts, write articles, develop mentors, and more. All of this will lead to you being able to ask better questions to help solve bigger problems within your field of expertise.

Step Three: LOOK — Be open and aware.

When you buy a new car, do you start to see that same car everywhere you look? If so, your mind has been opened to see things differently than you did before. You are in a state of creativity even without knowing it. Creative people are constantly in this state of mind where they are constantly on the lookout and looking for solutions. Throw your expectations of things and people out the door. Instead, begin to approach life in a much more open mind.

Play with children’s toys

“I’m not the least bit self-conscious about my toy collection,” Sawyer writes. “If you walk into just about any super creative company, you’ll find toys all over the place.”

Make your own luck

Curious people tend to always be at the right place at the right time. They tend to network more and notice things more. “Unlucky” people tend to be less open and tenser, missing out on opportunities that may be right in front of them.

Make lemonade out of lemons

Viagra was originally developed for heart disease. It was being tested as a cardiovascular drug for its ability to lower blood pressure. However, a major side effect gave the company who produced it a nickname called, “Pfizer Riser”. Instead of quitting and killing off the product, some very creative people turned these lemons into very profitable lemonade

Step Four: PLAY — Play and pretend.

Become a beginner

As if you are a child again where everything you did was new, try to do something you have never done before. Maybe it is bowling or golfing or juggling. Go out and give it a try.

Leave something undone

Try to not complete a task you have and go to bed. “Cognitive threads” are left in the mind when you leave something undone. In the morning, you may find inspiration in the shower or in the bathroom because of these “cognitive threads.”

Explore the future

Close your eyes and imagine what your life will be like 5 years from now. Write down in detail what this success looks like? Then write down how you got there. Ask yourself questions like, “What obstacles did I face during this journey and how did I overcome them?” or “What motivated me to accomplish these goals?”
Step Five: THINK — Generate lots of ideas.

Writing down lots of ideas helps the part of the brain that psychologists call “divergent thinking,” the process of generating multiple possibilities. The best way to come up with creative ideas is to generate lots of ideas. Go ahead and write down as many ideas as possible during these exercises.

Household objects

Each day, select a common household object like a broom, comb, brick, shampoo, etc and take 5 minutes to write down as many unusual uses for an item. For example, you could use a broomstick to hang clothes on, or maybe even use the bristles to make a hairbrush. One measure of creativity is to look at how long your list is for each item. Each list you do should get longer as your brain becomes accustomed to the creative process.

Roll the die

Take a six-sided die and roll it. Use the number that comes up to select the corresponding question.

1 — How would the world be different if you had two heads?
2 — How would the world be different if we lived underwater?
3 — How would the world be different if we didn’t need oxygen to breath?
4 — How would the world be different if men had babies?
5 — How would the world be different if we didn’t have a language?
6 — How would the world be different if we had no gravity?

Take out a piece of paper and write down a list of specific facts about these alternate universes. If the above statements were true, what would these worlds look like? Write down as many as you can without overthinking.

Set the perfect idea time

Set 15–30 minutes each day where you are without distraction. For some, it may be right when they get up, for others it might be before they sleep. Whatever it is, select a consistent time that works for you.

Step Six: FUSE — Fuse these ideas.

Fusing is the ability to combine things together that normally don’t go together. British neuroscientist Paul Howard-Jones did a study where he asked two groups of people to write a story based on a few words. In the first group he gave them three related words like “cat”, “dog” and “pet” and in the other group he gave them three unrelated words like “truck”, “school” and “pool”. In the study, he found that those that were presented with the unrelated words were able to construct much more creative stories compared to those who had related words.

The remote association technique

Grab two separate books and randomly go to the same page in each book. Maybe that is page 130. Then take the 5th sentence on the page from each book and develop a story that connects the two.

Use analogy

Let’s say you want to generate new prospects. Here are a few simple steps to help you generate ideas outside the box.

Step 1 — Generate an analogy that doesn’t relate to your subject. For example, going to the beach, cooking a meal, playing a game, going to a wedding, going to a funeral, making dinner, taking a shower, etc could all be unrelated analogies for gaining more customers.

Step 2 — Find similarities with your subject and analogy. For example, gaining new prospects is like…going to a wedding because in both instances ……….you can network with new people, you sometimes don’t want to go, you hear speeches, you don’t always have time for it, it can be a very pleasant experience, the people you meet will have different reasons for being there, you need to prepare for it, etc.

Step 3 — Use these similarities to generate ideas on how to gain more customers. For example, “you can network with new people” can prompt you to generate additional ideas like leverage LinkedIn better to reach out to potential prospects, go to industry conventions and set up meetings, or maybe even put together a referral system that incentivizes your existing network of customers to promote your business for you.

Step Seven: CHOOSE — Choose the best ideas.

Now that you have generated a tremendous amount of ideas, it is time to select the best ones.

Make ideas compete with each other

Select the best ideas that rise to the top and have them compete with each other. Write down the pros and cons of each. Define how they are different. If you have too many great ideas, try to cluster them into common themes.

Never stop editing

Get feedback on your idea from your spouse, co-worker, colleague or even strangers. Don’t fall in love with your idea so much that you get offended when someone critiques it. Have an open mind and take this as positive feedback. Remember even failed ideas can turn into winning ideas. The post-it note was originally developed as an adhesive but it didn’t work very well.

Step Eight: MAKE — Develop something out of the best ideas.

Take action and make something out of your great ideas. You can draw something on a piece of paper or napkin, you can use wireframe software or even legos to make your idea become a reality.

Sawyer says that these steps do not have to be done in a linear fashion, instead, “making seems to happen most naturally at the end of eight steps, you can use its technique to enhance the other seven steps too. Making your ideas can help fuse them, and choose the right ones. Making the things you see each day while looking can help you translate those sights into new ideas, or clarify your original question, or realize what you still need to discover. ”

Bonus

Here are a few more tips to help you become more creative. This will also help you generate unique business ideas on the fly.

Paint your room blue.

A study in 2009 by the University of British Columbia entitled, “Effect Of Colors: Blue Boosts Creativity, While Red Enhances Attention To Detail” found that “for creative tasks such as brainstorming, blue environmental cues prompted participants to produce twice as many creative outputs..”

Don’t brainstorm.

Keith Sawyer recommends not brainstorming because “when brainstorming fewer ideas come up than when those same people work individually and then share their ideas afterward.”

Go to a comedy club or watch a funny movie.

A book by Mark Beeman of Northwestern University and John Kounios of Drexel University called “The Eureka Factor: Aha Moments, Creative Insight, and the Brain” studied the effects of happiness and creativity. They found that feeling of happiness triggers the part of the brain that makes us more creative.

Go to a wine and paint store.

Researchers from the University of Illinois at Chicago studied the effects alcohol has on the creative process. They found those that were intoxicated were 30% more likely to solve a creative problem compared to those that did not drink.

Doodle.

Studies have shown that doodling can free up short term and long term memory, as well as help, produce creative insight. In Sunni Brown’s book entitled, “The Doodle Revolution,” she says “when the mind starts to engage with visual language, you get neurological access that you don’t have when you’re in a linguistic mode,”

Try a few doodling exercises.

Take out a piece of paper and randomly draw a line or two and add a squiggly line anywhere on the paper. Take a few moments to see if you can draw a new image based on these random lines.

Grab a photo or cut our a picture from a magazine. Glue it on a larger piece of paper or poster board so that you have plenty of room to add to the picture. Use your imagination to expand the picture outwards where you can draw the surrounding areas. For example, if you cut out a photo of Jennifer Aniston skiing in the Mountains, can you complete the photo by drawing what is outside the original image. Other skiers? Mountains? Chair lifts, etc.

5 Questions to Ask During In-Person Interviews for New Products

The In-person interviews tend to be much more helpful than just customers surveys for a variety of reasons. One, they are much more personal and you are talking to a potential future customer who is in your target market. Two, when you ask open-ended questions, you may not only get validation for your idea but other customer problems might arise that you didn’t even think about. Third, you can gain access to additional potential customers that fit your customer persona by simply asking for references.

Photo by Emily Morter on Unsplash

It might feel most natural and productive to go straight to the question you want an answer to like, “Would you use a product that does ___________”. There are many problems leading or even asking this question. For example, it is a closed ended question where most of the time you will get an answer of yes or no. Secondly, by leading with your business idea, you are already looking for validation. The customer will sense this and they may even try to be nice and say yes, “I would use that product,” just so they don’t hurt your feelings. Third, you are referencing the future by asking “would”. If you find yourself asking a question with the word “would” in it or referring to the future, it is time to change the question.

Here are 5 questions developed by Customer Development Labs you can script as a starting point when asking your customer questions.

What’s the hardest part about [problem context] ?
Can you tell me about the last time that happened?
Why was that hard?
What, if anything, have you done to solve that problem?
What don’t you love about the solutions you’ve tried?

Let’s go ahead and dissect each of these questions to understand why we are asking them.

Question #1 — What’s the hardest part about [problem context] ?

This leading open-ended question will evoke many responses and you may even see a physical reaction where the pain point is so high, they physically show their pain with their reactions.

Question #2 — Can you tell me about the last time that happened?

Stories are the portal to the soul. When your customer tells us a story of when they last experienced this problem, emotional and physical responses will be triggered allowing us to gather even more data and insight.

Question #3 — Why was that hard?

As we discuss in our what is your why section, customers don’t buy your what, they buy your WHY. We will dive deeper into our organizational WHY in the near future which will also help in our marketing copy.

Question #4 — What, if anything, have you done to solve that problem?

This question will give us a lot of information on whether or not our solution to the problem is strong enough for the customer to be moved to use and buy it. If they say they haven’t tried to solve for it because the pain hasn’t been great enough, then maybe it is time to look for a bigger problem and pain point to solve.

Question #5 — What don’t you love about the solutions you’ve tried?

This will lead to our unique value proposition of why our product and solution will be different than their current alternatives.

You can also close out the interview session by asking a variety of closing questions including

Do you know 1 or 2 other people who are struggling with [insert the problem they are most actively solving] that I might talk with?
I’m actually exploring a solution to [insert the problem they are most actively solving] problem. Can I contact you if we find a viable solution?

In most cases, potential customers are more than happy to sit down with you and help make your product better or bring your idea to life as long as they understand your purpose of trying to solve their problems. However, in some cases you may have to bribe or incentivize your potential customers with free swag or gift cards. For example, we could have offered 10 high school coaches and 10 high school athletes a $10 Starbucks card if they sat down with us for 15 minutes to answer these 5 questions. Let’s look at the “Coach”app example and see what type of questions we could ask potential customers who aligned with our customer personas.

Question 1: What’s the biggest challenge you face as an athlete when you are practicing without a coach?
Question 2: Can you tell me about the last time that happened?
Question 3: Why was that hard?
Question 4: What, if anything, have you done to solve that problem?
Question 5: What don’t you love about the solutions you’ve tried?

Closing Questions:
I’m actually exploring a solution to give athletes real time feedback without a need for a coach. Can I contact you if we find a viable solution? Or I’m trying to understand this problem from a wide range of perspectives. Do you know 1 or 2 other athletes who are struggling with getting feedback when practicing without a coach that I might talk with?

The in person customer interview process is by far the best process to reach your target market and better determine the real pain points they are experiencing.

Joe Gebbia, a co founder of AirBnb, calls this process nlightened empathy.
“We used to travel and actually stay with our customers,” says Gebbia. “It was the ultimate enlightened empathy–you were so close to the people you were designing for that it informed you in a way that, you know, an online survey never would.”

A Simple Vision and Alignment Tool For Any Business — V2MOM

Your original strategy cannot be 100% set in stone. It must, however, be strong and malleable enough to be hammered, stretched, poked and prodded out of shape without breaking or cracking. As the industry landscape changes, your strategy will shift shape multiple times over and your purpose and passion will get you through the inevitable tough times.

Once you have your Vision, Purpose, and Values, it is essential that you develop ways to align and communicate these into an easy to understand and action producing document. We will discuss a variety of tools that you can use to help with communication, alignment, and transparency. Feel free to use the tool that works best for you, your company and team. You can use one of these tools, all of these tools or your own, do what feels right. Explore, test and revise, you will eventually find the best tool that works for you.

V2MOM

In 1999, Marc Benioff and the co-founders of Salesforce.com, wrote down their vision of the company on the back of a large American Express envelope. They wanted to develop something that would allow them to adapt continuously while aligning and communicating the company’s visions and goals throughout a fast-growing company. They called it, V2MOM, pronounced “V2 MOM”. This acronym stands for Vision, Values, Methods, Obstacles, and Measures. This tool is extremely easy to digest and can be understood by anyone.

Vision helped them define what they wanted to be and do. The Values, in order, set the principles that guided the vision. The Methods communicated to everyone the actions that needed to be taken to get the job done. The Obstacles outlined the challenges, pain points and problems they would have to overcome to achieve their vision. Finally, Measures was the actual result they aimed to achieve. This was their GPS, their map of where they wanted to go and the tool to help them get there.

Below is the actual first Salesforce.com V2MOM that was completed on 4/12/1999.

Marc says, “The beauty of the V2M0M is that the same structure works for every phase in the life cycle of an organization. We’ve used it as a business plan for our start-up, and we find the same construct to be effective for outlining the annual goals of a public company.”

Everything You Need to Know About the History of Podcasts

The Statista Research Department conducted a study in 2018 on the market overview and consumer habits of the podcast industry. They identified that the number of podcast listeners in the USA is estimated to be 73 million. By 2022, they forecast that the numbers will grow to 132 million.

The study backs its numbers to the rising trend in listening to podcasts with 44 percent of the population claiming to have listened to a podcast once.

With more users jumping into the podcast train, have you ever wondered how it all started? What is the history of podcasts, and what factors have shaped this industry to what it is today?

Photo by Jason Rosewell on Unsplash

The History of Podcasts

You can trace the birth of podcasts back to Dave Winer and Adam Curry, the godfathers of the podcasting industry. Dave Winer was then a software developer and an RSS evangelist.

Podcasting came to fruition in 2000 as a result of a meeting between Dave and Adam where they were discussing the distribution of automated media. Their focus and conversation direction was mainly on videos rather than audios.

During this period, the world was not yet conversant with broadband internet connections. Therefore, Dave was uneasy with the capability of the internet to carry large video downloads. He was also unsure if the cost implication of transporting the content was worth it.

He deduced that the time for downloading the content was longer than the viewing time. When you downloaded the video, it was of poor quality, or you were not sure what to get.

He was, therefore, against the idea of creating a video downloading platform that was subscription-based.

Adam, on the other hand, had his focus on internet connections. His main concern was the bandwidth that goes to waste whenever you are not using your internet.

He wanted to get software that you could use to download only the items from your subscription list. Although it was not a new idea, there was no software then that could work as they wanted.

At the time, Dave was already creating a Real Simple Syndication Feed (RSS). The platform is meant to help in the creation and sharing of stories through the internet.

An RSS text file can contain both static and dynamic content. Therefore, you can use it to transfer content from one site to another.

Dave needed to find a medium that he could use to deliver content through a subscription system. The meeting that took place in 2000 set the stage for the development of his vision.

Getting Media Attention

At first, everything started at a slow pace. It was until the summer of 2004 when Adam decided to program and develop the first podcatcher application using Apple scripts. His partner, Dave, had his doubts on the functionality of the software.

However, Adam laid the concerns to rest as his application was successfully able to grab and download audio from Dave’s weblog. The program was able to read through the RSS and download the audio.

The podcatcher program had a specific way of working. It could sift through the files on the RSS feed and look for enclosures. Then, it could grab and download all the files in the enclosures.

Finally, it would use the iTunes API to add the files to the playlist. It would then become more comfortable to sync the audio to the iPod.

Dave Winer began working with Christopher Lyder, one of the leading Journalists at the time, by using his RSS feed on Lyder’s blog.

Lyder took recordings of interviews during the 2004 presidential elections and started to post the audio online. He then became a strong advocate for the continual development of software that supports the use of audio online.

During the same year, in October 2004, the name “podcasting” started to gain attraction. A journalist by the name Ben Hammersley used the name while describing the new internet radio broadcasting in The Guardian.

Podcasts Becoming World Renown

The number of people searching for the name “podcast” on Google increased with reports of 2750 hits on Google’s search engine in October 2004.

George W. Bush became the first President of America to create a podcast when the RSS 2.0 feed was uploaded on the White House website.

The numbers continued to grow considerably as more people became aware of the meaning of podcasting. In 2015, there was a record of more than 100, 000,000 searches from people from all over the world.

As the name gained popularity, new media creators started to jump into the boat, and more podcast networks continued to emerge. The podcasts conveyed different types of content. While some of them were based upon topics, others were for entertainment purposes.

Additionally, Yahoo also joined the podcast market in 2005 after launching a podcast directory that allows users to stream, download, subscribe, and review podcasts. They inspired the likes of Feed Burner to create their podcast directory.

However, Yahoo ended its services in October 2007.

The Entry of Apple into the Market

One year later, after the founding of the first podcast directory, Apple decided to join the ranks by setting up its directory to iTunes. Steve Jobs gave a clear guideline on how one creates their podcast, and he referenced podcasts to becoming the future of audio.

His acknowledgement was instrumental in increasing the fan base of the use of podcasts. Additionally, the entry of Apple into the market increased the accessibility of podcasts all over the world.

Users were able to subscribe to, download, and organize podcasts in the new iTunes. Apple also encouraged users to create podcasts through its Quicktime pro software as well as the GarageBand Software.

They also encouraged the use of MPEG4 Audio instead of using MP3.

The rise in popularity of podcasts started to compete directly with the conventional radio broadcasting model. Within less than two years, Apple was able to record 4.8 million podcast downloads, which was way higher than the 800,000 people from 2004.

Taking Podcasting Mainstream

In 2014, there was a podcast called ‘Serial’ that was released, grabbing the attention of millions of American Listeners. The podcast was about the daily livelihood of an American.

The listeners were always curious about the changing plots of the series. After the thrilling series ‘Serial,’ several people took a liking to the podcast, and the number has since continued to rise.

The Introduction of Smart Devices into the Market

The name podcasts were the combination of ‘iPod’ and ‘broadcast.’ The name came about as a result of the process of getting music into your iPod.

Initially, you had to download music or audio to your computer then transfer it to your iPod. The iPod had to have an internet connection for it to function.

The technology today is very different from that in the past. With the development in iPhones and the improvement of networks strength to 4G, it is now easier to stream and listen to podcasts.

Additionally, the smart speaker is another hardware device that is aiding the podcast industry. A significant number of smart speakers are used in the playing of podcasts every week. The numbers are set to continue rising.

The ongoing trend is the increase in the quality, quantity, and accessibility of podcasts. This trend is what is increasing the numbers of listeners. Due to increased awareness, many people are reacting positively to the use of podcasts.

Advertisement Through Podcasting

You can easily trace the roots of advertising to thousands of years ago. Different mediums carry their method and strategies to engaging with potential clients.

Traditional advertising mediums are becoming less effective. Marketers are beginning to embrace newer trends, especially in the digital space. One such method is the use of podcasts.

According to the IAB, the podcast ad revenue in 2017 was $314 million.

There has been a rather astronomical rise in the use of podcasts to perform advertising. Even though the podcasting industry has been in place for more than ten years, it has not been long since advertisers started giving much bigger budgets to a podcast.

But what makes podcasts to be effective methods of gaining consumer attention?

Since podcasts consist of audio, the listeners tend to trust and rely on every word in the podcast. Therefore, advertisers looking to get their brand known can use podcasts to reach more people.

Also, since people listen to podcasts due to their respect of the host, you can use that to your advantage by getting the host to endorse your products.

When a host endorses a product, they do not recommend two similar products. By doing so, they dilute the effectiveness and authenticity of the endorsement.

Paying for Podcasts?

The Chinese podcast market is the opposite of the American market. The Chinese podcasts do not rely on advertising but instead on paid subscriptions. The government estimated the paid podcasts in 2017 to be $7.3 billion.

Are consumers in the west willing to pay for subscriptions?

Consumers spend their cash on film, TV, and streaming ad-free music. But why do they not do the same for podcasts?

It is usual for new content to first start as free, then when the audience grows, it changes to a premium product that people can pay to get.

The podcast industry has been running for more than two decades. With more people familiarizing themselves with it, it is finally going mainstream.

Similarly to music streaming sites and online radio platforms, several people would avoid audio ads by paying a subscription fee. Spotify is such a platform that has made a tremendous effort in building their podcast.

The company shows the ads to force users to pay for a premium package that gets rid of the advertisement. There are, however, many companies that are not worth paying the subscription fee. They are similar to the articles you find on the internet.

Before you spend your money on a subscription, you should ensure that the content is exceptional and stands out. Even so, with the ongoing trend, you are more likely to see podcasts that are free and supported by audio ads.

From The Past to the Future

Podcasting is transforming the digital era and taking the mantle to be the lead source of both information and entertainment. Any individual or business can reap benefits from a podcast. It is one of the leading marketing tools that every business is trying to get.

By podcasting, you can close off the distance between you and your target market. It ensures you get a closer relationship with your audience by providing informative, engaging, and frequently updated content.

As podcasting continues to evolve with time, so will the devices that you use to store data. The Broadband network was a game changer to how data is stored. The 4G network helps you get real-time information.

Now that the wireless network continues to improve, we expect the devices that can help in podcasting will also change with time. Instead of having a two-step download process of the files you want, you can now do it with only one step.

However, even with the emergence of new modern tech, it does not necessarily mean that it is the end of the old technology. It is tough to get rid of an iPod just because there is an improved iPhone version.

Getting Started

Although the old technology may not be of use, they still hold significant historical value as they tell us of where we have been and where we are heading.

By thinking more about the history of podcasts, you get to wonder what lies ahead in the future. Will there be another platform that will help boost accessibility?

Will there be any hardware changes? What type of content can move the masses as ‘serial’ did? Once you fully understand the past and present, you will then get the answers about the future.

The Podcast Ecosystem is Larger Than You Think

One of the world’s best and leading VCs, Andreessen Horowitz, recently released their 2019 podcast ecosystem report. The report is full of nuggets and details about the podcast industry.

Podcast Consumption is Rapidly Growing

Apple Accelerated Podcast Consumption on Mobile Devices

Macro Trends Around Smart Speakers and Connected Devices within the Car Could Accelerate Growth Even Further

Apple Podcast Market Share has Decreased from 80% to 63% in the Past Few Years

Spotify is now Second Largest Podcast App and Has Doubled Market Share in the Last Year to 9%

There are Five Types of Podcast Publishers

Podcast Hosting is Extremely Fragmented

Podcast Ad Revenue is Growing

Today, Podcast Monetization is Through Direct Response and Host Read Advertising (Not Scalable)

Significant Startup Exits Over Last 5 Years

Podcast Investments have Exploded

How to get Your Content on Voice Search

A new study by SEMRush did an analysis of what it takes to get your content on smart device voice search. They analyzed over 50,000 queries in order to determine what the qualities of the the content should be to show on these devices.

Photo by Sebastian Scholz on Unsplash

The Bottom Line in Showing in Voice Search

From their study, they found that content is more likely to be returned for a voice query if it ranks in the top 3 web search positions within Google.

The Key Findings

There were several key findings that were either consistent across the three devices, or that clearly defined the differences between using voice search through a speaker and using voice search through an Android smartphone.

Below are the key findings from the research:

  1. Close to 80% of the answers returned were from the top three organic results (for Android Phones, 72%)
  2. 70% of all answers returned from voice searches occupied a SERP feature (with 60% of those returning a Featured Snippet result)
  3. When analyzing backlinks, Page Score and Trust Score were slightly higher for answers’ URLs regardless of the device.
  4. Backlink anchors and keywords within a title matching the voice search query are present in over half of answer URLs for Google Home and Home Mini.
  5. Text length of the answers returned was nearly the same for every device (around 41 words on average).
  6. Text complexity needs to be simple and understandable for the average reader (ranking around 8 on the Flesch Kincaid Grade.
  7. Pagespeed is very important for all devices — for a majority of questions, the answer chosen by Google loads faster than the average page speed for all other results in the same SERP.
  8. Well-linked pages (internally and externally) are favored within Google Home and Home Mini searches.
  9. Over a third of the answers do not use schema. Different schemas are used, with Article and Organization being the most popular, with low percentages. In non-answers, the use of schema is more prominent, but still no single type dominates.
  10. HTTPS and URL depth seem to be irrelevant for Google Assistant’s selection (because there was no tangible variance between answers and non-answers).

How to Find Market Size Podcast and New Business Research on The Fly

Google is the ultimate search tool, ask it the below questions and you will have enough market research information to determine the size and growth of your target market for your podcast within 10 minutes.

Many successful, scalable and resourceful businesses focus on niche markets. For example if you are building an online dating app for farmers, don’t ask how large the dating farmer market is but rather ask questions like how large is the online dating market within the US and then ask how many farmers are within the US? What is the broadband penetration for farmers within the US? Etc. Before farmersonly.com launched, there was no market size dating data on this highly profitable and niche farmers market. Farmersonly.com, now has over 5 million farmers visit the website each month.

Below is a quick and easy way to find the market size of any market to determine whether or not it makes sense to either start a podcast or a business within it.

Photo by Paweł Czerwiński on Unsplash

How to Find Market Size Research on The Fly

If you can’t find answers to the below questions or they are not within the top 10 results, your market is not large enough. Below are 5 template focus questions to get you started as well as broader set of questions if these questions don’t quite fit your model. Feel free to add your own variations as you see fit to get additional market data.

1 — How many [your customer persona]s are there in [location]?

Example: How many high school athletes are there in the United States?

Answer: [first result] According to NCAA, there are 8 Million high school students athletes within the US and 480,000 of them will compete at NCAA schools.

2 — What is the growth rate of [your customer persona]s within the [location]?

Example: What is the growth rate of high school athletes within the US?

Answer: [first result] According to NFHS.org, participation in high schools sports has increased for the 27th consecutive year and increased 62,000 from last year.

3 — How much money is spent within [your industry] in [location] each year?

Example: How much money is spent within high schools sports in the US each year?

Answer: [third result] According to research done by Ohio University, over $5B was spent last year on interscholastic sports.

4 — What companies offer [customer persona] [services, apps, products] to [enter various needs]

Example: What companies offer high school student athletes apps to increase performance?

Answer: [first, second, & third result] Volt Athletics, Private Trainers, RackPerformance all offer mobile apps to help improve the athletes performance.

5 — What [services, apps, products] do [customer persona] use to [save time, improve, save money, be more productive, etc]?

Example: What apps do high school athletes use to improve?

Answer: [first result] There are numerous mobile apps to help both athletes and coaches improve. These include but are not limited to CoachUp, Hudl, iPracticeBuilder, StatRow, Coach’s Eye, BAND, Sportlyzer, TrainingPeaks, GameChanger, MyFitnessPal, Endomondo Sports Tracker, and many sport specific apps.

For additional questions you can customize yours according to these broader examples:

1- Are there similar businesses within your market that are selling similar products or services? Who are they?

2- How do these businesses appear to be doing? Did the raise significant amounts of money? How are their service reviews? How is the press? Are the growing or shrinking?

3- What are these businesses doing well? Content? Marketing? Product? Sales?

4- What are these businesses doing poorly?

5- How you think about these competitors, what could you do differently to distinguish your company from theirs. What will be your value proposition?

6- What type of barriers or moats do you think these competitors have? Will it be hard for your new product to penetrate this market?

7- If yes, are there ways that you can alter your business plan to suit a niche market?

8- What is the market size for your customer persona? How many of your customers currently pay for similar services?

This high level market research does a few things. One, it helps you focus on whether or not the market is large enough and it also gets you familiar with the various products and competitors that are already in the market. You will have to spend more time diving deeper into the competitive landscape but this is a great first start.