Entrepreneur Magazine

Yesterday someone told me that Entrepeneur Magazine published an
article in the July issue on social networking. The author interviewed
me a few weeks ago about how I use LinkedIn.com, and how I require
people who want free business mentoring from me to use LinkedIn.com
before I start giving them advice.

Here is the Entrepreneur Magazine article.

Here is an interesting response from a blogger in India who disagrees with my opinion about LinkedIn.com.

This author talks about OpenBC,
the European social networking site that has more than 500,000 members
and covers a lot of languages. I’m definitely going to check out OpenBC. It has an interesting 2-year Alexa chart.

LogoWorks Scores Venture Funding

Congratulations to the folks at LogoWorks who have received $9.3 million in venture funding from Benchmark Capital (one of the very best VC firms I know of) and Shasta Ventures–both based in Silicon Valley.

(If you want a ton of insights into Benchmark, read eBoys, an amazing insider view of the “six tall men who backed eBay and other billion-dollar startups.” It’s a great read.)

LogoWorks has one of the best internet business models I have ever
seen. (A large pool of freelance designers work when they want to;
clients request logo design; multiple logo designs are submitted; the
client chooses the one they like best; winning designer gets paid most,
but all get paid something; over time, poor designers get weeded out.
This is all nicely automated.) They are doing some very clever marketing,
have been hiring great people, are profitable, and have the ability to
take their business model into many different vertical markets, beyond
just logo design.

It’s very exciting to have another Utah company with such tremendous growth prospects.

Never Miss a Chance to Test Online Ad Copy

I really like Google Adwords.

Several hundred thousand companies now bid on keywords using Google AdWords.

A recent interface change makes it easier to select additional keywords. A previous change made it possible to change the maximum bid for each keyword individually.

I like what Google is providing for advertisers.

But there may be a feature that relatively few advertisers take advantage of. That is the ability to have multiple ads for each set of keywords. Google will randomly rotate your ad copy and keep track of the best performing ad. Over time, they run the good ad more than the poor ad.

Every time you create an Ad Group, you must create more than one ad. Test a different title, or different ad copy, or even a different URL.

Classic direct marketers know that you live and die on testing. Direct mail campaigns costing millions of dollars can deliver optimal results if smaller test mailings are done previously, with tests for offer, price, headline, envelope design, etc.

But online marketers sometimes are lazy compared to the disciplined direct marketers of the past. Everything is so easy, and so inexpensive, and so fast for us, that we sometimes don’t have the discipline we should.

Imagine that through testing on Google you learn something every week that will improve the results of your marketing. Imagine what this will mean to your business over a long period of time to know the keywords and the ad copy and the URLs and the landing page designs that will generate the highest click throughs and conversions for you.

A difference of .3% or .5% on your click through rate doesn’t seem like much, but over a year, it might mean the difference between losing money and being profitable.

Little things over a long period of time really add up and really make a difference. For example:

  • A penny, invested at 12% annually for 180 years turns into $10 million.
  • If you gain an ounce a week every week from the time you are 20 to the time you turn 40, you will have put on 40 extra pounds.
  • A new employee with a $20,000 salary may cost your company $3 million in salary, benefits, and overhead costs over his/her entire career. I learned to think this way by reading the 2004 Annual Berkshire Hathaway Report by Warren Buffett (page 8).

A slight increase in click rate, or a slight increase in conversion rate, multiplied by the lifetime value of a customer, can turn into many thousands or millions of dollars.

Never miss a chance to test your ad copy, or anything else for that matter. It will pay off big time.

How to Get Smart Fast

Too many entrepreneurs try to do it alone.

But it’s easy to work together with a group of entrepreneurs that helps everyone succeed. That is what YEO and other organizations like it are all about. There are many examples of this in history.

In 1727 Benjamin Franklin and 12 friends formed a group which he called Junto, where they discussed the topics of the day for their mutual improvement. For decades these individuals helped each other succeed and make contributions to society.

Napolean Hill, author of Think and Grow Rich, wrote about Mastermind groups which he learned from Andrew Carnegie.

Authors Mark Victor Hansen and Robert Allen advocate building a Dream Team, a group of people who can guide you and help you achieve your goals.

Yesterday I held my first Brainstorm Meeting for entrepreneurs in Utah County. We met at Magelby’s for lunch. There were about a dozen of us.

After introductions I asked everyone to tell us what the biggest problem facing their business is right now. Then everyone pitched in freely with ideas and suggestions about how to solve their problem.

One person volunteered to take notes and captured dozens of excellent comments and ideas, web sites and marketing tactics, that could be very helpful.

We pooled our knowledge and all came away richer.

I think there is power in groups discussing problems and possible solutions, especially when everyone shares their ideas and knowledge freely.

If you are an entrepreneur, you should join or form such a group in your area.

If you want to attend our next Utah County Brainstorm meeting, email kateygreat “at” gmail.com.

Powering Businesses with Float

I never had much interest in banking or insurance until reading The
Warren Buffett Way last year and realizing how Buffett made his fortune
by investing the “float” from his insurance companies. Now I think
about this concept all the time and wonder how it might be applied to
my internet companies.

From the 2004 Berkshire Hathaway Annual report:

“… Berkshire has access to two
low-cost, non-perilous sources of leverage that allow us to safely own
far more assets than our equity capital alone would permit: deferred
taxes and “float”, the funds of others that our insurance business
holds because it receives premiums before needing to pay out losses.
Both of these funding sources have grown rapidly and now total about
$55 billion.

“Better yet, this funding to date has often been cost-free. Deferred
tax liabilities bear no interest. And as long as we can break even in
our insurance underwriting the cost of the float developed from that
operation is zero. Neither item, of course, is equity; these are real
liabilities. But they are liabilities without covenants or dates
attached to them. In effect, they give us the benefit of debt — an ability to have more assets working for us — but saddle us with none of its drawbacks.”

I have a friend who ranks in the top 5 on major search engines for
insurance related terms. I figure that if I ever establish an online
insurance company, that he’ll be my partner in generating major traffic
to my site. The big question I need to answer before going down this
path is: what regulations govern how insurance funds — the float –
can be invested? I know government regulations would likely not permit
any high-risk investments. But how did Buffett do what he did? I
suppose he bought companies with high book value, so the investments
seemed safe because the companies owned physical assets. I don’t know.
I’m sure you can’t fund high-risk startups with insurance float.

Another options might be industrial banks, which exist in six states,
including Utah. Again, regulations would not permit a high-risk use of
these funds. But I recently read a great article (Wired magazine I
think) about a taxi company that set up an Industrial Bank in Utah
(instead of borrowing money from other banks) and in a couple of years
it was able to greatly increase its net profits because it was able to
finance its own growth.

I’ll keep noodling on this concept. All start up companies need some
cash. And I’m thinking there ought to be a way to fund them using
float, without violating government regulations. (I wonder if
regulations permit say 5% of float to be invested in high risk
investments, as long as the portfolio overall is 95% safe???)

Any ideas from all the brilliant readers out there?

MarketingSherpa Disappoints?

I’ve never met a bigger fan of MarketingSherpa
than myself. I’ve read hundreds of their case studies, attended their
conferences, and purchased many reports. But the latest report on Landing Page Design
(which I’ve merely glanced through while two of my marketing guys are
reading it cover to cover) may be the first product I’ve ever been
disappointed by.

The reason is this: I’m a huge fan of the ClickMap feature of
SiteCatalyst. In fact, years before they added Click Map to their
product, our VP Development at MyFamily.com built a feature I requested
into MyFamily.com that we called “Visual Next Click Reporting”. It was
basically the same thing. All our right brained web designers and
copywriters who never looked at stats from our web analytics and
reporting tools (which left brained people love) could login and see next to every link on the page how many people clicked on it the day before.

In other words, we brought the analytics to them and integrated them
into the user interface. I remember showing this in our board meeting
and thinking this was on of the coolest things our company had ever
done.

No longer could people use their subjective opinions to say “I like
this design better than that design.” Anyone could see which design
worked better, based on the integrated analytics.

So I’m spoiled by expecting data to be overlaid on top of screen shots.
When I think about increasing the conversion rate of web pages, I think
of isolating changes, making the changes one at a time, and then
measure the before-and-after click percentages on each screen shot.

What I saw in the MarketingSherpa report was simply the old landing
page design and the new landing page design, with very little data on
why the new design was better. There are a few stats in the copy
explaining that the new design worked better. But I was really hoping
for something that would show a series of changes, and have rich data
about the click through percentages on each one, until the company
arrived at the very best performing landing page of all.

So my own experience with measuring landing page conversion rates and
testing new ideas was far richer than what I found the $247 report,
which I was hoping would teach me a thing or two.

Once my marketing guys have finished reading it, I’ll ask them if they
think it was worth the price, and then let you know later.

I am still a major fan of MarketingSherpa and tell every marketer I
know they are foolish not to subscribe to everything they possibly can.
This is my first and hopefully last disappointment from the best
publishing company in the world for internet marketers.

Great Article: Hiring is Obsolete

Thanks to Eliot Jacobsen for sending me the link to the Paul Graham article on why 20 year olds should seriously think about starting their own company.
Paul shares the most exciting thoughts I’ve ever read about
disintermediating employers–let the young technologists figure out
what the customers want and build it–and not go to work for a big
company that doesn’t listen to customers very well and doesn’t create
products very well anyway. Highly recommended! (And just in time for me
to share these ideas with dozens of young students at the UVSC
Enterpreneurship Camp next week.)

LDS PDA Products

Infobase Media Corp (one of our portfolio companies) has introduced its LDS PDA Library (in partnership with Deseret Book), which comes with hundreds of books that are ready for your Palm or Pocket PC. But more importantly, it works with the 2005 LDS Collectors Library so that you can save any of the 3,300 religious titles in that library — or portions of them — to your handheld.

As a RIM Blackberry addict, I keep suggesting a Blackberry version, and I know the company is exploring it. (Especially since Blackberrys outsell Palms these days.)

Has anyone out there used the Blackberry SDK? If so, any tips on getting started?

Does God Help Entrepreneurs?

Someday I want to write an entire book on this subject.

It fascinates me to look back in history, to read the biographies and autobiographies of inventors and entrepreneurs, looking for acknowledgment of divine influence in their work.

Over the years I have read and heard many stories from innovators who believe that God gave them an idea, or helped them through a problem, or guided their efforts to find solutions.

Some entrepreneurs are actively religious, attending churches, synagogues, or mosques; others are “spiritual”, connecting with Divinity in their own way, through prayer, nature, or meditation, or in other ways.

I intend to start asking many of my entrepreneurial friends, with all kinds of religious views, if they believe God has helped them, and if so, why and how? If I get enough good material, I’ll publish it sooner or later.

Here are some of the seeds for this idea:

  • I met the inventor of “electronic greeting cards” in 2000 at a Jupiter conference in Napa, California. We had a great discussion about this topic. She knew that her invention was a gift to her from God. We talked about collaborating on a book someday about prayer in business.
  • I know two CEO in Utah, two of the best in the state, who won’t work on Saturday (for family reasons) or on Sunday (for religious reasons). (Sunday is the Sabbath Day for many Christians.)
  • Gucharan Das, author of India Unbound, one of the five best books I have read in the past few years describes how India’s traditional spirituality is being combined with the “rationality and technology of the West” with marvelous results. He talks of temples and meditation and knowledge of God. He describes in one section how two south Indian temple priests have started a software company, showing that traditional spiritual values and modern technology can co-exist.
  • I have a Jewish friend — a brilliant entrepreneur — who has devoted some of his wealth to publishing sacred Jewish texts online in an effort to promote something he considers to be extremely important.
  • Years ago my father told me about a Chicago man who literally dreamed the solution to a postal sorting machine–he woke up one day with all the blueprints in his mind as he had seen how the device would work while he slept. He told my father that he got the patent for the machine, but that God was the inventor of it.
  • A religous leader who was formerly a highly respected heart surgeon describes how he saw in vision, as it were, a new way to do a surgical procedure, which is now standard practice. (I would have linked to the talk on LDS.org but I couldn’t figure out how to do it. Here is the talk, The Sweet Power of Prayer, published on another site.)
  • A friend in Hong Kong recently prayed for divine help about how to approach a business meeting and as he got up he his computer alerted him to a new email, which contained exactly the information he needed. The email wasn’t send by God :) but it was sent by a friend who had been working on the email message for much of the day.

How does this apply to you? Have you ever sought for God’s help in your business? If so, with what motive? Do you pray often, do you meditate, do you read scriptures in order to bring your heart and mind into harmony with Divinity?

Mark Victor Hansen, whose Chicken Soup for the Soul series has sold nearly 100 million copies, and Robert Allen, the most successful real estate author in history, teamed up a few years back to publish the book “One Minute Millionaire.”

The authors discuss the importance of tithing–giving 10% of your income to charities and/or churches. Their list of successful people who tithe includes John D. Rockefeller, Andrew Carnegie, Opray Winfrey, and Sir John Marks Templeton. Templeton said, “Tithing always gives the greatest return on your investment.” The authors claim that behind the most successful people is an attitude of giving and sharing. A willingness to help others (which can definitely grow within you as you pursue spirituality in business) unlocks the help of the Universe in your life.

I don’t believe, as some authors (including Paul Zane Pilzer, whom I have met, and whom I highly respect as a very religious economist) have claimed, that “God Wants You to Be Rich”, unless they are referring to the “riches of eternity,” which God wants to give to everyone. I think we often learn more importantly lessons in life from adversity and poverty than we do in prosperity.

I’ve said before that blogging is just about the most important business activity that I do everyday because it puts me in regular contact with both friends and strangers and the dialogue and relationships that result from blogging make me smarter and better connected.

But I honestly believe that the single most important business activity that I do every day is to have a personal spiritual devotional, where I seek to be in harmony with God through reading His Word, praying and pondering.

This does not guarantee that I won’t make mistakes, that I’ll be blessed somehow without hard work and effort, that I’ll beat my competition (who may also be seeking help from God). That’s not my point. My point is that a daily devotional brings peace of mind (something we really need in our fast-paced world), occasional moments of enlightenment (the Eureka moments sought by inventors), and helps me to love people and view them as human beings in the Tim Sanders’ Love-is-the-Killer-App way.

I think a dose of humility and gratitude, both of which can come studying holy books and praying to the Creator, would help any entrepreneur be more successful in life, if not in business.