Rapid Innovation Group blog

How a flea can move an elephant

One entrepreneur recently described his revenue-generation challenge like this: "I need to get a flea to influence an elephant."

He had recently entered into partnership discussions with a potential reseller, through which he would be able to access a large market of potential customers. However, going indirectly via the reseller to these potential customers forfeits a significant amount of control over the process when compared to selling directly. Simply put, you're relying on individuals outside of your organisation to make things happen for you.

Generating impetus for your product or service within another, much larger organisation might seem like trying to get a flea to move an elephant. At a very high level it requires two things to be true:

1. There are sufficient drivers for the organisation to act now; and
2. There are sufficient drivers for each relevant individual in the organisation to act now.

On point (1), the elephant's executive team (its head?) must believe wholeheartedly that partnering with you has a significant and immediate impact on its overall strategy. Following on from an earlier post (what's in it for the partner?) you have to work this out in terms that make sense to them. To continue the analogy, the flea must enable the elephant to compete better with other elephants.

On point (2), the elephant's operational team (its legs?) must all have individual incentives to support your organisation. If the partner's salesman gets a bigger bonus for selling his own products rather than yours then you are unlikely to get the elephant walking in a straight line in your direction.

Ensure that these two points are in place and your flea might become the most important part of the elephant's armour.

Networking: where do I start?

Despite the fact we live in a ‘global world’ it never fails to surprise me how localised various industries seem to remain. Indeed, the old adage, “it’s not what you know; it’s who you know” seems to remain a significant component of doing business in the 21^st century. And it is with some modicum of frustration that I note that this challenge – of knowing the ‘right’ people - seemingly exists regardless of the compelling nature of your solution.

To clarify, I am not suggesting that a business will not be successful without actively ‘networking’ but rather that networking itself, or more importantly monetising those networks, remains a key component of business.

It was with this in mind, and with aspirations to replicate the success of Debra Meaden, that I began my ‘networking career’ back in July 2010 - beginning from a standing start my objective was two-fold:

1. To identify appropriate  networking groups, forums and events through which to network into my target sectors and with key decision makers
2. To gain access to these key decision makers on behalf of my client

Challenge 1, which I somewhat naively thought would be easily solved through a few hours of internet research was in reality rather more challenging.  Although a plethora of networking groups, forums and events exist identifying the right ones and subsequently maximising my time was a key consideration.  With this in mind I set out to find groups which met my 4 criteria below:

1. They needed to be industry specific
2. They needed to be attended by key decision makers
3. They needed to be free or of minimal cost
4. They needed to be easy for me to access

What I hadn’t allowed for in this criteria however was that the group itself need to accept or preferably welcome industry outsiders.  Indeed, as I quickly found out a significant number of groups were not keen to admit people who they saw as targeting their members with the eventual aim of selling to them – in retrospect hardly surprising.

As a result, this process was much like internet dating, involving some rejection, a little flirting to establish the relevance of each party to the other and an eventual agreement that ‘we were well suited’.

Eventually, after over a month of searching I joined two very different networking groups, one in each of my target industries.

To be continued....

Change your vocabulary to win bigger deals

Vocabulary and analogies are important when explaining your product or service to a potential buyer.

CRM Market Analyst, Lauren Carlson argues here that marketing automation firms, Marketo and Eloqua have adopted the term Revenue Performance Management (RPM) primarily in order to "get above the noise of a crowded marketing automation market" and to "gain the attention of C-level executives."

Responses to the blog in the comments section vary in tone from evangelical ("RPM really is about transformation; it’s a business strategy that requires an alignment of resources, processes and technology" - from Eloqua's Director of Product Marketing) to sceptical ("RPM is just a hollow term that was invented by two vendors in an attempt to make their value propositions seem more 'strategic' in nature").

But there is no shame at all in couching your proposition in vocabulary that makes sense to your buyer. If your product or service is for everyday consumers then avoid technical language. For instance, as Venture Hacks' Naval Ravikant recounts in this excellent video on preparing for fund-raising, the proposition for Gmail was to create "a web-mail system that didn't suck."

Similarly, if your buyer is a C-level executive then you should explain how it is relevant to her in terms such as risk and competitive advantage. If your product or service does not have any impact on these sorts of issues then you should avoid setting pricing levels that require an executive-level conversation.

If Revenue Performance Management means anything beyond the familiar ideas around marketing automation and Customer Relationship Management then I suggest that it should be a methodology for an executive-level Chief Revenue Officer, whose responsibility is to optimise the revenue generated through a mix of direct or inside sales and channel partners or licensees.

This role requires an understanding of the science of revenue generation, which involves many moving parts (marketing, sales, partner management, PR, etc.). The analysis and reporting of these moving parts are complex matters and I can envisage a valuable role for automation here.

Choose your competitors

If you want to appear tall, stand next to someone shorter than you.

Choosing who to compete against can be just as important as choosing who to sell to. Below are three areas highlighting why this is the case:

1. Positioning against a judicious choice of competing solutions / processes is the most meaningful way to explain to a potential customer exactly what it is you do and how you do it better than alternatives. Every purchaser makes his/her choice based upon comparisons; it is in your best interest to provide them with those comparisons. It enables your prospect to define to themselves what it is you do and how you do it – this is absolutely something you should control.

2. Shortening your sales cycle through market education. When customers buy a solution, they can be considered to have gone through a learning journey regarding their needs. Monica Nicou et al break the steps down in their book ‘Sell Your Knowledge’:

• No awareness of need
• Senses threat / possibility
• Observes insufficiency
• Makes a diagnosis / identifies a need
• Expresses demand

Imagine your favourite pair of jeans – you are going to reject a salesman’s offer to sell you a new pair because as far as you are concerned, you don’t need any. Now imagine your wife tells you she hates the jeans. You sense a threat – there could be trouble unless you sharpen up your act. You notice that your jeans are ripped – you’ve put your finger on the insufficiency. You make your diagnosis and identify a pair that satisfies requirements.

In the same way, selling to a company that has made a diagnosis will be a far quicker (and cheaper) process than selling to companies with a less developed understanding of their needs. When entering a new market, if you choose one with the right competitor that has begun the ‘educational’ process with its marketing efforts, you are likely to be faced with a much shorter sales cycle.

3. Creating a compelling argument. One of our clients had beaten a competitor at every pitch they had gone head to head with them on. Relaying this information on at subsequent pitches against this competitor subsequently turned out to be the most effective way to win the business.

Is it too daunting for a graduate to become an entrepreneur?

I attended Editorial Intelligence's excellent Comment Conference yesterday on the topics of The Enterprise Economy, Women in Enterprise, and Entrepreneurship.

Panelists and speakers all agreed that successful and sustained entrepreneurship is a necessary requirement for the UK economy to start growing again. The Minister of State for Universities and Science, Rt. Hon. David Willetts MP reeled off some interesting averages on the state of entrepreneurship in the UK:

• Each year 6% of the UK's workforce starts a business
• Male entrepreneurs start their first business in their late-20s
• Female entrepreneurs start their first business in their mid-30s
• 61% of business owners are aged under 50

The Minister declared his passion for helping young people in particular to become entrepreneurs by investing in more apprenticeship schemes and promoting educational programmes such as Enterprise UK's Make Your Mark with a Tenner.

But the overwhelming opportunity for the UK to find new entrepreneurs seems to me to be in the elder generations.

According to Martin Bright, the most important determinant of whether young people start their own business is access to capital. Those without a hefty inheritance are significantly less likely to become an entrepreneur. Derek Wyatt made the point that the UK's Financial Services Authority prevents the type of micro-financing that has enabled so many young entrepreneurs in India to get their first small cash injection.

With graduate recruitment still subdued in the UK, more and more young people are already feeling down about being unable to get a job - and entrepreneurship has a reputation as a career path with a high probability of failure. It is difficult enough for those at the very beginning of their careers to appreciate and to articulate what skills and strengths they have - at RIG we find this during our graduate recruitment process - and if you want to bet on yourself to create a successful company then understanding your strengths and weaknesses has to be one of the first steps.

On the other hand, Donald Steel pointed out that the high redundancy rates in the UK, particularly in the public sector, are effectively creating an enterprise fund for experienced professionals. He went on to say that the public sector and large corporates should do more to promote entrepreneurship with staff that they are making redundant.

Inmaculada Martinez summed up what compelled her to start her own business as "the fear that someone else would invent 'my' technology before me." There are certainly people who can envisage an entrepreneurial venture before having been exposed to business life, but I would imagine that more successful ideas would come from those that have spent some time in an industry already.