Thursday, June 28, 2012

Session 12

I'm hoping to provide some final inspiration to you all with these video interviews with two of the most successful entrepreneurs around Stanford, Andy Bechtolsheim and David Cheriton. You may have already seen the video with Bechtolsheim but this is the first release of the David Cheriton video. In it, he talks about what motivates him to get involved in entrepreneurship, how to think about when to start a company, and provides some advice for aspiring entrepreneurs. David and Andy also told me about writing the first check out to Google, Inc. David goes into some detail on technology, but the startup insights are very generalizable to many types of businesses. Andy stays as a higher level and talks more from the business perspective. They're both super interesting and really good people as well. I hope you enjoy these videos!

Session 12

First time here? 

  1. See the class description and frequently asked questions. 
  2. The course operates according to the flipped class, where team-based, experiential education (learning by doing) is central and video lectures and readings are there for support.
  3. If you'd like, form a team and follow along at http://venture-lab.org, like us on facebook and join the group, or follow the Google+ page.
  4. Start with the intro and course overview videos.
  5. For Chinese viewers the videos are also on YouKu (http://u.youku.com/eesley)
  6. See what some of the teams did for the last assignment and the description of the next assignment.
  7. View the videos for Sessions 1-3 to catch up here.

Small Business Tips For Running A Direct Mail Marketing Campaign

Although direct mail marketing in the age of the internet is less productive than it used to be ... there are still times when such an approach can be productive for small business. That said ... here's a few tips for those small businesses using this approach ....

* Get a good mailing list. You can buy lists, but by the time you get it they're usually old and stale. Rather invest time in list building - using google, yellow pages, linked in and networking. Yes it takes longer but you can target your list better.

* You need a name. Any letter addressed to the Managing Director and starting "Dear Sir" will go straight into the bin at reception and not make it as far as the target executive's desk.

* A well crafted and presented letter. If you are going to spend out on direct mail then don't waste your money by having a bad letter. If you can't afford a copywriter, get someone with an English degree to proof read it. Get your staff and partners to read it and comment on it. Think short sentances, short words, no Jargon and interesting for the reader. It should have a hook that engages the readers attention. and write something that is simple, dont use jargon. Read it out loud to yourself and check it makes sense. Maybe use a graphic designer, definitely use good quality headed paper or glossy paper if its a leaflet.

* Follow up. If you can follow up your letter with a phone call then do. If you can follow up by meeting them at a networking event then do that.

* Persistance. You might need to send as many as 7 or 8 letters - different letters! Before you get a result. But each letter needs to be of interest, so send newsletters, special offers, top tips, special invitations, etc.

* Patience. There isn't a silver bullet or magic wand that will make your marketing work. Expect your marketing campaign to take 6 months to show results.

Feel free to comment on the tips as presented ... or contribute your own.
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Monday, June 25, 2012

Balancing Investment Goals vs. Constraints


In our previous blog, your new business is successfully off the ground. Sales, profits and cashflow are growing. You are reinvesting in your business to support future growth. You have decided to invest some of your cash outside of your successful business, diversifying your family’s wealth.

This process can be viewed as “opportunity management” because its goal is to maximize your positive alternatives if your company experiences a serious challenge.

Your investment possibilities are almost limitless. I suggest judging each one against your goals and constraints. Draw up a list of your goals and constraints, change them as your experience and learning grows. Decide on what you want because you know what is best for you and your family.

Goals
Constraints
Return
Safety
Liquidity
Expected investment term
Unrelated to current business
Personal time involvement
Taxes
Limited investment funds

Return vs. Safety
Your successful business should be generating your highest return on investment (ROI) because it is your operating business. It can be 15% to 50%, depending on its age and size. This investment’s expected ROI is lower because its goal is to add a safety element to your investment holdings.

Safety should be a primary concern. What is the point of this exercise if the investment is lost?

Liquidity
Some investments (CDs, stocks and bonds) can be sold and converted to cash in a matter of days, while others (real estate) can take months to market and sell. Having liquid assets on hand for unexpected expenses is recommended. If this has been met, investments that are illiquid can make sense.

Expected investment term
Matching your time frame with an investment’s expected term is crucial to a positive experience. Real estate investments may require 5 to 20 years to reach full maturity. Stock and bond portfolios should be allowed to experience a full economic cycle, 5 to 10 years.

Unrelated to current business
The investment should not be correlated to your current business. If your business declines, hopefully this investment will be growing.

Personal time involvement
Your time is your most precious commodity; your new business succeeded because you added the value. How much of your time will the new investment require? If it is substantial, will it impact your current business?

Taxes
IRAs and taxable accounts impact tax efficiency. IRAs and other tax deferred accounts lend themselves to capital appreciation opportunities. Tax-exempt investments may be ideal for taxable accounts.

Limited investment funds
Investment offerings may have high minimum investment amounts. Consider the planned investment amount against your net worth. You may not want a large percentage of your net worth in any one investment, aside from your first business.

Conclusion
Many issues should be considered before any investment decision. Ask your investment adviser to help you look at the issues related to each investment. Have him/her to describe the conditions in which the investment can do well and the conditions in which they might fail.

This investment’s purpose is to benefit you and your family. Knowing its possible profit and loss conditions can help you make a better investment decision.

We have not covered all possible viewpoints. We invite you to comment and add to the discussion.

Next
We’ll discuss possible investment alternatives and their pros and cons.
Location: Brea, CA, USA
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