Thursday, February 16, 2017
We are trying to improve upon Red Rocket's product offering, and we need the input of our use...
We are trying to improve upon Red Rocket's product offering, and we need the input of our users. Please read to the end of this post, to better understand our history and desires, and let us know your thoughts. Much appreciated!!
HOW RED ROCKET GOT STARTED
Red Rocket was founded in 2010 after George Deeb sold his last company, MediaRecall, where he was CEO. The intent was to see what interesting companies called looking for help, for George to find a good one to invest in and become CEO again. The intent was never to build a business. But, as George began writing this blog in 2011, traffic started to grow with the inbound traffic from Google, now approaching 1,000,000 reads over the last six years (which we are proud of--as many entrepreneurs are finding the content really helpful to growing their businesses).
In Red Rocket's early days, the positioning was all around being a "startup consultant". That got the phones ringing for sure, with 100-200 companies calling a year. But, in terms of quality, the leads were pretty low-quality--only 10% of the companies calling had an interesting business, team or idea that were "venture ready for prime-time". They were mostly starving startups who couldn't afford cash consulting services and weren't exciting enough for us to want to work for equity.
THE EXPERIMENT WITH ENSEMBLE
So, if startups were only willing to pay cash for certain expenses (e.g., technology development, digital marketing), we thought we would create a solution which bundled a package of those services together into one-stop shop for startups. Red Rocket and four other specialist agencies in Chicago launched Ensemble in 2013 to do exactly that, bringing an innovative "startup excubator" model to market. This "digital services suite" included startup strategy, fund raising, web development, public relations, search marketing and social media marketing, powered by an all-star team of expert agencies in each of those fields. Everything a "do-it-for-me entrepreneur" would need to succeed in one phone call.
The reaction was very positive, as we had a lot of publicity and 100 calls in our first month. There was clear demand. But, again, the problem was the startups didn't have any cash to work with. And, even with us offering a 40% discount on the bundled service, that wasn't good enough. Startups wanted to pay us zero dollars, and instead, give us a big equity stake in their business. But, that model didn't work for the partners of Ensemble, who had lots of employees to pay. And, we didn't want to raise a venture fund to give the startups the capital they needed to afford the services. So, Ensemble got shelved and put on the back burner.
REPOSITIONING AND PRODUCTIZATION
The next effort we made was to de-emphasize startup related services, to try and attract more later stage businesses with capital to spend. We took most of the "startup consulting" words off the website, and replaced it with "growth consulting" (for companies of all sizes). Our tagline changed from "venture consulting and capital" to "growth strategy, team and capital". And, we created a one-stop shop for growth--(i) growth strategy; (ii) growth execution from outsourced CMOs; and (iii) access to growth capital through partner VC and PE firms. We also added in other services like business coaching, M&A advisory and corporate innovation, trying to throw out a wider net of products, appealing to bigger companies.
That certainly helped. The volume of leads from zero revenue startups materially declined, and we started to get more calls from more later stage companies in the $5-$20MM revenue range, which typically were large enough to afford paid services. But, it didn't knock our doors down. And, of the three legged stool of services we offer, fund raising was still the largest driver of leads. And, frankly, fundraising is the most mundane aspect of our business, and we only like to do it when we think it is a "layup" to getting to the finish line, which isn't all that often. We would much rather focus on the strategy and marketing execution work, which were like needles in the haystack of leads coming in. And, even with paid Google marketing support, the phones were not calling as much as we wanted.
WHERE WE NEED YOUR HELP
Following our own advice, we need a fresh set of eyes to help us assess our offering from a buyer's perspective. Are Red Rocket's services even ones you want? What services should we be offering that we are not offering today, preferably from a recurring revenue perspective over time? As an example, a one-off consulting project (e.g., a business plan), is less exciting than a long-term service you need (e.g., an outsourced CMO or business coach to help you grow you business over the years). The outsourced or part-time CFO companies seems to prosper pretty well, but we are surprised the demand for outsourced or part-time CMOs hasn't caught on, in comparison, given how important sales and marketing is to driving revenues. And, what would you be willing to pay for any of the services you are recommending?
We have invested hundreds of hours of work into maintaining the Red Rocket blog, giving the content away for free, as our contribution to the entrepreneurial ecosystem. But, we need to figure out how to scale the business with a winning product offering and revenue model. Especially, since we don't think putting up a subscription-based pay wall in front of the blog content is the right thing to do.
So, to all of you loyal Red Rocket users that have benefited from our free how-to lessons over the years, now it is your turn to advise us. Why are you not buying our current services from us? What products or services do you think we should offer, that we are not offering today? Do you know any later stage companies that can benefit from our current service offering, and are you willing to make introductions for us? Depending on the answers we get here, we are also looking for interesting growth-stage companies to buy (over $500K in profits) to get more deeply involved with long-term management--is that something worth talking about together, either for your business or others you know?
Anyway, thanks for putting your thinking caps on, and providing us your feedback in the comments section below. Or, if you prefer to privately send them, use the email contact form at the the bottom of this page. Much appreciated!!
For future posts, please follow Red Rocket on Twitter at: @RedRocketVC.
Tuesday, February 14, 2017
I recently read a great book called The 9 Types of Leadership , written by Beatrice Chestnut ,...
I recently read a great book called The 9 Types of Leadership, written by Beatrice Chestnut ,a licensed psychotherapist, executive coach, and business consultant, and an authority on the topic of leadership. Beatrice was kind enough to let me share a summary of the nine types of leadership styles with you below. After you are done reading this list, figure out what type of leader you are, and what strengths and weaknesses that brings to your business. I can see elements of each of these nine types in my leadership style, so it is not necessarily "one size fits all". But, if I was forced to pick only one, I am a Type Seven.
According to the Enneagram System of Personality, a typology akin to the Myers-Briggs Type Indicator but more textured and multi-dimensional, there are actually nine styles of leadership. Understanding the strengths and blind spots of the nine types of leaders can improve the effectiveness of the leadership within an organization by helping individual leaders become more aware of their gifts and weaknesses—or opportunities for development. The following is a description of the nine types of leaders in terms of their core characteristics, their key strengths, and the challenges connected to their strengths when they are overused or not leveraged consciously and intentionally.
Friday, February 10, 2017
Just lost an executive and need an immediate replacement in the interim? Need a longer term exe...
Just lost an executive and need an immediate replacement in the interim? Need a longer term executive, but only on a shared or part-time basis? Then, you are in the right place. Red Rocket has a deep stable of CEO's and CMO's who are proven veterans at leading, managing and growing businesses. We have experts in both the B2C and B2B space you can virtually plug into your business.
Full-Time Interim Executives
Shared & Part-Time Executives
Our executives are located across the country, but depending on your needs and our availability, the work may either be completed on-site at your location, or virtually from our team's home offices via web video (with travel as needed to the office).
Contact us today, at the form at the bottom of this page, to schedule a call to see how we can help.
Future future posts, please follow us on Twitter: @RedRocketVC
Friday, February 3, 2017
I have previously written about when it is better to drive growth vs. profitability . But, what...
I have previously written about when it is better to drive growth vs. profitability. But, what wasn’t clear in that post, which I want to better explain here, is it is mathematically impossible to try to maximize growth and profitability at exactly the same time. The math just doesn’t work. And, for the many companies I meet that are trying to do both, I figured you could benefit from the below reality check.
Read the rest of this post in Forbes, which I guest authored this week.
For future posts, please follow me on Twitter at: @georgedeeb.
Do you remember the image during the credits of the movie Forrest Gump , where a feather is floa...
Do you remember the image during the credits of the movie Forrest Gump, where a feather is floating through the sky, being carried in whatever direction the wind would take it? That is a perfect visual of what not to do, when trying to build a business.
Business success requires an almost religious level of focus on the goal at hand, while not letting the whims or pet projects of our customers, investors or employees blow us in different directions. The entrepreneur that can keep the team focused and not easily distracted is the one that will most successfully get to the finish line.
Read the rest of this post in Entrepreneur, which I guest authored this week.
For future posts, please follow me at: @georgedeeb.
Monday, January 30, 2017
I was given early access to a good new business book by Shari Levitin called Heart and Sell: 10...
I was given early access to a good new business book by Shari Levitin called Heart and Sell: 10 Universal Truths Every Salesperson Needs to Know. Shari is an expert in sales strategies, and is a well-known speaker and author on the topic. I thought she did a really good job of highlighting the most important part of sales that most people forget: the emotions behind the sale, and tapping into those emotions with integrity in order to get the sale to close. Shari was kind enough to allow me to share a summary of the 10 universal truths with our readers below. These are truly words each salesperson should live by, in order to be closing more sales, faster.
1. Success starts with the growth equation.
Top salespeople share a willingness to take responsibility for their weaknesses, a deep curiosity about their customers and the world, and a desire for mastery. They commit to using what they’ve learned about their processes to continue improving. When you master this “growth equation” you will improve your sales record.
2. Emotions drive decision-making.
The desire to be loved, to create closeness, look good, feel good, be remembered—even to belong—drives all of our decision-making. Our ability to uncover our customer’s emotional dominant motivators will dictate our success.
3. Sales thrive in structure.
Pilots run through pre-flight checklists. Free-throw shooters develop rituals to help them hit the same shot time and again. Bakers adhere to time-tested recipes. So, why should it be different in sales? Highly successful salespeople have a process they follow and they follow that process every time. It may sound counter-intuitive, but structure creates the freedom to act authentically and to create true connection.
4. In sales, no never means no.
Are you paralyzed by fear of failure? Good. Top salespeople know that the more fear they feel, the more important it is to tackle the fear. What you’re afraid to do, you must do. The question you’re afraid to ask, you must ask. We are talking about “getting out on the skinny branches.” Failure is inevitable. Resilience will drive success, as no never means no.
5. Trust begins with empathy.
Trust is born of empathy, integrity, reliability, and competency. You need all four traits, but without connecting on an empathetic level, you won’t have a chance to demonstrate the other three. Empathy is the first building block of trust. We can’t pretend to have empathy. Empathy is not about shifting the conversation to what you want to say or judging your customer. It’s about being fully engaged and present to someone else’s emotions.
6. Integrity matters.
Once we cultivate true empathy, we find it impossible to lie to or cheat our customers—or anyone, for that matter, including ourselves. The word “sales” comes from the old English word for “give.” When we sell, we must give. We can only maintain trust and enjoy enduring success when we cultivate honorable traits like reliability, competency, and integrity. Eventually, they become part of our character.
7. Anything that can be told can be asked.
When we ask the right questions, we uncover what matters most. “Discovery questions” uncover customers’ needs, direct their thinking down a path we choose, generate curiosity, and ultimately move them to action. These questions build rapport, gain commitment, and help your prospects sell themselves. Well-crafted questions help us make a point loudly, without having to raise our voice. Good questions create change. Great questions can change the world.
8. Emotional commitment precedes economic commitment.
Most salespeople incorrectly assume that they can create a sense of urgency by threatening scarcity or appealing to greed. But if people don’t want what you’re selling, they won’t care if there are only two left or whether you’re throwing something else in. (Anyone want a stagecoach? It’s on sale today only! And I’ll throw in some horseshoes for free!) Engage customers with stories and build urgency by demonstrating how your product connects to precisely what motivates them.
9. Removing resistance takes persistence.
As soon as a prospect displays resistance, most salespeople drop the price, modify the terms, or otherwise change the offer. But the truth is: only when someone is in a receptive emotional state can you close. You need strategies for keeping customers receptive, isolating the toughest customer objections, and uncovering the real and final objection so you can close more deals more
10. Looking for wrongs never makes you right.
Every day, in every encounter, you have a choice. You can look for what’s right about that person or experience—what’s valuable or productive—or you can look for what’s wrong. When you’re interacting with your associates or your customers, don’t look for reasons why they won’t buy. Look instead for reasons why they will buy. Whatever you look for, be certain you’ll find it!
Thanks again, Shari, for sharing this with our readers. And, be sure to check out more details in the book itself. If any questions, feel free to reach out to Shari at her website and follow her on Twitter at: @sharilevitin.
For future posts, please follow me on Twitter at: @georgedeeb.