Getting the Most out of Business Analytics

             The expanding managerial movement to adopt analytics is being spurred by the needs for improved organizational performance and a sharpened competitive edge. Now that the benefits of applying analytics for insights and better decisions are being accepted, the next question is: How should an organization get the maximum yield and benefits from business analytics?

Carlson’s Law: Bottom-Up versus Top-Down Ideas

A trend with applying analytics is a demonstration of “Carlson’s Law,” posited by Curtis Carlson, the CEO of SRI International in Silicon Valley. It states that: “In a world where so many people now have access to education and cheap tools of innovation, innovation that happens from the bottom up tends to be chaotic but smart. Innovation that happens from the top down tends to be orderly but dumb.” As a result, says Carlson, the sweet spot for innovation today is “moving down,” closer to the people, not up, because all the people together are smarter than anyone alone, and all the people now have the tools to invent and collaborate.

A generally accepted way to drive the adoption of analytics is with executive team sponsorship and formally establishing a competency center for analytics. Unfortunately, the conditions are not always right for these. Executives are often distracted with fire-fighting or office politics. And creating a competency center requires foresight and willpower from executives, which can be a limiting factor.


I am a believer in Carlson’s Law because I have observed it in the adoption of enterprise performance management methodologies. These methodologies include strategy maps, balanced scorecards, customer profitability analysis, risk management, and driver-based rolling financial budgets and forecasts. Passionate middle-management champions drive change involving analytics more often compared to executives. Why? Middle managers ask themselves, “How long do we want to perpetuate gaining understanding and making decisions the way we do now – with little or no analytical insight or hypothesis testing?”
Pursuing Unachievable Accomplishments

Leadership does not only exist at the top of the organizational chart. Leadership can be present in individuals below the C-suite positions. This is possible because a key dimension of leadership is the art of getting a group of people to accomplish something that each individual could not do alone. Leadership does not require formal authority and command-and-control behavior.

There are hundreds or maybe even thousands of books and articles about leadership, yet some highly respected people believe there is a shortage of leadership. For example, in “Where Have All the Leaders Gone?” former Chrysler CEO Lee Iacocca describes with anger the sad state of leadership in the U.S. today.

My simple model of leadership has three components:

Care: Followers believe that leaders care about them and their organization.
Trust and hope: Followers believe that supporting a leader will improve things.
Mission: Followers want leaders to answer the question “Where do we want to go?” so that they can help answer “How will we get there?”

Executive leaders must communicate the third component; however, middle-manager champions can exhibit the first two.
Analysts Can be Leaders

Experienced analysts realize that applying analytics is not like searching for a diamond in a coal mine or flogging data until it confesses the truth. Instead, they first speculate that two or more things are related, or that some underlying behavior is driving a pattern to be seen in various data. They apply business analytics more to confirm a hypothesis than to randomly explore. This requires easy and flexible access to data, the ability to manipulate the data, and software to support the process. This is a form of leadership.

Leaders require moral, not physical, courage. An example of physical courage is rescuing someone from a fire. That is noble, but is not leadership. Moral courage is almost the opposite of a rescue. It is doing something not immediately highly valued and potentially perceived as sticking your nose in other’s business. Ultimately it is seen as a helpful contribution to organizational performance improvement.

There are hundreds of examples of applying analytics. One is to identify the most attractive types of customers to retain, grow, win back or acquire. Others involve risk management, warranty claim analysis, credit scoring, demand forecasting, clinical drug trials, insurance claims analysis, distribution route optimization, fraud detection, and retail markdown and assortment planning. The list is endless.

The investigation and discovery of what will align an organization’s actions with the executive team’s strategy for execution will not come from a CEO with a bullhorn or a whip. Better insights and their resulting decisions will come from analytical competency. Analysts can demonstrate leadership with the passion and desire to solve problems and discern answers – the power to know.

Prioritizing Your IT Concerns

              Results of a recent survey reveal six areas of priority for CIOs and their organizations: information security and privacy, virtualization and cloud computing, social media integration, data classification and management, regulatory compliance, and vendor management.


Protiviti, a global consulting firm, identified top areas of concern for IT leaders — 7 percent of respondents represented the insurance industry — based on competencies they cited as most in need of improvement in its “Information Technology Capabilities and Needs Survey.”

More than 200 IT professionals — including CIOs, CTOs, chief security officers and IT VPs, directors and managers — were asked to assess their skills and professional development priorities through questions covering three major categories: technical knowledge, process capabilities and organizational capabilities. After analyzing the responses, Protiviti concluded that virtualization and social media integration clearly stand out as the top areas in need of improvement in terms of technical knowledge. And related competencies such as cloud computing and social media security are also top “Need to Improve” areas for IT departments.


Specific concerns identified in the report include:

Some firms have vague or out-of-date social media policies in place that are unenforceable if inappropriate activity occurs.
The volume and pace of regulatory change has been significant in recent years, and there are a number of regulatory issues that require IT involvement, including Dodd-Frank, Sarbanes-Oxley, Basel II, Solvency II and PCI-DSS. "IT must be an active part of compliance management, which typically involves developing, implementing or integrating tools and platforms to achieve active compliance and risk management," said Kurt Underwood, managing director and head of Protiviti's IT consulting practice.

For every law and regulatory requirement, the company must also ask: What portion of my data does this affect? How do I classify and manage this data in accordance with the law? It also is important to note that, as a byproduct of the proliferation of new and emerging technologies, there are rapidly growing volumes of data being generated daily. By ranking, managing and classifying this data as a top "Need to Improve" competency, respondents may be saying they and their organizations are having difficulty understanding the increasingly complex regulatory landscape and how to comply with various new laws.

With more and more organizations transitioning to virtualized solutions as well as applications and activities in the cloud, external service-level agreements (SLAs) with an array of third-party vendors and other providers are a key concern for IT executives. Similarly, determining a sound strategy and approach for outsourcing and off shoring are another critical area of focus, particularly given that many companies continue to seek innovative ways to save costs. However, many of these organizations lack clarity or direction about how to accomplish this effectively while continuing to deliver a high level of service and maintain compliance with company policies, applicable laws and regulations.

Because data breaches are costly and affect not just operations but also brand reputation, information security is another top priority for IT executives. Key considerations for leaders to consider are: How robust are our information security measures? Is our organization in compliance with industry standards for security and privacy as well as applicable laws and regulations, and do we have efficient systems and processes for tracking compliance?

Google’s mobile revenue? Depends how you do the math.

            Google wowed Wall Street with the revelation that its mobile business is generating revenue at a run rate of over $2.5 billion.

Not bad for a business that’s still in its infancy, and which was operating at a $1 billion run rate at this time last year.

Of course, a run rate is not the same as revenue that’s been booked – it’s simply a way of extrapolating what a full year’s worth of revenue will be, assuming the current rate of revenue holds steady.

So what is Google’s actual mobile revenue right now?

Many Wall Street analysts estimated on Friday that Google generated $625 million in mobile revenue in the recently-ended quarter -– a not unreasonable assumption, given that four quarters’ worth of $625 million totals $2.5 billion. (And since Google said the run rate was more than $2.5 billion, perhaps $626 million for the quarter would be an even more reasonable estimate).

Not so fast, says BGC Partners analyst Colin Gillis.

There’s no guarantee that Google based its run rate on a full quarter’s worth of revenue.

They could have taken mobile revenue from the last month and multiplied it by 12, said Gillis. They could even have used their best single day of mobile revenue and multiplied by 365, he noted.

As a result, Gillis estimates that Google’s mobile revenue in Q3 was probably closer to $500 million or $550 million.

“We have no idea what that number really is,” he said.

The application delivery trifecta: Agile, composite and cloud

          Modern delivery initiatives are changing the creation of enterprise apps. But without proper orchestration, these initiatives can pull the enterprise in opposing directions. 

Three delivery trends are reorienting the way enterprise IT management leaders bring applications to market: Agile development, composite applications¹ and cloud computing. These trends share a single, primary aim, and it isn’t just cost reduction. The chief objective of these initiatives is better, faster outcomes. All three seek to strip the latencies from traditional delivery and provide results that are more aligned with, and more responsive to, the business.
If your enterprise is like most, you’re probably pursuing all three. But are you doing so in concert? Pursued together, these trends present certain harmonies that significantly magnify their benefits.

• Composite and cloud development prize the durability of services, ensuring that components perform well while remaining secure and resilient. Because both cloud and composite facilitate the exposure of services and subcomponents for use by other applications, their shared priority is for components to remain trustworthy in a variety of different contexts.
• Agile and composite align in their aim for modularity. They resist large and change-resistant monoliths—whether in terms of project plans or application architectures—in favor of discrete, bounded units that can be built, tested and delivered to production quickly.
• Agile and cloud overlap in the aim of responsiveness to change. Agile projects are designed to anticipate rather than resist change and to be able to pivot accordingly. The “always on” aspect of the cloud can facilitate this aim by reducing or eliminating the time to provision application environments, a key source of latency and inter-departmental squabbles.

But problems arise when these initiatives are pursued in silos, as independent strategies. This tendency means that instead of harmony, the risks in each trend begin to amplify the risks of the others. As one example, Agile software development’s focus on velocity can come to antagonize the thoughtful architectural planning that good composite applications require. In pursuit of speed, developers may code in an ad hoc manner ("cowboy coding"), which leads to a proliferation of redundant or poor-quality composite services.

The magic of the trifecta 

 

World-class delivery organizations harness the collective promise of Agile, composite and cloud development by seeing each in the context of the other. These organizations maximize the shared opportunities and minimize what could otherwise become hostilities among the initiatives. In this way, each initiative amplifies the value of the others.
Consider some examples of how these harmonies might be achieved:

• Harmony between composite and cloud: In this case, enterprise technical policy lays out standards for reusable services so that any new service is suitable for either internal use or the public cloud. In this way, standards for security and resilience would be included alongside performance—achieving the durability that both cloud and composite applications require of their services to ensure service trust and adoption.
• Harmony between Agile and composite: At the same time, the organization might define certain principles to guide how coarse- or fine-grained a composite service should be, ensuring that developers aren’t unnecessarily bogged down in architectural debates or tempted by shortcuts. In this way, Agile software development teams can produce composite services that meet the requirements for enterprise reuse, without a return to endless planning sessions.
• Harmony between composite and cloud: Given the interdependencies in building composite applications, where key services or systems are frequently either under development or available only at certain times, the organizations might seek to virtualize these dependencies—by finding alternate services already available in the cloud, or by investing in service virtualization software that mimics the behaviors of dependent application services.

Putting it all together

There’s little question that these three trends have improved the way we build and deliver apps. But the real value is in using all three together as part of the same strategic aim: to deliver better applications faster.

Innovation or maintenance: The right choice to save your business

              Innovation and simplification have become the mantra of high-performing enterprises, yet maintenance and administration costs consume the bulk of most organizations’ IT budgets, hampering innovation and increasing risk. Here’s how IT leaders can get out of the maintenance-spending trap.

On average, a typical IT organization’s spending on maintenance and administration is likely to consume at least 70 percent of its annual budget, but higher percentages are increasingly common. While the percentage itself is not that important, the result is. According to a recent survey, only 34 percent of global CIOs think they have achieved anything close to their innovation potential.1 The root cause? It’s likely that, with flat or reduced budgets, IT leaders’ innovation projects have been forced to make do with the scraps left over after they’re done keeping the lights on.

If this sounds familiar, you’re not alone. In January 2011, InformationWeek’s Global CIO Top 10 CIO Issues for 2011 noted failure to address the 80/20 spending trap as No. 2 on CIOs’ priority list.
Total IT Budget as Percentage of Revenue loading

Fortunately, some companies have proven that it is possible to drive better innovation performance and “flip the mix” between maintenance and innovation. In 2006, the HP IT team sent shockwaves through the industry by announcing that HP would embark on an ambitious project to transform IT with the goal of delivering improved innovation while delivering increased quality and dramatically lower cost as a percentage of revenue.

HP has applied the experience gained as part of its own transformation to help others achieve similar performance, with the Flemish government and Italian Ministry of Education among the ranks of HP customers that have significantly reduced their maintenance costs while delivering game-changing innovation.

“Doing nothing” is not an option

HP realized that maintenance costs were growing but, to maintain competitiveness, IT’s budget could not. Without an IT transformation to address the maintenance imbalance, innovation would grind to a halt.

The drive to innovate is not limited to technology leaders like HP; it’s an imperative for any enterprise that needs to perform better, one that can translate to the top and bottom line. For example, if your only competitors are organizations with IT maintenance costs of 80 percent to 90 percent, then shifting your own ratio even a little can create significant competitive advantage. However you should also consider that startups or companies in emerging markets often jump immediately to modern IT solutions such as converged infrastructure, cloud and SaaS, bypassing ownership and systems-building altogether. What happens as these emerging players, with near-zero maintenance costs, become your competitors?

And it’s not just the private sector that’s under pressure to rethink IT delivery. The U.S. federal government also recognizes the imperative to cut maintenance costs. In a recent interview with Fortune magazine, departing U.S. CIO Vivek Kundra remarked that “you would get laughed out of the room” if you went to your board and asked for millions of dollars to build out systems like email, finance and a data center for web site hosting. And yet, he said, that’s essentially what the U.S. government, like many companies, is doing.

Running the business of IT

Making true shifts in spending requires a new mindset in IT.

William Dupley, chief solutions manager in HP Canada’s Office of the CTO, likens this moment in IT to the state of the auto industry in the 1980s, when Japanese management techniques shook up American manufacturing. Out of that painful episode came an improved approach to quality management that IT leaders would do well to adopt.

“The three key strategies that need to be applied to IT are Six Sigma, Lean and Theory of Constraints,” Dupley says. These eliminate defects or flaws, non-value-add work and bottlenecks, respectively.

HP accomplished its reduction in maintenance costs by building an integrated system management architecture and data warehouse. HP IT analyzed labor and eliminated root causes (many of them due to old systems), just as if IT were a manufacturing process. Over three years, HP IT eliminated 75 percent of its application portfolio and standardized much of the rest. The team modernized data centers, infrastructure and system management technologies, and made extensive use of automation. The result: HP was able to bring its IT spending from about 4 percent of revenue down to less than 2 percent.2 By 2008, 70 percent of HP IT employees’ time was being spent on new development, with just 30 percent going to IT support.3

Visibility first

Effectively leading such far-reaching changes requires visibility across all IT resources and assets. Without an understanding of how all the interconnected parts work on one another, it’s likely that you’ll end up pulling levers without knowing what the outcome will be, jeopardizing not just IT’s transformation, but the day-to-day operations of your enterprise.

The key to a successful change-acceleration program is understanding where you are currently—your maturity level, the business challenges ahead—and then using that holistic understanding to move toward your enterprise’ goals. (Start by taking HP’s CIO assessment.)

“The real issue,” says Piet Loubser, senior director responsible for HP’s IT Performance Suite, “is the ability of CIOs to understand all the influences and drivers on their entire organization.”

Instead of pursuing an arbitrary benchmark, Loubser counsels IT leaders to focus on understanding the interconnected nature of IT and the business they’re in. “The problem with chasing ‘best-in-class’ is that it may not be the right number for your company at this point in time,” Loubser says. “And without the tools to measure and test it, you don’t know if it’s working.”

The important thing is to understand where value is derived. Says Dupley, “If you’ve got old applications that are critical to your business, that took years to create and are difficult to duplicate, you may have no choice but to have higher maintenance costs.”
Finding your best-in-class spending mix

Visibility into the ramifications of change lets you start adjusting your spending mix. “Best-in-class” typically varies by industry, but HP’s research has found that average maintenance and administration spending is roughly twice that of best-in-class. So how do you move your spending closer to best-in-class?

Start measuring: Remembering that “you can’t manage what you can’t measure,” look for line of sight into everything that affects your business. Start looking at KPIs within four broad buckets: business value created by IT, customer satisfaction, operational excellence and future orientation. HP created the HP Executive Scorecard and Financial Planning and Analysis solutions to give IT leaders an integrated perspective on the overall performance and efficiency of their organizations. (Watch this video to see how it works.)

Set targets: Armed with fact-based actuals and benchmarks, identify bottlenecks or poor performing areas and set targets to drive improvements. Says Loubser, “HP is able to control maintenance spend because we’re continually monitoring our own performance against those of our peers and competitors.”

Compare to where you want to be: Work with strategic advisors to assess relevant best-in-class metrics for your market conditions and the steps you’ll take to get there. Discuss your efforts with a community of peers.

You get what you inspect, not what you expect

Once you have a holistic understanding of all the drivers within your organization, you can use scorecard metrics to effect change.

The most critical aspect, Dupley says, is that “IT must move to a model using metrics to influence the future.” He adds, “You want to build a metrics system to create behavior, not just to report.”

With reporting systems such as an executive scorecard in place, IT leaders can combine lagging metrics (the past) with leading metrics (the future) to build insight that helps them make informed decisions sooner. Dupley counsels senior execs (VP and above) to use leading metrics to manage a year out.

Unleashing innovation

Combine a quality management mindset with visibility and measurement tools and you unleash tremendous potential for innovation within your organization.

For instance, HP customer Delta reduced applications testing times by 52 percent and allowed its testers to devote 90 percent of their time to business innovation instead of verifying legacy applications. Seagate found it more cost-effective to transition its internal email system to a third-party cloud, protecting outsourcing ROI as well as enforcing cloud service SLAs by using an application performance management system from HP. Another of HP’s customers, a Canadian university, transitioned 32 legacy email systems to the cloud, freeing up related staff.

By significantly reducing maintenance and administration costs, these and other IT organizations make IT transformation more than just a technology initiative—it’s a business strategy.

F8 2011: News From Facebook's Huge Event

               Facebook announces sweeping changes at F8, their annual developers conference. Here's a review of all the new features and changes that they've introduced.



To start things off on a happy a note, comedian Andy Samberg gave his best impersonation of Facebook CEO Mark Zuckerberg.







Andy Samberg impersonates Mark Zuckerberg at F8 2011




New Profile Design

The revamped profile now called 'Timeline' looks different with a new focus on photos and events. The user can choose what activities they'd like to share in their continuous stream, highlighting moments from his or her life, starting from the present day, moving back chronologically to the first day he or she was on on Facebook and before.


Introducing Facebook Timeline - #F8 2011



       The timeline now functions as a personal online scrapbook, with the most important photos and text that users have shared on Facebook over the years. It is Facebook's attempt at growing from an online hangout to a homestead, where people express their real selves and merge their online and offline lives. The timeline can go back to include years before Facebook even existed, so users can pretty much add photos and events from the day they were born.

P.S ~ Timeline won't be available to users for "a few weeks," so savor that old profile while you still can (or start to get excited for the new one!).

Read more about the new Facebook at their official blog,
http://blog.facebook.com/blog.php?post=10150289612087131

A Revamp of How You Interact And Share

Interacting with the content posted on Facebook: In addition to "Liking" videos, articles and posts about what your friends enjoy, you can now take part in these activities with your friends in real-time. These changes are made possible through Facebook's Open Graph platform. 

F8: FOR DEVELOPERS AND ENTREPRENEURS





  
A New Class of Social Apps on Facebook: Apps That Share Automatically




      
          Facebook is partnering up with a whole bunch of websites, mostly those that previously had fb plugins, and app-makers, to bring content that can be shared and consumed on the Facebook platform. Notable app genres include music apps like Spotify and Rhapsody, streaming video apps for Netflix and Hulu and news apps for the New York Times, Washington Post. Facebook's "new class of social apps" can post updates to your Timeline automatically. Apps no longer have to ask for permission to post content to Facebook over and over again. Instead, a new Facebook permissions screen explains exactly what type of stories will be shared the first time you give an app permission to post to your Facebook. Once completed, it will no longer have to ask for permission 

New Layout For Updates Posted 

       The Timeline is wider than the old profile and displays content in two columns. Posts appear in a continuous stream in chronological order, from top (most recent) to bottom (oldest). The layout is very visual and emphasizes large pictures and important events.

Videos With Friends

The Open Graph brings deeper video integration to the Facebook platform. For example, Netflix CEO Reed Hastings explained at f8 (and in a subsequent blog post) that users will be able to watch movies together--right from Facebook--with the Netflix movie streaming in a separate window. Though Hastings noted that this concurrent watching isn't allowed in the United States, he said that a bill is currently in Congress to legalize it. Other streaming sites like Hulu, YouTube, Daily Motion, VEVO and more will all allow for concurrent watching with Facebook friends.

Yearly, Monthly Navigation

The Timeline will feature a navigation panel along the right side of the page. This list of years, which can expand to display months, allows users to quickly jump to a spot in their timeline and view their posts from that moment in time. You can also manually scroll up and down through the timeline to search activity by month and year.

Introducing Music Discovery

Facebook now helps users discover new music. As part of its larger entertainment initiative, Facebook will launch a music dashboard, which will display music-specific notifications and updates, and also show which songs are currently popular within one's network of friends. 

Facebook has a New Friend: Spotify, The Soundtrack to your Social Life. 






Other music partners include Rhapsody, turntable, Songza, mixcloud, Slacker Radio, Rdio, Deezer, Mog, tunein, iHeartRadio, earbits and Soundcloud.


Stories Inside Facebook

When a friend posts a news article or story that they've enjoyed, you can read it within Facebook. A few of the participating publications include: Digg, Fipboard, Gawker, The Washington Post, USA Today and others.

Many apps will be available starting today, though you can expect the new Timeline profile in about "a few weeks," according to an official Facebook blog,
http://blog.facebook.com/blog.php?post=10150289612087131

Coverage of Mark Zuckerberg Presenting at F8 2011








If you have a large network on Yahoo profiles here's some extra developments that you can look forward to

As read on Technorati

..........Yahoo will announce a relaunch of Yahoo Profiles and their “all in” integration with Facebook Connect, including on the Yahoo home page. We’ve all known deep integration with Facebook was coming, but until now it wasn’t clear exactly how deeply Yahoo would go.

Read More at, http://techcrunch.com/2010/06/06/yahoo-goes-all-in-with-facebook-here-are-the-screenshots/

If you are slightly skeptical of all the new changes, additions and developments here's a slightly critical take by Bianca Lambert of The Huffington Post,

........' What do you make of the changes? Are these new apps creepy or convenient? Are you excited about the new information you'll discover, or worried about what might come to light? . '...........

Read more at,   Facebook's 'New Class Of Social Apps' Could Be Big Business For Site, Big Burden For Users

                     I personally believe that these new developments will greatly empower users in many ways, along with giving the Social Network and its millions of profiles a more personal touch. Ultimately it all depends on how, why and for what reasons they may or may not be receptive to some of the new features. Unlike most other technology companies the greatest challenge and test for a Social Network or a Social Network based business is off course the emotional appeal that it has with its users. We live in a Knowledge based Society where information can be both advantageous and refreshing. Adding that bigger dimension to staying in touch is what I believe facebook might just accomplish with this before the end of 2011. Most people should be quick to catch up with all the new stuff that they will now have access to based on how well the developers at Facebook and their partner sites have implemented and presented these features. Apart from the transitioning process another key factor off course is the ease of use and being able to turn off or disable certain features. ( Something that Facebook has done well every time it introduced something new).

 P.S ~ I think I'm really going to enjoy being able to do so much more with facebook. Reaching out to 800 million users at once is a noteworthy achievement that will go down in history, perhaps a small indication of all the possibilities that the future has in store . Keep up the good work guys. Best Wishes and KUDOS to You ALL :)

~Posted by Jai Krishna Ponnappan

Speeding Up Your Prototyping Process

              Engineers who get too hung up on perfecting a prototype often lose sight of the bigger picture and waste precious development time. Here are a few ways you can speed up your prototyping process to get your invention or product to market faster.


One of the most famous stories of prototyping done quickly, cheaply and spot-on came from the inventor of the cyclone vacuum. In 1978, James Dyson ripped apart a conventional vacuum and attached his own cyclonic filter using cardboard and duct tape. The crude model was a far cry from today's Dyson robotic cleaning machines that appear to be straight out of Michael Bay's effects department, but his experiment worked: Dyson proved the cyclone technology would function on a small-scale household product, and the first-ever bagless vacuum was born.

What Dyson didn't do was spend a long time making his prototype look pretty or incorporating all the functions he wanted in the final product. His quick, resourceful prototype let him zero in on his main feature and improve the design from there.

Engineers who get too hung up on perfecting a prototype often lose sight of the bigger picture and waste precious development time. Here are a few ways you can speed up your prototyping process to get your invention or product to market faster.

Speed Up Your Prototyping: Be Resourceful

The Dyson example illustrates the first key lesson of prototyping: Even if you're trying to engineer the most complex, mass-produced machine, that doesn't mean you have to start with a fully functioning materials lab.

Many designers mock up a website or new app on paper before they even put any functionality to it, says Alan Nguyen, an entrepreneur, former CEO of the Yan Group, a Web-mobile-TV music channel platform.

"Just start building it," he says. "You can start with paper cutout."

With the prototype, you're usually just trying to show off one element of the product, whether it's the design or a specific function, so there's no need to fret about constructing every part of it out of consumer-grade material or technology.

"You need someone to learn how to Photoshop basically," Nguyen says. "You don't need Flash or to actually code interactions."

Many successful entrepreneurs decide to do this kind of in-house mock-up to save money and time instead of hiring an outside firm, he says.

Bill Lucas, director of curriculum at the Luma Institute, which is based in Pittsburgh and focuses on educating innovators on human-centered design, says he encourages entrepreneurs to rifle through the junk drawer to find materials to round out a prototype. One group working on a project cut Tylenol tabs in half to represent buttons; another working in a conference room turned coffee cups upside down and used them as knobs.

"That kind of clever resourcefulness we find just absolute delights in the people we put through these learning experience," he says.



Speed Up Your Prototyping: Don't let Perfection Get in the Way

Don DeGraff's company, From Patent to Profit, which helps fast-track product development, advocates a very specific approach to quick and cheap prototyping. The company, which lists Kleen Kanteen among its success stories, tells inventors to create only a very crude prototype—out of balsa wood or other basic materials—that conveys the purpose and potential of the idea. Then, they make a video showing it off, put it online behind a password-protected site and begin showing it to potential investors or manufacturers.

"If they show interest, then and only then do you start spending money on the actual prototype," he says. "Now all of a sudden you've got an unbiased company or person looking at your process. And you've spent minimal dollars getting it out."

This not only helps inventors save money but also make sure they're appealing to the right parties.

"They're going to get the visual very quick if it's something they're interested in," he says.

Experts say the quest for perfection or focusing too much on details is something that often trips up engineers and entrepreneurs in the early stages of development. They spend too much time trying to make it look neat instead of focusing on showing off its features.

"It doesn't have to be perfect, as long as it conveys the idea of the full concept its getting out, it's fine," Nguyen says. "Sometimes paper is better. You don't want someone to basically judge it because one is prettier than the other."

Startup adviser Amir Khella says you need to think more like a hacker and less like a coder in these situations. Hackers know how to put things together quickly, test them, and solve problems. This way you focus more on validating the idea of the product instead of worrying about fixing bugs in the CSS code or other meticulous details.

That's the premise behind his latest venture, Keynotopia, which lets users design quick and easy interfaces and interactive mockups for web, mobile and desktop apps without touching a line of code. Khella followed his own advice: he launched the site in three hours with a $47.50 budget, and got his first paying customer within 10 minutes.



How to Speed Your Prototyping Process: Focus on the Variables

That also means you need to be not afraid to fail, sometimes over and over again. Good prototypes should focus on highlighting specific features of a product—the cyclone suction power in the vacuum, for example. You want to show people specifically how your product will vary or improve on what already exists.

You don't want to be spending time fleshing out every feature of the product, Lucas says.

"Don't go broad and deep," he says. If you do, "for all intents and purposes, you're making the whole thing build out."

Khella says he recommends inventors create three to five quick prototypes at a time to figure out which one is best, which makes you a more objective judge of the product.

"In my experience that's the difference between success and failure," Khella says. Too often, he says, he gets e-mails from app developers and engineers asking things like "How can I prototype with live data?"

"That shows maybe the person is getting lost in the details already," he says. "It kind of takes the experimenter's mindset instead of the perfectionist's."




How to Speed Your Prototyping Process: Know your Tools

The biggest boon to at-home inventors in recent years has been the availability of affordable, easy to use 3-D printers. The machines from companies such as MakerBot allow users to draft objects using 3-D software and print their own small objects at home, from small machine parts to full-sized gadgets.

"The first thing to do is to make sure you're working in the world of 3-D modeling," says Bradley A. Cleveland, president and CEO of Proto Labs. "If you can imagine any kind of crazy geometry, you can print it on a machine."

Proto Labs specializes in CNC machined and injection-molded parts for functional prototyping and custom one-off projects. If you're going that route with your prototype to see how it actually functions—instead of pasting together coffee cups, for example—it's important to educate yourself on the resources available before you start building.

"You really have to be careful to understand your production needs before you're done with the prototyping phase," Cleveland says. "A little bit of time spent up front spent education yourself on the prototyping processes can save you some big headaches."
- By Tim Donnelly.

Preparing to Launch Your Start-up?

                Preparing to launch your start-up means more than simply making sure you have a viable product and potential customers. Here are five tips on how to prepare yourself to be a founder.

John Bradberry was fascinated by the idea of how someone may prepare to start a company. Bradberry, himself an entrepreneur and venture capitalist, has worked for two decades as a consultant to small business owners, and he found himself attracted to the story of one of his clients, Decision One Mortgage founder JC Faulkner. “I wanted to understand why it worked so well, how did he bring the pieces of the puzzle together, and how does that apply to start-ups of other types,” Bradberry says.

For answers, he went first to academic research on the subject, and then thought back on his own experience as an entrepreneur. “One of the concepts that crystallized for me was readiness,” Bradberry says.

In his book 6 Secrets of Startup Success, Bradberry puts forward five steps that he says will help a person prepare to start a company. While laying the foundation for a successful company means making sure that one has a marketable product or service that will reach paying customers, founders who have already achieved some measure of success say that a dose of personal preparation may help a founder weather the early stages.

Here are Bradberry’s five steps, along with words of advice from entrepreneurs who have learned the value of personal preparation.

Step 1: Clarify your reasons and your goals.

Property management company Renter’s Warehouse has been the most successful of Brenton Hayden’s start-ups, but his failed companies have come with their lessons, too. Hayden, who calls himself “a great salesman,” was working at Kellogg’s until he was laid off eight years ago. After someone tipped him off to the money to be made in real estate, Hayden found a job working for someone else in the industry. He lasted about six months. “I realized I could do most of this on my own,” Hayden says.

He launched Renter’s Warehouse in 2006. Since then, he has launched a number of other companies, none of which has met the same degree of success. After his tax accountant suggested that starting another company may help him qualify for deductions, Hayden started a limousine company in 2008. “In short order I became the number one most booked limousine company in Minnesota,” Hayden says. And though Hayden says his limousines were the nicest in the Minnesota area, his company stalled. Hayden wasn’t losing money, but he wasn’t supporting the company, either; his attention was elsewhere. He broke even every year, running his limousine services at below-market rates. Other limo companies in the area tried to keep up, but since they were in business to make money, they couldn’t beat his rates. “I am pretty much sure that I am responsible for the total collapse of the limousine business in Minnesota,” he says. Hayden sold the company on New Year’s Eve of 2010.

“Really do your research,” Hayden advises any entrepreneur, whether they are starting their first company or their fifth. Don’t rely on a great idea, he says. “I call great ideas the death of your company and your personal finances. Often if you’re starting up they’re both going down the drain.”




Step 2: Understand your entrepreneurial personality.

Southwestern Missouri isn’t the first place most people would think to start a company selling spices. Yet that is exactly what Jeff Brinkhoff chose to do, building the company out of his father’s milk barn with $25,000 in cash. “It was a one man operation until I found somebody to help me package the first few orders,” Brinkhoff says. Nine years later and with $6.3 million in revenue, his company—Red Monkey Foods—is No. 465 on Inc.’s list of the fastest growing privately-held companies.

As for how he managed to build his company from its beginnings in a town of 800, Brinkhoff says that it was “a matter of tenacity.”

The most important quality any entrepreneur can have, Brinkhoff says, is the determination not to fail. “The first thing when you look at the bottom line when you go into this is you have to think one thing and one thing only, and that’s ‘I will not fail,’” Brinkhoff says. “And you have to be careful that it is not ‘I will not fail’ while you’re going down the wrong path.”



Step 3: Map your skills and experience.

Bryan Janeczko worked at Morgan Stanley before founding NuKitchen, a start-up he sold to Nutrisystem two years ago. Now Janeczko has a new venture, an online start-up incubator called Wicked Start. Understanding one’s own experience is critical in the early stages of starting up, he says.

“Many entrepreneurs I speak with have great ideas and even a great plan, but 99 percent of them have no practical industry-related experience,” he says. Like many entrepreneurs, figuring out what he did not know almost cost him his business. Janeczko said he was health conscious before founding NuKitchen, an online diet service, but he didn’t have any experience in food service. “That nearly put us out of business after losing $500,000 over the course of one year,” he says. “The solution is to either moonlight part-time, volunteer, or—better yet—take a paid role in as senior a position as possible in a business that most resembles your business model. At minimum, bring on a co-founder with the experience to help you.”


Step 4: Leverage your relationships and resources.

When Bradberry advises entrepreneurs to leverage their relationships and resources, he means that they should contact all sorts of qualified people in business who can help them make connections and network and make all sorts of other judicious business moves that will nudge them toward profitability. And then there's A.W. Pickel III, who chose to leverage the relationships of his young children and the resources provided by a professional skeptic who was expert at downing a six-pack.

Pickel was 36 years old, an employee at a savings and loan bank, and married with four children when, after working a late night preparing files that he says probably netted the bank about $15,000, his boss chastised him for leaving the light on in the executive washroom. Pickel decided he had endured enough.

When starting a company, “get counsel from different sources,” Pickel says.

For Pickel, that meant sitting his four children around the kitchen table and asking them for suggestions for his new company’s name. “Their name was Pickel’s Mortgage,” Pickel says. “That didn’t fly.” And if wisdom can come from the mouth of babies, why shouldn’t everyone have an ounce of truth to dispense? Pickel felt he needed to get some advice from someone who would tell him the truth, who would not be uncomfortable telling him his idea was a disaster. “I don’t wear my religion on my sleeve, but I do go to Church,” Pickel says. “One of the guys I had gotten to know was a guy named Joe Gray. He’s one of the least religious guys I know.” Because of that, Pickel says, he felt that he could trust Gray to be skeptical. “I knew he would shoot straight,” Pickel says.


Step 5: Position yourself for high performance.

Founders have to be ready to deal with whatever challenge may arise, Bradberry says, because—no matter how well-prepared the founder is—his or her company will almost certainly take an unexpected turn. “I find that often the biggest and most healthy businesses look very different from what the founders first envisioned,” Bradberry says. “They responded to what the market was telling them and it was something they could execute on.”

To be ready for whatever challenge or opportunity may arise, founders should try to keep their personal lives in order. If one is like Pickel, that may mean finding time to retreat from the world. “My wife says I am wildly entrepreneurial on the outside, but that I’ve cautiously thought through all the options on the inside,” Pickel says. He sets aside time in the early mornings to contemplate the day ahead. “What I do is in my mind I go out a year or two years, and then I examine those consequences. You can’t think when everybody else is yelling at you. You have to do it when no one else is around.”

Upgrade to the iPhone 5 ???

             In the world of tech, Internet rumors often turn into cold hard facts—sometimes overnight. With Apple, a company that never pre-announces products, gossip about the iPhone 5 coming this month (or next) have persisted for some time.

Most experts agree: all signs point to an imminent release. The companies that make iPhone accessories have hinted at a new device, and the timing makes sense for a pre-holiday release of the next wonderphone that will surely astound.

So what is a business to do? According to Gartner analyst Ken Dulaney, the answer is the same as always: Be prepared. Your business should be nimble enough to handle the upgrade smoothly, and that usually means assessing the need of employees (e.g., do they need a touchscreen phone or one intended for messaging?), and re-visiting contract arrangements with wireless providers.

Another important step: IT should be ready to handle any new security and management challenges with the device, which often means using a tool like MobileIron that can track new devices deployed in your organization.

Dulaney also had one more piece of advice: don’t buy an iPhone 4. The current version will be discounted or discontinued when the new model comes out.

iPhone 5 Features
Of course, deciding whether to upgrade is the hardest step of all. That’s where rumors can help you evaluate the forthcoming device, instead of making an impulse decision for employees once the iPhone does start shipping.

Rob Walch hosts a popular podcast called Today in iOS, so he has heard most of the rumors. He explained some of the new advancements.

The first one has to do with the camera. The iPhone 4 has a 5-megapixel camera, and it’s not bad. There aren’t as many features for adjusting white balance and other settings like you’ll find on an Android phone. Walch says the iPhone 5 will likely sport an 8-megapixel camera. He says iOS 5, the operating system that will run on the iPhone 5, has new features for a camera, including quick access buttons.

Another important spec: The iPhone 5 will likely use the same A5 processor in the iPad 2. That means it will run faster for just about every function, and it’s even possible that Apple will include some of the ground-breaking apps that now work on the iPad 2, including GarageBand and a movie-editing tool. Walch says the iPhone 5 will probably have 1GB of RAM instead of the 512MB on the iPhone 4. With more RAM, the iPhone 5 will handle more robust apps and run faster.

Walch says other features will include support for both GSM and CDMA networks, which means U.S. users could bring the iPhone overseas and still expect it to work. And, there might be an HDMI port that lets you connect up to an HDTV.

Small Business Prep
Crystal Kendrick, the president of the marketing firm, The Voice of Your Customer, says her company is considering an iPhone 5 upgrade. They are slowly transitioning to an Apple platform anyway, moving to Mac laptops and desktops and purchasing the iPad 2 for employees.

“The most compelling iPhone 5 features are the upgraded camera, faster processing system, and hot spot options [for sharing a 3G connection], and compatibility with our office products,” she says. “Having a single manufacturer reduces the cost of training, repairs, upgrades, accessories and communications plans.”

One way that Kendrick is preparing her company for the iPhone 5 is to eliminate existing Wi-Fi networks as a cost saving measure and because they will be superfluous when they start using the built-in iPhone hotspot features.

She says another important business strategy for her company is relying on “grandfather” clauses where she can keep using existing contracts for voice and data on phones, even after they upgrade to a new model.

Philip Chang, a partner at the PR firm Carbon in Chicago, had an interesting point to make about why his company plans to jump on the iPhone 5 bandwagon. The main draw has to do with the apps. Businesses are constantly evolving in how they communicate with new apps like LiquidSpace and GroupMe, which often appear first on the iPhone. Chang says, the iPhone 5 will just encourage new app development, and not being able to use these apps will cause problems in communicate between his team and with their customers.

“Nothing else on the market enables its users to share and create content as effectively or easily as the iPhone,” he says. “It gets the most attention from developers when it comes to rolling out a new communications tool.”

Chang is also interested in the faster processing, and the better camera capability (especially for recording high-def video clips).

Upgrade Plan
As Dulaney noted, businesses of any size need to have a plan in place for phone upgrades—the strategy of random upgrades for select employees usually does not work. It’s better to decide now who will get the upgrade, how much that will cost, how the company will support the devices, and to be ready for security issues.

Walch even goes a step further. Even though Apple has not released any details, the rumor mill is churning at full speed. He says it is best to work out the actual approvals for the new device, using iPhone 4 pricing of about $300 per phone. That way, your company can be ready to make the purchase at launch instead of waiting for the approvals—and possibly not being able to get one until 2012.

There’s always a sense of excitement with a new product launch. With Steve Jobs stepping down as CEO, all eyes will be on the new device to see if it lives up to expectations. The experts suggest being ready for something special.

Zuckerberg Converts His 5+ Million Facebook Fans into Subscribers

             Facebook co-founder Mark Zuckerberg has accumulated more than 5 million subscribers, thanks to a simple trick.

On Wednesday, Facebook rolled out a Subscribe button. It allows a user to follow anybody’s public updates, regardless of whether they’re Facebook friends. This one-way subscription model is like following somebody on Twitter or adding somebody to a Google+ Circle.

While some users are worried about the privacy implications of the the opt-in feature, many are using it to subscribe to other users, particularly Mark Zuckerberg. In fact, the Facebook CEO is amassing subscribers at a breakneck pace.

Since Wednesday morning, Zuckerberg has acquired more than 5 million subscribers, and that number is rising by the minute. The count is rising so quickly that the site can’t even properly display his total subscriber count (check out the screenshot to see what we mean).


There’s a caveat to this, though. Five million people didn’t suddenly decide to start subscribing to the Facebook CEO’s feed. Instead, Zuckerberg converted fans of his old Facebook Page into subscribers of his personal page. A cached version of Zuckerberg’s fan page shows that he had 5,203,153 fans just before he made the switch. That’s around the same amount of people now subscribed to his account.

We believe that number will continue to rise as Facebook migrates the rest of Zuckerberg’s fans to his personal account and new people start subscribing to him. The social network has been converting many fan pages into subscribers in the past day and plans to launch a do-it-yourself conversion tool in the next few weeks.

Now we have to ask: Is Zuckerberg the most-followed person on Facebook? Let us know in the comments if you find anybody else who comes close to Zuck’s numbers.

Rise of the Cloud Continues

              New Ventana research has confirmed that organizations are moving to the cloud now and will accelerate the pace of doing so in the near future. At least 20 percent of five different line-of-business functions use cloud-based applications, and within 12 months, at least 40 percent of eight of nine functions will.



Ventana Research undertook this benchmark research with the co-sponsorship of Information Management to assess levels of maturity, trends and best practices in organizations’ use of business data in the cloud. The research analyzed information from 141 qualified IT personnel responsible for managing cloud data.

Ventana found an increasing number of cloud-based applications in use. Nearly one-quarter (24 percent) of those using cloud-based applications have five or more deployed today, and 32 percent expect to have that many within a year.



For most organizations (65 percent) the most common pattern of data movement is between on-premises applications, but now as many must combine cloud-based data and on-premises data as need to combine on-premises data sources (both 86 percent). The research found that over the next two years cloud-based applications will grow faster than on-premises applications. Overall, organizations’ largest gap between needs and capabilities not yet addressed is in moving cloud data on-premises.

“A little bit of regressing is going on. We knew that with on-premise processes data quality and governance processes need to be followed,” says David Menninger, VP and research director for analytics, business intelligence and information management at Ventana. “With respect to cloud, these issues are resurfacing, and some are forgetting of the lessons of the past.”

All basic information management functions need to be addressed in the cloud, says Menninger. In this study, only 15 percent have completed a data quality initiative, only 5 percent a master data management initiative, and only 13 percent a data governance initiative for cloud data.

Menniger notes that only about one-fifth (21 percent) of organizations fully trust cloud-based data; more than twice as many (46 percent) fully trust data from on-premises applications. He suggests that putting automation tools in place and educating within the organization as well as getting processes established will help address cloud data trust issues.

Additionally, Ventana recommends that IT should find a way to collaborate with line of business. “We found when IT and line of business work together, the line-of-business groups are more satisfied,” says Menniger.

AGILITY IS WHAT THE FUTURE IS MADE OF: How Agile is Your Organization?

              There is a new (well, maybe not that new) methodology being used in IT to develop applications called “agile.”


Agile promises to deliver usable applications quicker and exactly the way the users need them. It has been around for more than 15 years and now seems to be gaining acceptance as a valid approach to IT development.

I learned about agile years ago, and there was something about it that I liked immediately: When business users needed something changed in a project, the developer made the changes. No muss, no fuss; the change got made, and without a lot of time or effort spent documenting the change request, getting multiple approvals, and revising the project timeline. It all might sound like a recipe for catastrophe, but agile has its own set of rules and processes to keep things under control. Without the bureaucracy, IT projects under agile are completed quicker and with higher satisfaction ratings from both the business users and the IT team.


The question I’ve worked on for a while is this: “Why can’t whole agile organizations operate in an agile way?” When a process or operating rule sits in the way of getting stuff done, shouldn’t it be as easy as just changing the process? Do we really need to touch base with multiple areas for input and get their approvals and sign-offs? And is it really the end of the world if a changed procedure needs to be changed again because something was overlooked or doesn’t work?

There are, of course, processes that fall outside the realm of what can be changed in an agile way. For example, controls under the Sarbanes-Oxley domain must be vetted and documented appropriately, and processes with the potential to negatively impact customers must be implemented with great care. Outside those types of things, plenty of processes can be changed easily and do not jeopardize the organization — such as the requirement that a supervisor sign off on an insignificant task, like making copies in a copy center.

Maybe it’s time for organizations to look for ways to implement agile, both for IT projects and as an overall operating style. The benefits could be significant for a company that accomplishes more processes faster. And satisfaction would be greater.

How to Choose the Right Web Server

              Running a business online means that your business needs to have an effective website, but often overlooked by businesses is the importance of the Web server. The Web server that houses your website is as important as the look and feel of your website. So how do you choose a web host, and do you need more than just a host?

Consult With Your Developer
Before you decide which hosting service to use, I recommend discussing the details and functionality of your website. Understanding how your website will be developed and how supportive your development firm is will help you decide what hosting firm to use. If you already have a website, discuss with your developer the traffic and bandwidth to understand what you may need for growth. Once you are educated on the type of structure that will be used to build your website or needed to grow your website, you can research the firms recommended by your developer as well as hosts you may already have in mind. You may need to graduate from a shared hosting service, which leads us to looking inward.

Look at Your Business Needs
How much support do you think you will need from your hosting company? If you're creating the website yourself or hiring a temporary contractor for the project, you may want to look at a host that provides more service support. Every hosting company has a support department, but what they consider support may differ from what you have in mind. If you're a solopreneur, you may want a firm that can help install applications. This is a task often performed by outside developers, but some hosting companies will provide this level of support -- for a price.

Uptime of your website is something most hosting firms market, but what about backups? Backups are not only needed when a site goes down, but also when someone makes an error. I can't begin to tell you how many people have accidentally renamed or overwritten a file and needed a backup restored. How quick is your host to respond to your needs? Response time can have a huge impact on any business and this is something to consider when reviewing your host. But response time and resolution time are two different things. Be sure to explore both. Don't get caught up in the marketing message; understand how firms escalate tickets and solve problems.

How Many Sites Do You Have?
It is not uncommon for marketing purposes to have more than one website. If you have more than one website, do you want a separate hosting account per site or a VPS? Virtual private servers can be a great solution to control the management of many websites, and will give you or your developer a root-level connection to handle installing Web services. VPS environments also you provide you with a hybrid of shared and dedicated applications, and, depending on the provider, a different level of support and resources.

Your website location matters both in terms of supporting you as a business owner and delivering a fast experience for your customers. Make sure to choose a quality solution that fits both objectives.

Why You Don't Want to Be the Low-Cost Leader

               When you select a pricing strategy--that is, decide how you wish to price your products or services--what is your goal? The first answer that comes to mind may be to maximize profits, but that isn't a good enough answer.

Think about it this way: When your company develops new products or invests in a new marketing campaign, what's the goal? To maximize profits. But that doesn't tell you what types of products to develop or which customers to target or what message to deliver.

Both Ikea and Mercedes want to maximize profits--and they use very different pricing strategies to do so--but we don't think of Ikea and Mercedes in terms of their pricing strategies. We think of them in terms of their products and positioning. Ikea is a fun, designer, starter furniture store; Mercedes is a luxury automobile manufacturer.

Both companies set their pricing strategies to be consistent with their overall goals and the vision of who they are. Price follows their corporate strategy--not the other way around.

What is your overall strategy? It's the general description of how you compete in the market. It is your sustainable competitive advantage. Your strategy should be based on how your product or service differs from your competition, from product features or location to marketing or the breadth or focus of your offering. It can be many things, but it shouldn't be price.

Related: How Pricing Can Power a Turnaround

Why not? Because pricing is not a sustainable competitive advantage. Prices can change almost instantly. Your competitor can change prices just as quickly as you can. What if you find that optimal price, that psychologically perfect price that magically makes all customers want to buy from you? Your competitors will copy it--immediately. Any competitive advantage you may gain with pricing is not sustainable.

The one time that pricing can be a corporate strategy is when the company is positioned as the low-price leader. That's Walmart. If you adopt low price as your strategy, then your business must be continually focused on lowering and controlling costs--like Walmart. You are attracting the price buyers, customers who are not loyal, but are looking for the lowest price. Once a competitor figures out how to sell a similar product for less, they will charge lower prices and you will struggle. If another company figures out how to sell products for less than Walmart, Walmart will be in trouble. Knowing this, Walmart maintains a laser-sharp focus on keeping costs down. If you make low price your strategy, you have to be like Walmart, continuously lowering your costs so your competitors don't catch up.

You may be thinking about a different price-based strategy. "My product is as good as a Lexus, but less expensive. I'm going to make that my strategy." Don't do it. You may be able to have that product positioning for a short while, but it's not sustainable. The market will morph, and your position may or may not exist in a few years. You have competitors on both sides of you, above and below, either of which may be able to steal your position, because your position is just price.

Related: Five Signs It's Time to Change Your Prices

Consider Walmart's discount retail competition. Kmart is having a difficult time competing with Walmart. Same-store sales continue to decline even as they come out of the 2010 recession. On the other hand, Target's same-store sales figures are growing rapidly. What's the difference? Although there are many factors, one is that Target has a unique positioning. It is described as "trendy," "cool" and "a hip discounter." Kmart may have the Martha Stewart brand, but the company as a whole doesn't own a position. There doesn't seem to be any real differentiation between Kmart and Walmart--other than price, which Walmart wins.

Target's success isn't based on price. They could not beat Walmart in a low price battle. Target's success is because they own the unique positioning of "hip discounter." There is only room for one company with lowest prices, and that company is Walmart, at least for now.

The strategy of low-cost leader is a rough-and-tumble position. Everything is done without frills. Once you get too comfortable, someone else hungrier than you will do it with less and steal your position. This is not a fun position to defend.

Even for companies that aren't low-cost leaders, you must still focus some of your energy and resources on costs. Target, Kmart and every company in a competitive situation still win and lose customers based on their prices. And to have competitive prices, they must maintain relatively low costs. Price is a factor in every customer's decision, and if one company's costs are much higher than another's, then they run the risk of losing on price.

10 Things Every Small-Business Website Needs

             The Web is full of horrendous sites, and we're not just talking about bad design. There are many other elements besides how your website looks that go into making it customer-friendly -- not to mention something that inspires them to actually do business with you.

From thorough contact information to customer testimonials, here are the essentials that every small business website should have for it to effectively help you do business.

1. A clear description of who you are
Someone who stumbles upon your website shouldn't have to do investigative work to figure out what, exactly, it is that you do. That means clearly stating your name and summing up your products or services right on the homepage, says John Zhuang, of Web-design and SEO-optimization firm Winning Interactive.

"Tell people this is the right website that they have been searching for," he says. "[A clear description] will attract the visitor's attention immediately within 2-3 seconds, and encourage them to stay on your website longer."

2. A simple, sensible Web address
Don't make things complicated.

"Your domain name is like your brand. It should be easy for a user to type it into a Web browser or an e-mail address," says Ron Wright, the founder of business Web design and online marketing firm Accentix.

He adds: "I always recommend the .com domain as users are conditioned to type that extension when they enter a Web address. For non-profits or organizations, I usually recommend using a .org domain for branding purposes, but also recommend having a .com version of the domain in case a user accidentally types the .com address."

Wright also suggests avoiding dashes (which can cause SEO headaches) and numbers (which can cause confusion for customers).

3. An easily-navigated site map
Clear links to the most important pages, and a site map, are crucial for guiding visitors to the information they're looking for.

"Be sure your navigation is clearly laid out. I always recommend using dropdowns in the navigation menu so the visitor can see the content under every heading from virtually any page. You want to make it very easy for your visitors to find what they are looking for, or what you want them to know," Wright suggests.

4. Easy-to-find contact information
You wouldn't want to lose a customer to a competitor just because you made it difficult for them to get in touch with you.

"Not every online visitor has the patience to click through every page on your website to find the contact information," says Zhuang.

"The best place for the contact information is the top left or top right corner of the home page," he recommends. "It is also a good practice to include contact information in every page of the website in the footer or side bar or even in top right corner, which helps the visitors to find it more easily."

You should also be sure to include several ways for them to contact you -- phone, e-mail, and a standard contact form, are all good options. Forbes also suggests including your address, and even a link to your location in Google maps.

"One of the biggest mistakes business owners make is to force only one way to reach them," says Wright. "The point is to make it very easy for users to communicate with you on their terms."

5. Customer testimonials
Honest words from others help make your products or services more tangible to customers who are visiting you online.

"They help your potential customers to build trust in you, especially if you are new," Zhuang says. "[And they] help shoppers to confirm whether the product [or] services meet their needs."

"People love to hear stories from real people," he adds. "They help people [find out] other things you haven't said [on] your website."

6. An obvious call to action
"Tell the online visitors literally what you want them to do with clear tones of commend," says Zhuang. "For instance, you may want them to call you now for free quote, or sign up to your exclusively online coupons, or add products to the online shopping cart, etc."

And, he adds, call attention to your suggestion -- by using special buttons or highlighting the text, for example.

7. Know the basics of SEO
Your website won't do you as much good if no one can stumble upon it. Become familiar with the SEO basics to make it more accessible by search engine.

"You don't need to employ mysterious, ninja, black hat SEO types to rank well on the search engines. Simply make sure your website is coded correctly," Wright says.

That means using the correct keywords throughout your text, putting in plenty of links, naming your page titles and URLs correctly, and employing the magic of images and videos.

8. Fresh, quality content
For many businesses, your website is your first impression on a customer. You want to give them what they're looking for, and perhaps even give them a reason to keep coming back.

Wright says, "The user is looking for something. Make sure you give it to them.... [and be] sure your content is original, well written and valuable."

Fresh content is a goldmine for SEO, as well. You can keep your content from getting stale (and give your company some personality, too) by incorporating a regularly-updated blog or connecting in your social media feeds.

9. A secure hosting platform
Having your online information hijacked is a nightmare, and, should it happen to your business, it could cost you customers.

"It is imperative that you have a secure, trustworthy hosting company to keep the bad guys out and your content up and running," says Wright. "It is also very important to keep your content management system updated in order to stay one step ahead of the hackers."

10. A design and style that's friendly to online readers
As Forbes puts it, "Web surfers have the attention spans of drunken gnats."

Zhuang describes it in more detail: "Online visitors often scan through a Web page to sample the content first when they open a new Web page. If they feel like they are on the right page, they will slow down to read the full story. To enhance user's experience on your small business website, you need to organize the content for scanning."

He recommends three style points for online writing to keep in mind:

Break things down into short paragraphs, with headers if necessary
Use bullet points
Highlight important words or phrases.

Wright adds, "In the end, simplicity and basic colors are the best bet. Again, the content is the focus, not dancing clowns at the top of the page."

The Benefits of Framing Out Your Website

           Suppose you're sitting at Starbucks with your corporate architect to discuss plans for an office renovation. You grab a napkin and start sketching desktops and conference areas with your pen. Some of the lines don't show up, and the napkin bunches up and tears, but you're quite pleased with your rendering--until you catch sight of your architect rolling her eyes.

Same goes for creating or redesigning your company's website. You can produce a forest of Post-it notes along with crude renderings in an attempt to communicate your point. Or you can employ sophisticated online wireframing tools or software to translate your vision into a website prototype.

Tools for Framing

While you can certainly use just about any graphics application to wireframe a website, more feature-rich options are available, including:

• Protoshare: Robust online wireframing tool that allows you to create rich, interactive website prototypes that you can share and collaborate on with others.

• Gliffy: Online diagramming tool with an intuitive interface.

• OmniGraffle: Mac-friendly software for wireframing.

• LucidChart: Create, collaborate on and publish highly polished wireframes online.

• Axure RP: Wireframing software for both the PC and Mac.

A wireframe--a stripped-down visual representation of a web page--helps you identify usability problems and market positioning opportunities early on, before you sink a lot of money into graphic design and programming. Until relatively recently, wireframes were in the sole domain of professional web designers. But today you can find dozens of wireframing tools online (see box), all with a free trial period, that simplify the process.

No real expertise is required to wireframe your site. Use the online tools to convey your ideas of what the site should look like and include. Because you're not a designer, you're not aiming for perfection; you're simply trying to convey a starting point that includes elements you feel are key to telling your story, positioning your company or brand, or drawing attention to a call to action or navigation scheme that is important to you. Your web designer will take it from there.

"I love it when clients provide wireframes," says Jerry Chrisman, owner of Grip Media, a graphic design and web development agency in Portland, Ore. "It helps me get a better idea of exactly what the client wants, and it speeds up development and avoids unnecessary complications."

So do yourself and your designer a favor. Wireframe your site before heading out to that meeting at Starbucks.

A New Model to Help Improve Website Usability

         For centuries, artists and writers have struggled to marry form and function. Click around online for a while and it becomes clear that web designers still grapple with the challenge. Achieving the optimum blend of text, graphics and white space eludes most companies. Too much text is likely to overwhelm, while too little leaves users guessing what the graphics represent. Too much white space wastes valuable real estate, while too little makes users feel cramped and confused.

How to create a clickable moment
The online experience results in a series of action-oriented visuals, where graphics, text and white space translate into actions. To create more clickable moments, do the following:

Keep it simple. Remove superfluous text and graphics to eliminate clutter and distractions and boost performance.

Imply more by showing less. Use white space strategically to showcase and amplify vital elements.

Account for menu-to-content asymmetry. Navigation menus on the top or right columns, though relatively smaller than the main image, tend to attract more attention.

Communicate purpose and intent through hierarchy and deliberate design. Layout should not appear haphazard.

Learn more about Oneupweb's Zen Triangle of Design at Oneupweb.com.

The optimum blend for any given industry or application varies. According to a June 2010 study published by Oneupweb, a digital marketing agency in Traverse City, Mich., it may require more of one ingredient and less of another to accommodate differences in user behavior (how people tend to interact with a certain genre of sites), online constraints (including two-dimensional screens and browser compatibility) and the nature and depth of the content. E-commerce and higher-education sites, for example, must incorporate more textual content, whereas B2B sites tend to make greater use of graphics and white space.

Oneupweb developed the "Zen Triangle of Design" as a model to measure and evaluate how effectively a design balances these three elements. With calculator and grid paper in hand, you can quickly determine whether a particular page's design offers a good user experience or if you may need to make adjustments. Perfect balance is not necessarily the goal. As Oneupweb makes clear, "there is no magic wand or golden rule for designing a good website." But the method does provide a benchmark--a quantitative measure--to consult for guidance.

Remember, website usability is not all about aesthetics. Functionality also plays a key role; users need to be able to go from point A to point B as quickly as possible. They demand quick access to prices, rates and other decision-making details and even quicker access to the point of sale.

A Zen Triangle moment could help you find the balance of aesthetics and functionality your site's visitors crave.

Tips for Interior Pages of Your Website

             Everybody knows the importance of making a positive first impression, but if you assume prospective customers first encounter your website through its homepage, think again. Natural search results drive users to individual pages that best match each user's search query, and often that page is not your site's homepage.

On the more than 25 websites I manage, nearly four of every 10 visitors enter the site from somewhere other than the homepage. They land on a page for a specific product or service, the About page, a page for a blog entry or even the Terms & Conditions page.

Unfortunately, most business owners and marketing managers focus 90 percent of their attention and resources on designing a stunning homepage and treat the other pages as an afterthought. Don't make this mistake. Give every page the same care and attention you devote to your site's homepage.
Interior Page Must-Haves
Every page on your site should contain the following elements:

• Company logo and tagline

• Consistent navigation, including search

• Call to actions both above and below the fold

• Clear, concise, compelling and grammatically correct copy

• Consistent design and color scheme to establish brand presence

• Advertisements to promote featured products, services and special offers

Check your website's analytics to identify where visitors most frequently enter your site, and ask yourself whether each page channels visitors to the information you want them to see and to the actions you want them to take. If any one of these pages fails to support your business-related goals, it's time to make some changes.

If you are unsure of your site's purpose, this is the first issue to tackle. You should have a clear purpose for your site before you build it, but if you skipped that step, formulate a purpose now.

Every page, not only the homepage, should communicate your site's purpose and steer visitors to the desired call to action. If you built the site to sell products online, every page should direct traffic to product pages. If the site's purpose is to encourage visitors to call in for an estimate, every page should include a phone number.

Remember that with the long-tail nature of search, you never know which door a customer is likely to walk through when entering your site. Make sure every entrance offers a greeting, projects an air of professionalism, presents relevant content and actively serves your purpose for building and maintaining the site in the first place.

Insurance Diaries: Why I Got Owners Insurance for My Home Business

             A funny thing happened to me recently while I was reporting a story for Entrepreneur.com on what insurance you need for your home-based business. I found some experts and got great advice on the types of policies available, and the coverage you need to protect your personal assets from a customer lawsuit.

In the process, I found out something important: I needed this insurance for my business. I was crazy not to have it.

Here's the story of what I found out, and what insurance I got for my home business:

I've been a freelance writer since 2005, and freelancing is a booming business at my house these days. Activities now include my husband's videography business, which involves more than $10,000 worth of videography equipment he uses to make videos both for my websites and for other clients.

It's all sitting around in the house. Customers sometimes come to over to look at their footage, and business deliveries arrive, too. Then of course, my husband goes out to clients and public locations to shoot videos.

In other words, it's liability city. None of this stuff is covered by our homeowners' insurance policy, I learned.

"If a UPS man slips and falls on your porch making a business delivery, you have no coverage," one expert told me.

The video equipment could be stolen, or lost in a fire or earthquake. Video equipment could be damaged or stolen on location. Clients or delivery men could slip and fall on our property.

I learned there are three basic types of coverage, two of which are too rudimentary for anything but a hobby small business. Adding a rider to your home insurance covers only a few thousand dollars of losses, for instance. For most of us, the answer is a Business Owners Policy.

It costs about $500 and gives you $2 million of coverage against loss, theft, injury and other liability. Pretty affordable for what you get. It took minutes to call my homeowners' insurance company and get them to draw up a BOP for me. And, hey, it's a writeoff.

The last thing I learned about getting business insurance: It can help your business land big clients, too. I just got a freelance-writing job with a major government agency, and they required that I show proof of insurance. Without it, I wouldn't have been able to get a contract worth over $10,000.

So not only do I sleep better now knowing we're protected from potentially losing our home in a customer lawsuit, but I've got more cash flow. Seems like a win-win.

Social Climbers: How Franchises Are Using Social Networking

                Whoever said there's no such thing as a free lunch obviously never visited the Facebook page of Einstein Bros. Bagels. Last year, Einstein Bros. launched its Bagel Bonanza promotion, giving away a bagel and cream cheese to anyone willing to sign up as the franchise's fan on Facebook. At the time, Einstein Bros. had only 4,700 fans across the social network, but when the digital coupon campaign wrapped up a week later, that number had skyrocketed to more than 300,000.

Einstein Bros. revived Bagel Bonanza during the spring, and it continues rewarding its online followers with discounts, menu previews and nutritional information. By the end of October, it had more than 600,000 Facebook fans.

"Social media is a place where consumers want to be," says James O'Reilly, chief concept officer for Einstein Noah Restaurant Group, the Lakewood, Colo.-based parent company and franchisor. "We're not a national advertiser, so we decided to make social media a pillar of our marketing efforts. It's a whole new channel for businesses to engage their customers in a two-way dialogue."

Einstein Bros. is far from the only company embracing social networking as a marketing platform: Nearly 75 percent of franchise businesses are now leveraging social media, according to a 2010 survey published by market research firm Franchise Business Review. And consumers are responding--69 percent say they're more likely to patronize a local business if it offers information on a social networking site, per a recent comScore research study.

"We've never been a big mass-media advertiser, and we've never been able to compete on a level with the larger casual dining restaurants that own the airwaves. We can't out-shout them with our marketing budget," says Jen Gulvik, vice president of marketing and creative director for Houlihan's Restaurants in Leawood, Kansas. "But it's still essentially free to play in social media. We can be in this space and do as well, if not better, than our larger competitors. It levels the playing field."

Houlihan's has been aggressive and creative in building out its social media footprint. In early 2008, the company introduced HQ, an invitation-only online community of more than 10,000 regular customers (or "HouliFans") across the United States. The HQ site is a direct channel for Houlihan's to solicit patron feedback on ideas and product plans, encourage word-of-mouth viral campaigns and invite insiders to members-only tastings and events. In addition, Houlihan's boasts a Facebook page and a separate page spotlighting Coaster McGee, its sassy in-store mascot. In September, Houlihan's began giving away orders of french fries to diners who check in at participating locations via mobile social network Foursquare.

Houlihan's also encourages its 94 U.S. franchise locations to nurture their own social media presence, and Gulvik says, 19 franchisees now maintain their own Facebook pages.

"We're not a traditional, conventional company. We're very cognizant of not acting chain-like," she says. "We know that consumers automatically give you a lower mark if you're a chain. There's a perception that chains equal ‘bad' and ‘cutting corners.' We want to communicate the flavor and personality of each restaurant and the community it serves."

That doesn't mean every franchisee--or every franchise, for that matter--is a good fit with social networking. Social media efforts demand the same care and attention as any other segment of your business.

"Unlike TV and radio, social media is a two-way medium, and it needs to be treated that way," O'Reilly says. "You have to have your Facebook page staffed with full-time people to help answer questions or handle issues in real time."

Gulvik agrees. "It's inexpensive to play in these channels, but it's time-intensive. You've got to make sure you have people dedicated to it," she says. "We tell our franchisees you can't just put up a Facebook page and ignore it. Putting up content is the easy part--engaging with the guests is another thing. You've got to be in there every day."

Among franchises active in social media, 45 percent tell Franchise Business Review they've leveraged tools like Facebook, Foursquare and Twitter to boost brand awareness, and 24 percent are pursuing new customers. But 11 percent are looking at social networking as a way to recruit franchisees.

"Social media is a part of every marketing campaign we have. We have a presence on various social networking sites, and many franchisees have their own sites as well," says Christie Wells, customer experience and communications manager for Häagen-Dazs Shoppe Co., a gourmet ice cream business in Minneapolis. "These are awareness opportunities for us, and we're using them to get the word out there that we're looking for franchisees."

In mid-October, Häagen-Dazs launched Ice Cream Boss, an interactive Facebook game designed to offer potential investors the scoop on owning and operating a store. Each week, Ice Cream Boss features a new story or situation unfolding in the virtual Häagen-Dazs Shop, challenging Facebook fans to offer suggestions and feedback on how best to resolve the issue.

"Our goal is to encourage people who are interested in Häagen-Dazs to play the game, then move into the franchise world," Wells says. At press time, Ice Cream Boss had only been online about a week, and Häagen-Dazs had yet to bring aboard any new franchisees as a result of it. "But we already have people playing the game and actively learning about the brand," she says. "That's great from a lead generation and contact standpoint."

"Social media is here to stay," Wells says. "The different sites and formats may change, but we're definitely keeping our focus on the medium. We want to make it a major part of our plans for expansion and shop marketing."

O'Reilly of Einstein Bros. shares Wells' enthusiasm for the platform. "The heart of the social media opportunity is that we're continuing to get better at building a dialogue with our fans. We can understand what they want and what they don't want, and respond in ways consistent with our brand equity," he says. "Consumers are smart and they're savvy, with opinions that need to be respected. Social media is the best way to keep them engaged."