Recently I blogged about the shift that’s occurring in the outlook of New Entrepreneurs–and by New, I mean entrepreneurs who have started ventures in the post-Bubble economy of the past six-12 months. (We need a name for this new world order. Any suggestions?) I reached out to my network to find examples of what’s changing, and got a wide and interesting response. One of my old colleagues from CMP Media got in touch and we had a fascinating conversation. Seth Nichols has been vice president of digital media for Questex Media Group Inc., a business-to-business media and information provider, headquartered in Newton, MA. The company, which is an outgrowth of Advanstar, has more than 100 print and digital media publications, conferences and events as well as other information products. Earlier this month, Seth completed the purchase of one of Questex’s properties, Cadalyst.com, which is a publication and website for computer-aided design professionals, and launched his new company, Longitude Media.

To understand why this is interesting, you need to appreciate the dynamics of the business-to-business media industry today. It is in a shambles. Companies are downsizing, eliminating products and laying off employees more than ever before. The market for advertising of all kinds is under severe pressure. And amidst all this, Seth buys into the market. When I asked him to explain his reasoning, he talked about how things used to be when he and I were at CMP in the go-go days of Internet media. The outlook of media executives at that time and well after–call it the period roughly from1996-2008–was toward transactions. In the ’90s it was about positioning for IPOs; in the early 2000s it was about positioning for private-equity M&A. For a very long time the conversation has not been about creating value in the core asset.

The core asset in the media business? What is it?

It’s the audience you serve. Seth noted that traditional media companies, Questex included, may have hundreds of content-oriented websites but barely any (and sometimes no) people who spend their time on web analytics, web search, and online audience development. Finance and legal departments have outweighted and outspent the functions that create asset value.  Resources aren’t allocated toward mining and increasing the value of the core asset, the audience of readers for whom a particular content site exists. Seth’s approach? To focus his effort on audience aggregation using the most sophisticated tools and human resources available so that advertisers can get the maximum benefit of that aggregation. This is what media circulation departments used to do when I was growing up in publishing in the ’80s and ’90s. It’s not that Seth’s idea is new…it’s just that his idea has been forgotten in the age of transactional media. Now, everything old is going to be new again. And that’s a very good thing.

How about your industry? What are you doing that will redefine the entrepreneurial rules for the new age in which we find ourselves?

Tags: Cadalyst, CMP Media, Questex, Seth Nichols

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I was feeling rather shaggy this morning so I stopped at my local barber shop for a haircut before heading to the office. (Yes, that’s a picture of my haircut. I feel so much lighter!) The barber and I talked over the CNN News and got around to the subject of the economy. Turns out his boss, Mr. Tony, just bought one of the town’s oldest barber shops a few blocks away, on Main Street. They do about 350 haircuts a week there (at around $11 each).  He reportedly paid less than six figures for the shop, which has a fabulous lease–the rent is only $900 a month. So the shop does around $200,000 a year in cash sales and rent is around 5% of that.

Mr. Tony also owns two other shops in town–the one I was in this morning and another two blocks away. He owns the land and the buildings they sit on as well. When Dunkin’ Donuts moved in next door they wanted to buy his shop to make room for additional parking, and offered him quite a lot for it. He turned them down. He didn’t need the money. He also owns two more barber shops in the next town over…and has a few rental properties in the area. He keeps a low profile. He’s only 34 years old.  He does not invest in the stock market. Why bother? His businesses generate plenty of cash dividends for him.

I think small business entrepreneurship is going to look more and more like Mr. Tony’s model in the coming years. Smart people will find a niche that may not be sexy but has low overhead and is reliable (i.e. recession-resistant). They’ll take advantage of opportunistic moments to buy out competitors, for cash. Then they’ll pick up a real estate investment here or there, just a simple house or two, with reliable tenants and a residual income stream. Mr. Tony could care less about the recession.

Tags: barbershop, recession, small business

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I have a theory that hasn’t been tested yet, so I’ve been reaching out to my network for input–on LinkedIn, Twitter, Facebook, lots of emails, a few chats over coffee, and now here. First, some background. What has happened in the economy is like the difference between B.C. and A.D., like before the Great Depression and after, like 9/10 and  9/11, like before the Web and after. Some people are calling it a “reset,” which it is, only that’s not a big enough word to describe it.

Here’s my thesis: In this new world, there are going to be billions and trillions of dollars made in hundreds of thousands of new startup businesses, most of them small with sales in the millions and healthy profits.

BUT….these startups are being created with a new set of assumptions, business models and rules that were unimaginable Before.

So my questions for you are:

What will the new businesses be? And what are the new rules?

Looking forward to your reply.

Tags: entrepreneurship, small business

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Some of you may know the blogger of Escape from Cubicle Nation, and now author of the book by the same name, Pamela Slim. I’ve been a follower of Pam’s writing and inspiring ideas for entrepreneurs for several years and she’s required reading for any entrepreneur-in-training. You can order her book starting today–and get this: Pam says, “the first 500 people who pre-order the book and send me your confirmed order number will get another, spanking new, personally signed copy of the book as soon as it rolls off the assembly line.” You can order from Amazon or any other online or physical bookstore and send your order confirmation to escapefromcubiclenation@gmail.com.  Read the first chapter free right now.

Tags: Escape from Cubicle Nation, Pamela Slim

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The PETA people aren’t going to like this.

The Times reports today that the growing armies of the unemployed are sick and tired of sending out resumes and are starting their own businesses in droves. One laid-off biologist is making–and taking orders for, thank you very much– $25,000 jelly fish tanks. An entrepreneurship professor at the University of San Francisco coined this phenomenon “forced entrepreneurship.” It’s what you do when you can’t find a job and you have to pay the bills.

What I like about the forced entrepreneurs is that they tend to do things on the cheap, which is exactly the right way to get going. When I launched a new service to my catering business, I didn’t buy any equipment or product before I’d made my first sale. The equipment paid for itself after two jobs. Starting up with less definitely helps focus the mind.

Many forced entrepreneurs would be happier if they could only get another job in their field after a layoff. But most of them use poor methods for finding a job so they conclude they have no choice but to start a business. The typical mistakes of job hunters include not having prioritized, multiple targets for their job search; spending the majority of their time answering Internet job listings, which account for perhaps 15% of available jobs; not targeting enough positions (not jobs, but positions that are currently filled but which they’d be eligible for); and falsely believing that their job-search objective is to get a job, rather than to get dozens of meetings. For people who really would like a job rather than forced entrepreneurship, I recommend you visit The Five O’Clock Club. It has the best process for job search I have ever come across. Not that you shouldn’t do your entrepreneurial thing if that’s really your passion. Just be careful–those jellyfish stings are wicked.

Tags: entrepreneurship, Five O'Clock Club, job search

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Barry, one of my coaching clients, is a financial advisor in California. He’s been at the same, very large firm for 30 years and his book of business includes more than 300 households. By any measure, he is very successful (most people who hire executive coaches are). Lately we’ve been working on building his network of professional advocates–people who can refer business to him and to whom he can send clients who need trusted advisors such as CPAs, attorneys and other professionals.

On our call this week, Barry told me he had some surprising conversations with his clients about their other advisors. Turns out some of his clients aren’t all that enthusiastic about their CPAs and other advisors. I asked Barry why he thought that was the case. He said he thinks a lot of these professionals aren’t connecting emotionally with their clients. Wow! Interesting comment.

I asked Barry about his own CPA and I was even more surprised when he told me he wasn’t thrilled with her lately. What’s going on here? Barry called his CPA late last fall for guidance and advice on a real estate transaction. She gave him the technical advice. He decided not to move ahead with the deal. So?

“She didn’t ask me why I was interested in buying this building, what my motivation was,” Barry told me. “I felt like that was the most important thing for her to ask and she missed it.” Barry told me the reason he was looking at buying a building was to leave a legacy to his grandchildren, who are the center of his world. I wondered whether his CPA even knew he had grandchildren.

The upshot: he is thinking of changing CPAs, and his current one will probably be the last to know when he does.

Then we got to talking about his own 300 clients. He feels very close to about 10% of them, the ones that deliver 90% of his business. But he cares about all of them and isn’t satisfied with how he has shown it. His recent experience talking to some of his clients and finding their lack of enthusiasm for their advisors convinced him he needs to reach out more.

He outlined a plan to begin contacting the tier of clients just below the top tier to get information about their children and update his records. He will ask about his clients’ financial plans as it relates to their children. That could mean college tuition or estate planning depending on the client’s stage of life. It could mean planning for their grandchildren, too.

If you are an entrepreneur of any kind, I hope you get the point of this story. Nowadays, clients, customers, patients, students, and everyone who buys a service from someone else, is feeling uneasy. Some business owners will keep their relentless focus on selling new business and will overlook the emotional state of their current customers. And someone else will enter the picture. Someone who cares more and shows it, and that someone will get the business.

It’s time to call your customers and have a nice, long chat.

Tags: customer retention, entrepreneurship, small business, success

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I’m just finishing up writing a book for executives who are thinking about becoming entrepreneurs. I was trying to come up with an anecdote about how entrepreneurs need to be flexible thinkers, about to dodge roadblocks without much time to plan. I think I came up with one.

I went to Columbia Business School. One of my good buddies in class was an electrical engineer, whom I’ll call Todd. He designed photovoltaic cells for industrial buildings. I remember vividly when we took our first Corporate Finance midterm. The test consisted of one problem in which we had to use discounted cash-flow and other analysis to create a valuation for a company.

I got to about Step 14 of a 30-step process and then forgot how to calculate the cost of equity. After a minute of trying to remember, I made a little note in the margin: “Professor, I forgot how to do this step, so I am assuming the cost of equity is 12%.” Then I moved on to step 15.

Meanwhile, I could hear Todd in the seat next to me, and it sounded like….whimpering. Sweat was beading on his forehead….in the middle of December! When the test was over I asked him what happened. He said he got stuck after about 10 minutes (of a two hour exam) and couldn’t go on. I asked him, “Why didn’t you just make something up?” He was too dazed to answer.

We had a long conversation about it afterward. We concluded that the reason I was able to keep going and he was not had to do with our core personalities, our DNA. I am a marketing guy. I make stuff up for a living. If I’m wrong, so what? He is an engineer. If he makes stuff up, buildings are gonna fall down! He has to be right.

Once we talked it through, he was able to adjust for his personality type and vowed next time to keep going even if he didn’t know the answer to a piece of a problem. He got an “A” on the final and the course. I got a “B.” But should Todd be in his own business? Maybe not. Last I heard he is happily designing the most advanced solar panels in the industry for bigger and bigger buildings, and having a great life working for someone else.

Tags: Entrepreneur, small business, success

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