Academia is great, and understanding basic as well as advanced business concepts will undoubtedly help any entrepreneur in their journey towards launching the next top startup. However, there has been a recent trend among MBA programmes to focus a more of their coursework on entrepreneruship.
This coursework predominantly focuses on business plan writing, scalability and a lot of the things that we talk about here at f3fundit which in concept is not a bad thing, learning from others best practices and others mistakes gives us a leg up on the competition, however, what it does not do, and never will do, is substitute the real life experience that one gets from actually “doing it”.
Moving from Teaching to Doing
After all, reading every book in the lexicon on football, does not make you a good footballer, you have to go out there and practice, practice, practice. The same goes for entrepreneurs.
In the current academic spectrum, schools and professors are too preoccupied with teaching students theory, rather than having them do. The focus needs to shift to a more hands on approach. The question is how?
As start uppers will tell you, they are always underfunded, don’t have enough time, and are understaffed. The last of these is where the academic and real life – entrepreneurial words need to bride. Here we don’t mean summer MBA internships at startups, we mean active participation throughout the course year for credit.
Managing Expectations for Startup Internships
Students interested in entrepreneurship need that hands on experience, and truth be told, three months is simply not enough to learn what a student needs to. This bridge also needs to act as a tool to manage expectations of MBA’s and startup jobs.
You’ll find that a majority of top 10 MBA students will have egos, however, the start up process is decisively different than working for even an established SME. While the student may have expectations that he or she will work on strategy formulation, the reality may be that for two weeks the team may spend long hours doing nothing more than making cold calls, or even data entry. Being bootstrapped means that every penny counts and hiring three people at €8/hr to do data entry for three days is sometimes just not an option.
This is something that unfortunately the academic approach lacks, instead of a reality that oftentimes sees longer work hours than investment banking or consulting, the picture is painted that the start upper is an engine of innovation, and that securing financing is something relative to being in California in 1998 and starting a dotcom, whereas the real picture is more attune to a Mad Max style post apocalyptic grind. Which truth be told makes it fun.
Implementing change is never an easy task especially within institutions that have over time developed bureaucracies and have long embedded traditions and employees with a certain mindsets. One method, that does however prove effective in stimulating change among learning institutions are alumni and current students.
As schools rely on alumni donations on expanding, and as many of the alumni from business schools are or were entrepreneurs their voice should hold mettle among the administration. On the other side of the spectrum, business school students need to actively inform administration of their desire to participate in more hands-on initiatives instead of solely focusing on academic learning whether it be case, or technical, as neither is a satisfactory substitute for “just doing it”.
People have downloaded your mobile app, great but you’re not making any chips? Well here are a few reasons why, read them, and turn those frown into upside downs.
Mistakes Companies Make when Monetizing Mobile Apps
Mistake one. You decided to go for advertising. But who on earth will click on a mobile ad that will take them to “cheap flights to Rio de Janeiro” – mobile advertising as a whole does not currently work. No one in their right mind will want to go to a new website to spend time looking over A,B,C,D,E when they want the app to give them their info there and now.
Mistake two. App sales. While putting a price tag on your application may seem like a good idea, you’ve got to think, will anyone actually pay for it? As the app developer you think your app is probably better than it really is in actuality, and a 2.99 price tag on it may be too much. Now if you’re app is something like an internet updated timetable for trains on the London Underground, or something that helps hack life and make it a tad bit easier, then great, you can charge, but be sure that the price you’re asking is worth it.
Mistake three. Giving away value added services for free. You sold the app, and now you made a few bucks, great, but that’s a one off sale, and your cash flow is limited to how many people buy your products how many times. Instead of selling the app, give it away and charge for value added services. What do we mean?
Look at TapTap Revenge, a silly guitar hero type music game for the iPhone, some songs are given away for free to the consumer and are typically promotional songs that the record company pays Tapulous to publicize, the consumer wins by recieveing more content, the record company wins by increasing awareness of the new album / artist, and Tapulous wins by getting a few bucks.
But the buck doesn’t stop there, the company also offers the consumer premium content that they have to pay to download, these being known artists and new chart topping songs. The price is equivalent to iTunes, but again, everyone wins.
Again, when we say free we don’t just mean the end user, free may also relate to a B2B service. Say you plug into an augmented reality (AR) app that you download for free as a user, that app should have a strong B2B model where hotels/restaurants/stores can purchase a listings in the AR.
Mistake Four. You business model doesn’t allow you to monetize. More often than you would think people develop applications that simply cannot be monitized, how does this happen. The value proposition is not there, and it has a weak business model. Read all about it here. Always remember, a broken business model is a lot harder to fix when there’s a product, than to think of a good business model and build a product around it.
Mistake Five. You’ve thunk like an engineer and developed for the wrong platform. Every mobile developer I’ve ever spoken to loved Android. It’s open, its flexibile, it’s easy to develop for, it’s based on Linux, and has great overall functionality. Great! but who uses it? Currently the iPhone leads the global bandwith game globally, it’s app store offers the most products and is easily accessible and available, and is currently the market leader.
So, do you develop a pay to pay software product for a platform that is not the industry leader in terms of consumer apps, or do you go for the big market, where you will have more potential clients. The answer seems obvious, yet engineers are developing for the wrong platforms because they think those platforms are better. Was Beta-max a better product than VHS, it sure was, but who won out in the end. VHS. Consumer acceptance is key.
So how do we monetize an application.
Don’t go for advertising, it’s broken. Price your app accordingly, or give it away if you rely of B2B sales. Sell add on/value added services with your app. Think about your ideas business model before devoting resources to it. And finally offer your products to those that can actually drink from them, meaning, high consumer acceptance, and penetration.
There is no mobile business model.
A few years ago it was “social networking” before that it was “dot coms” and before that, well… betamax. But jokes aside each new hot technology trend is subject to the same problems when it comes to business model, there are none, so let’s invent one. .
We’re still experiencing the lack of business model in the mobile marketplace – now we’re not referring to the sales of handsets, nor the fees covered by mobile operators, what we’re referring to is mobile application development, and it’s monetization.
We have to remember that the fundamental difference between a mobile phone and a laptop, desktop, netbook, or even the iPad is the way in which they are used. Mobile use is best described as coming in bursts.
You need info, you pull the phone out, look for whatever information you need and put it away. You don’t spend hours surfing the net, you don’t stream last night’s favorite shows, and you definitely don’t edit your excel spreadsheet or write the next chapter in the novel you’ve been working on.
The mobile is a device that is meant for burst use. Even such applications as iPhone games, are used typically in bursts. You’re on the metro, the bus, etc… you’re bored you play a game for ten minutes you put it away.
So what about the business model? Aside from application sales via i.e. the Apple App Store, you’re pretty much in the dark. And even there the majority of applications that people will use are limited to what is “top rated” or “recommended”, individuals simply will not spend hours searching for an app to install on their mobile device. So as you see we have a problem.
Non-Efficient Application Delivery
As previously stated – application delivery is not efficient, and even if you have an amazing application how will you get people to pick it up and try it.
One of the better ways is to have bloggers review your apps, if they like them, the next level of users who are 1st adopters will try those applications out, if they like them, they will use them, and they will publicize them. And when speaking of publicizing, it’s imperative that you implement a facebook API into this application.
Why? Well since everyone and their mother is now on Facebook, what better way to get free publicity than through status updates.
What is the application’s Value?
It’s one thing if the application in question augments the use of a current product, i.e. TripIt, LinkedIn, Imdb.com but it’s a whole other ballgame when you’re developing a new product from scratch. Meaning, the value to the user of the application has to be there.
The Bad: An example of a bad execution is VoiceFree, the application basically allows you to post audio messages to your friends on facebook. But why on earth would anyone want that. It’s quicker to go to facebook mobile, and post a quick message to a friend than to record something, and then have someone listen to it. After all, we read quicker than we speak, and mobile information delivery needs to be
- Provide what you’re looking for
Does this app do it? The short answer is no. What is it’s value? Not much albeit being a nifty idea. But nifty ideas don’t always make good business sense.
The Good: On the other hand you have another app, bump – that allows you to exchange contact information by simply bumping your phones together. This app’s value is clear from the onset, and it’s a great little app, that all truth be told should be included in the iPhone OS. Yet, how do they monetize? By offering 3rd parties access to their technology, PayPal for example uses bump technology in their application which allows users to send money to each other by bumping their phones together.
Great application, clear value proposition, great execution.
Think about it
When thinking about development of any product, be it mobile, internet, physical, you always have to consider what value it will offer the customer, simply devoting resources to a great idea is for the most part an exercise in futility if you don’t know how you’ll monetize it, be it today, or tomorrow. At the end of the day, what really differentiates the mobile platform is it’s delivery, and use, remember it’s busts, but aside from that, a product is a product and needs to have a business model behind it.
Drummond Gilbert is in an ex-accountant currently developing gocarshare.com, a website that helps people share car journeys. Integrated with Facebook, and boasting its own mobile app, gocarshare.com will be free to use for individual drivers and passengers and will open up car-sharing as a cost effective and green way to travel. The site is slated to launch this June.
If you would like to contact Drummond you can do so via his e-mail, or on twitter @drummondgilbert. For more info on Drummond and the company, head over to his blog at gocarshare.com or join the facebook fan page.
By DRUMMOND GILBERT
How low can you go?
Bootstrapping is the process of setting up a business on a limited budget with very little external funding. It’s the approach I am taking with gocarshare. So what constitutes essential expenditure and where can you cut costs without cutting corners?
Communication & Collaboration
I’ve signed up for a worldwide subscription to Skype, which gives me free calls to landlines around the world. I have also signed up for the Skype voicemail service and a Skype out number; I’ve been working out in France over the last few months, this had made things considerably easier for me, as people have been able to call me on my UK number for the price of a local call, meaning that despite the fact that I am many miles away from the people I am working with, the distance is effectively irrelevant.
Skype has the potential to lower your phone bill considerably; it also makes it easier to contact people from all over the world. If you are not using it already you definitely should be considering it.
I set up a logo design competition on the website 99designs.com, this has allowed people from around the world to compete on my logo design for gocarshare. The price I paid for the logo was perhaps a quarter of what it would cost to get a professional logo designer to do it for me.
It also enabled me to allow people who had joined the various gocarshare social media sites to vote on the winner, thereby making the process more interactive and building the site’s profiles.
Whenever making a purchase it pays to think ‘how can I get this cheaper?’ If I am buying a product or service off the Internet and I see a voucher code box in the check out process, I always do a quick Google search to see if there are any vouchers available for it; more often than not there are and it represents quick and easy savings.
Scores of people have been telling me about the importance of marketing a site effectively; that to get people using it, you have to market it very well. I totally agree, what I am not so sure about is whether it is necessary to spend a lot of money on achieving it.
I am still at the brainstorming stage as far as the marketing goes, but here are a few things that I am doing already: using social network sites; by interacting with people on twitter who are going to events where car sharing is a viable option, I am building up a big potential user database. Yes, it takes time … a lot, but it is free!
Other than that, I have a facebook site and I am also experimenting with new social media sites which I think is essential if you are to stand out: Getgrogger is an interactive blog or ‘grog’ that let’s anyone contribute articles about your business, Sprouter is a twitter style contacting service but particularly for entrepreneurs. There are so many new sites; the key is to decide which are going to be big in six months time.
As far as PR goes, hiring a PR agency is only really an option if you have over £10k to launch your campaign; as I don’t, I’ll be doing the PR myself. I’ll be using all my contacts in the press and any contacts my friends have, I’ll be interacting with interesting journalists on twitter building up contacts. I know it’ll be hard work, but I also know that I can be a lot more passionate about my business than any PR agency can be.
One area that I thought long and hard about is the website development. There are a lot of strong arguments for keeping costs down and only launching with the features that are really necessary in you first build. Then testing your product on the market, seeing people’s reaction, then going back and making changes. For me, the website, is the business – if people aren’t impressed they won’t use the website. Spending too little is a false economy, and that is why I have decided that a very significant portion of the businesses budget will be devoted to website development.
In short, the Internet provides an invaluable tool to make savings but don’t neglect to take into account the value of your own time and the fact that investing in quality really does pay.
Take a chill pill, and relax.
Sometimes as Entrepreneurs we may see our days as simply work-sleep-work-sleep-work-etc… and while we hold a great passion for what we do, we sometimes tend to inadvertently run ourselves and our bodies into the ground.
The human after all is not a machine, we need our rest, our down time, and our relaxation, and that is where this article comes in.
As a hard working entrepreneur, ask yourself, when was the last time you took a break?
When was the last time you took a weekend to yourself, or even a few days off to go and enjoy some of the things in life?
It’s been a while hasn’t it? While working like a dog has it’s benefits – so does taking a few days to yourself. Sitting back and doing next to nothing, reading a book, and taking your mind away from the day-to-day can often invigorate you, and give you more clarity in your day to day tasks – and more importantly can make you more efficient, and help you solve problems in a more efficient and more acute manner.
How does this happen? Simple.
Relaxation helps to relax muscles and muscle tissue. In athletes it helps recovery times, and if you have problems relaxing on your own, think about getting a massage. A massage can help provide relief to trigger points.
Relaxation helps more than anything else to relieve stress, and we all know that as entreprenerus the one thing we have plenty of is stress. Stress aside from making you tense can also inhibit your ability to think and analyze problems clearly, this as you can imagine is detrimental to your and your business’ success.
Relaxation helps to increase circulation, meaning, more oxygen gets to the brain, and as such, allows you to again think better.
But what else helps you relax? We mentioned in a previous article, that exercise is is just all around good for your body, and has been proven to help increase dopamine levels in the brain. You know, that stuff that makes you happy.
Finally, taking a few days to yourself will also allow you time to spend with your family and friend, those things which we sometimes take for granted in our entrepreneurial lives while we’re running to make our business’ into the next Virgin “_enter word of your industry jargon here_”
So as Frankie who went to Hollywood said in 1984, Relax. When you relax your not stressed when your not stressed your happy and when your happy your healthy and when you’re healthy you’re more productive.