Tuesday, January 31, 2012

Change is Good, Even for Me

I have some news to share. To some it may be old news, while to others it will bring you up-to-speed with the last few months of my professional life. In September of 2011 I accepted a full-time position with an exciting, fast-growing, innovative company in the dental and medical device space. This changes a few things for me, and I'd like to take a minute and explain what it all means.

Why Aribex®?
In the beginning of 2009 I met Dr. Clark Turner, then the President and CEO of Aribex. The company was feeling some of the stress of the economy as well as the some cash flow constraints as it launched its second medical device into the market. We agreed for me to help the company as a part-time, or outsourced, CFO. For almost the past three years, my relationship with the entire team at Aribex as well as the board of directors fostered and grew into deep professional respect and trust. While I worked hard to establish similar relationships with the other companies I helped in my outsourced CFO role (about ten companies total), there are two things about Aribex that make it special.

First, the disruptively innovative nature of its technologies and products is a very compelling story. When a dentist of more than thirty years says the Aribex NOMAD is one of the five most influential products he's ever seen in the dental industry, it should catch anyone's attention. When another dentist claims the NOMAD is one of the five things he loves in his life, well, that may be a bit extreme. But I think you get the point.

Second, the company was founded from a desire to help dentists on humanitarian missions to better diagnose and treat patients in remote areas of the world who desperately need care. Those initial desires are woven into every element and business practice within the company. For example, no one would expect a company that had not yet reached profitability to allocate some of its resources to charitable and humanitarian causes. Yet Aribex has done so since the very beginning, in the best and worst of times.

I officially joined Aribex full-time in September 2011. Here's the press release about it: Aribex Announces Leadership Reorganization. I thoroughly enjoy being a full-time part of the team, and I'm optimistic about the future. Here is some information just released about how we're doing: Aribex Continues Double-Digit Growth, Becomes Debt-Free in 2011.

What about CFOwise®?
So, what does this mean to the more than five years I've poured into starting, growing, and building a CFO Services firm? Well, all of that work was hopefully to build it into something that would last. Last summer we created several executive positions that were filled by existing partners. They have stepped into their roles very well and are hopeful to take CFOwise to even greater heights. I still have an equity stake in the business and participate in executive committee and board-level activities.

What about my book and regular blogs and articles?
My book, Impact Your Business, is and will still be available for sale on Amazon and other places. In fact, it was nominated for the 2012 Small Business Book Awards. I plan to continue blogging regularly and writing for American Express OPEN Forum and other online and print publications as time permits.

Any other changes?
I have created this new blog, KenKaufman.net, where I will publish all of my blog posts and keep the rest of my information and content current. Feel free to visit and subscribe if you are interested to stay in touch that way. In addition, I switched my Twitter account from the CFOwise handle to @_KenKaufman. I can be reached via email at ken.angela625 at gmail dot com or at Aribex, kkaufman at aribex dot com. Toward the top left-hand corner of this page you will find buttons to connect with me on LinkedIn, Facebook, Google+, and more. I will also be sending out a simple email newsletter once every two months with a fresh look at the recent content I've authored. Feel free to sign up for it in the Bi-Monthly Newsletter Sign-Up box on the left.

Change is Good
While change can be uncomfortable and even at times painful, it is often for our good. I continue to move forward with the same energy and passion for which you all know me, and I'm looking forward to the challenges and opportunities ahead. I hope this brief explanation has been helpful, and I look forward to staying in touch. If I can help you in any way, please do not hesitate to let me know.

Thursday, January 26, 2012

Fifty 2nd Graders, 10 Pies, and a Rock Star

To help more than 50 second graders learn basic economic and business principles, my daughter's elementary school held a bazaar where each student sells goods and services to their classmates. They have $10 to spend on what they sell, and they exchange points earned from good behavior in class for fake money to shop in all of the second grade classrooms.

I saw an opportunity to teach my daughter, and the rest of the family for that matter, some lessons about how to start and build a business. Here's how it played out...

What Does Your Target Market Get Excited About?
The first thing I did is ask what kids her age like. Her older brothers, both of whom have been through the same experience, explained what they saw work the best--candy bars and soda pop. But with only $10 to spend on items for resale, those students capped their earning ability. Then my daughter started talking about the carnival from the fall and how all of the kids stood in a very long line to throw pies in the face of the principal. With some whipped cream and throw-away pie tins, we determined we might have some real potential. The picture below is the "store" she set up in her classroom:

Find the Optimum Business Model
Since we knew the kids liked smashing pies in other people's faces, we began to talk about the best way to monetize, or commercialize, her idea. This is often also referred to as building a revenue model. She decided she could afford to make 10 pies, and wanted to sell raffle tickets with ten lucky winners getting to "pie" someone in the face. She also guessed that some of the crazy boys in her class might be interested in paying for the privilege of getting a pie smashed in their face. We had no idea this "guess" would be our best money-maker, hands-down. Lesson Learned: If you work on it hard enough, you can likely find a way to monetize things for which people carry great excitement and passion.

Get Others to do the Selling for You
Once the event started, she sold a few raffle tickets for a dollar each and no one wanted to pay to get a pie in the face. I had been selected as the default facial pie catcher, so 10 minutes into the activity we had our first pie-throwing event. I found myself in front a very nice, cute young girl. I had no idea she could hurl that pie with such velocity! A small group of kids had huddled around to watch this happen, and they each burst into laughter at what they saw. And that's all it took. Word spread like wildfire, and everyone was talking about the 'pie' store. Lesson Learned: Some of the most significant influencers never spent any money at her store, but they sure brought in a lot of business!

Give the People what the People Want
Before she knew it more kids were interested in raffle tickets and one kid paid $10 for the privilege of taking a pie in the 'mug'. He loved it so much he paid $15 dollars to do it again, and he rounded up all of his friends to buy raffle tickets to try and win a chance to seek revenge, justice, or whatever motivated all those boys to buy tickets. Nothing like a satisfied customer. Raffle ticket sales were okay, but she was raking in more money selling the right to take one of ten pies in the face. I especially appreciated this, because that meant I only received two instead of ten whipped-cream facials. Lesson Learned: Listen to your customers and don't be upset when they use your product or service in a way you didn't initially intend.

Give the People what the People Want - Part 2
My daughter considered trying to get the principal to agree to be a pie victim, but she couldn't bring herself to ask him. She instead decided to target one the most popular teachers in the school, who is a real rock star. His band plays at school events and all the kids think he's great. He agreed to be the grand-prize pie receptacle, and the kids went crazy for it. Lesson Learned: Don't be afraid to ask for help, especially from people you think are too important to be interested in what you are trying to accomplish.

Give the People what the People Want - Part 3
While the raffle tickets were a good idea, she soon had groups of two coming up requesting for one to throw the pie and the other to be on the receiving end. They were offering her $20 each for this opportunity, or $40 per throw. All this while some of the kids were selling candy bars for $0.75. Lesson Learned: Reselling normal products has an earning potential cap, while selling products and services that generate buzz and emotion in customers and influencers carries a higher earning potential.

Pivot When it makes Sense
One thing we noticed after the third pie-ing is that most of the whipped cream stayed in the pie tin after being carefully, but forcefully introduced to someone's face. So, my daughter started to recycle the pies and was able to do far more than ten throws, increasing the opportunity for revenue and 'buzz' about the store. Lesson Learned: Keep your eyes open and you'll likely find easy ways to grow revenue, cut costs, and be more friendly to the environment.

This was a lot of fun, and all the kids came up with great products and services to sell. I'm sure many more lessons were learned than I mentioned, but my hope is a few entrepreneurial fires were lit. Here's a picture after the event when I had cleaned most of the spoils of the afternoon from my face, although it looks like I missed my earlobes!

Wednesday, January 18, 2012

The Business Model of New Year's Resolutions

An interesting thing happens every January. The gym is more full than normal (very frustrating for those of us who go year-round and get used to having the place to ourselves 11 months of the year). Places of worship see increases in attendance and donations. I'd imagine more blog posts are written, more journals are purchased, and more 'diet food' is consumed in January than any other month of the year. Why? New Year's Resolutions.

I see an enormous business opportunity in all of this self-improvement and goal-setting every January. People aren't happy with where they are at, and they're ready to part with their hard-earned money to try and get better, or at least feel better once they have an idea to try and be better and then they spend some money to show some form of commitment to being better.

I'd imagine that more than half of all gym memberships are sold in January. Many churches likely bankroll donations to sustain them throughout the year. So, here is the question for every business owner and entrepreneur--when is the most emotional time your customers want to buy from you? When do they feel more compelled than any other time during the year to buy your product or service?

The next questions surround the business model of a business with one time of year when customers want to flock to their products and services. How can you structure your business model to leverage this seasonal demand? What is the ideal way to engage customers during this peak, the point in time that they are most likely to sense the most highest degree of value your products or services offer to them?

I don't know the full history of the subscription pricing model, but it seems like seasonal demand could have had something to do with giving birth to it. Why not get people to sign up for a year commitment, like a gym?

The business model of new year's resolutions is really about understanding your customers and helping them buy from you at their most opportune, and often emotional, time. The time when they need your product the most, when, from their perspective, it can add the most value to them. Embrace, don't resist this about your customers, and build your business model to make it as successful as possible for you, your team of employees, and your customers.

Friday, January 13, 2012

12 Lessons Learned from 4 Award-Winning Startup Entrepreneurs

On Thursday, January 12th, 2012 the Utah Valley Entrepreneurial Forum (UVEF) invited four of the Top 25 Under 5 award winners from 2011 to share some of the lessons they've learned while starting, building, and growing their business. I had the privilege of working with the four entrepreneurs who came to present and facilitating the crowd forum format for their presentations and Q&A.

Each entrepreneur had about 2.5 minutes to present the basic vitals on their business, their customers, and the competitive landscape in which they operate. Then they had 45 seconds to describe the first lesson learned followed by almost three minutes of comments, questions, and dialogue with the crowd. This was repeated for the second and third lesson learned, after which the next entrepreneur would get up and follow the same format. Here is the slide show we used:

Since I was interacting with each entrepreneur as they presented, I was not able to take notes. However, during the event we asked attendees to tweet the lessons learned using the #uvef hashtag, so I am going to try and use the twitter feed to reconstruct the list of three lessons from each presenter.

Ryan Kohler, CEO of iApplicants (#14 Top 25 Under 5)
  1. Listen to your customers
  2. Build your own competitive advantage
  3. Take ownership of lead generation
Notable comments captured on Twitter during Ryan's presentation:
  • @MyZacAttack: Know who your target market is before launching a company
  • @TaleSpring: iApplicants competes with paper. C'mon! It's 2012 already! Quit accepting paper applications
  • @Caleblight: Listening is the best way of connecting with your customers.
  • @parkerboyack: don't waste your time focusing on your competition!
  • @utahguy: interesting approach to selling tech today - "it's better than paper"
  • @brandtpage: build competitive advantage & "bootstrap"
  • @Agility_Media: put your head down and go to work
  • @utahguy:  #iapplicants hires people with the patience to love the customer

Megan Brown, Founder of The Sweet Tooth Fairy (#13 Top 25 Under 5)
  1. Manage systems not people
  2. The worst decision is indecision
  3. Tell your story
Notable comments captured on Twitter during Megan's presentation:
  • @MyZacAttack: The Sweet Tooth Fairy is here at #UVEF. I'm smiling already! Megan is the owner and is living her dream
  • @KimUt: Megan Brown has a great business in the Sweet Tooth Fairy
  • @utahguy: #sweettoothfairy says women control 85% of consumer purchasing in US.
  • @Agility_Media: Its not the people that are typically the problem its the system, refine the system and the kinks usually go away
  • @MyZacAttack: Train your employees properly first and then evaluate them - with a @shelbigomez
  • @iApplicants: make a decision... Do your best, forget the rest...
  • @Hammona: Surround yourself with people who have done what you want to do.
  • @MyZacAttack: people don't buy what you do they buy why you do it. Sounds like #apple and #sweettoothfairy have something in common
  • @bryanbostrom: Sell more than a product - sell an experience. Thanks, Megan
  • @stevedalton: Great presentation by @sweettoothfairy

Alan Martin, Founder and CEO of CampusBookRentals.com (#4 Top 25 Under 5)
  1. Remove emotion from the decision-making process
  2. Partner well and find great talent
  3. Get a board of advisers and listen to what they say
Notable comments captured on Twitter during Alan's presentation:
  • @jeng17ut: remove emotion...true for almost every decision especially in decluttering!
  • @Agility_Media: Create partner agreements that give them a way out without damaging the equity of the company
  • @bryanbostrom:  Create partner agreements that give your partners a way out without decimating the equity of the company
  • @MyZacAttack: Know who your best partner is and seek similar companies
  • @utahguy: Accept 'NO!' as a proof of concept
  • @MyZacAttack: @alanmartin is a young entrepreneur who led his company to have over 150 employees and over $5M in revenue

Reed Quinn of KT Tape (#9 Top 25 Under 5)
  1. Sell an emotional product or service, something that reaches customers emotionally and for which they can carry a great passion
  2. Ability to scale
  3. Stick to what your're good at
Notable comments captured on Twitter during Reed's presentation:
  • @Trentewing: Cater to the consumer experience KT Tape
  • @iApplicants: don't do any marketing that doesn't generate an immediate return...
  • @bryanbostrom: Find an emotional customer

What did the attendees think of the 'Lessons Learned' crowd forum format?

As we were leaving, one accomplished entrepreneur explained he was in the process of writing a paper about the 20 things every startup and entrepreneurial company should do. "9 of the 'Lessons Learned' here today are so good I'm going to use them in my paper," he reported. Here are some additional comments on Twitter:
  • @KenSharrar: I am blown away at value-add while learning incredible business lessons in Provo @ Utah Valley Entrepreneur Forum lunch at Novell!
  • @KenSharrar: The value of 12 lessons learned at UVEF Lunch = Priceless!
  • @stevedalton: Loved today's luncheon from @UVEF. Excellent speakers, great info, and loved the format. Look forward to making it out to more events.
  • @Trentewing: Great speakers at the UVEF luncheon
If you were there, what did you think of the event? Any ideas on how we can improve the format?

Wednesday, January 4, 2012

Pull Up Your Bootstraps and Work Harder

Both of my grandfathers were entrepreneurs, men who started and ran one or more small businesses to support their families. They didn't create huge companies, but built lifestyle businesses that added value to themselves and the economy.

One of my grandfathers owned a butcher shop after World War II. He was a hard-working, industrious man. Every month he would hold himself accountable for the performance of his business. Once his books were done for the month, he would come home and report to my grandmother how the business did. What impresses me the most is the conversation that would follow a slow revenue month.

"We had a bad month," he would report to his wife.

"Well, what are you going to do about it?" She would question.

"I'm going to pull up my bootstraps and work a little harder," would be his reply, followed by a month of pushing himself a little harder and doing a little more to get his business ahead.

An eyewitness to many of these discussions, my mother recounts that this conversation would happen, almost word-for-word, every time a bad a month came. Interestingly, she can't remember what was usually said if the business had a great month, only a bad month.

Besides a fun personal reminder that entrepreneurship runs in both family bloodlines, here are my main take-aways:

1. Every business owner needs someone to whom they can report and be accountable

2. It's important to honestly assess how things are going, using numbers to represent performance

3. If things don't go well, take responsibility and focus on what you can do to improve future results