Tuesday, June 29, 2021

Starting to Grow, How Rushing to Market Turned Crystal Pepsi Into One of the Worst Product Fails of All Time, Even After Half a Billion of Sales in Its First Year - Find Angel Funding & Venture Capital for Business Startups, Entrepreneurs, & First Time Founders – Episode 9

Starting to Grow, How Rushing to Market Turned Crystal Pepsi Into One of the Worst Product Fails of All Time, Even After Half a Billion of Sales in Its First Year

Find Angel Funding & Venture Capital for Business Startups, Entrepreneurs, & First Time Founders – Episode 9


This video is part of my series - Find Angel Funding & Venture Capital for Business Startups, Entrepreneurs, & First Time Founders, learn more by visiting https://bit.ly/3hExYJX


As your business starts to grow, what do you see? Is everything running smoothly? Or are there hiccups in your business operations? When everything seems okay, you grow confident and start to take on more and more customers.

With more customers come more operational challenges. Challenges such as customer service, human resources, delegating roles, etc. It is also important for entrepreneurs to anticipate future challenges and their respective solutions. It is also important to ask yourself if you still like your business. You have options.
-Evaluate your business model and make some changes
-Focus on taking your business to the next level

You also need to watch profitability and cash flow. Initially, you do not need to be overly concerned about money because there are many ways to monetize a good business. But as your business grows and takes on more customers, it becomes imperative that your business makes money for it to stand on its own. Most of us do not have enough wealth in our bank accounts to lose money forever. 

If there is a market for your business idea you will make money, you will probably move on to the next step. If not, you should probably go back to the drawing board. If it doesn’t make money, it doesn’t make sense. 

You also need to make sure you have your product or service ready for mass scaling before you grow too much.

Crystal Pepsi was poised to become a billion-dollar idea. Instead, it was a colossal flop. Less than a year after the commercial hit the airwaves, the soda was yanked from the shelves. It became a cultural laughingstock.

How did Crystal Pepsi go from pop culture darling to the beverage world’s biggest fail? 
-A rush to launch before the recipe tasted right. 
-Spoilage from using clear bottles with a clear liquid, apparently colas are brown for a reason

In April 1992, the drink launched in Boulder, Colorado, and was soon flying off the shelves. But the clock was ticking. They wanted the soft drink to launch nationally in time for the Super Bowl on Jan. 31, 1993, as part of a $40 million ad campaign.

All told, Crystal Pepsi was rolled out across America at breakneck speed -- just nine months after initially pitched. By contrast, It took three years to launch Slice. It wasn’t enough time to accurately test Crystal Pepsi’s shelf life.

After the Super Bowl commercial, sales of $1.50 six-packs soared. The company sold $474 million of Crystal Pepsi by March 1993, according to The New York Times.

Unfortunately, Cases of Crystal Pepsi were being displayed sitting out in the direct sunlight. As predicted, ultraviolet rays caused the soda to spoil. Reports began pouring into Pepsi headquarters from customers saying that Crystal Pepsi tasted strange.

By 1994, less than a year after Crystal Pepsi’s big launch, it was discontinued. Two decades later, in 2014, the soda was named one of the “10 Worst Product Fails of All Time” by TIME Magazine.

Do you want more?

Previous Post - Why Competition Is Good For Entrepreneurs and How Blockbuster’s $50 Million Mistake Helped Reed Hastings and Netflix Destroy a $6 Billion Empire- Find Angel Funding & Venture Capital for Business Startups, Entrepreneurs, & First Time Founders – Episode 8

Are you looking for investors? Use this link to send us your information. https://register.omegadestiny.com/register-business-for-funding .

Use this link if you have a product or service that will help our early-stage businesses. https://register.omegadestiny.com/register-to-market-to-our-companies 

Sources cited

Disclaimer: This does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation of any security or any other product or service. We are not offering legal, investment, tax, or medical advice.

Tuesday, June 22, 2021

Why Competition Is Good For Entrepreneurs and How Blockbuster’s $50 Million Mistake Helped Reed Hastings and Netflix Destroy a $6 Billion Empire Find Angel Funding & Venture Capital for Business Startups, Entrepreneurs, & First Time Founders – Episode 8

Why Competition Is Good For Entrepreneurs and How Blockbuster’s $50 Million Mistake Helped Reed Hastings and Netflix Destroy a $6 Billion Empire 

Find Angel Funding & Venture Capital for Business Startups, Entrepreneurs, & First Time Founders – Episode 8



This video is part of my series - Find Angel Funding & Venture Capital for Business Startups, Entrepreneurs, & First Time Founders, learn more by visiting https://bit.ly/3hExYJX


When battling for resources or investment, early-stage entrepreneurs may believe that competition is a bad thing. On the surface, they are correct. There are a limited number of angel investors willing to provide a finite amount of venture capital to founders.  

However, is competition a good thing for business startups?

Competition is not always a bad thing for entrepreneurs. If you have a brand new startup with an innovation that nobody's heard about, you may not have any competition. However, this may cause a challenge getting customers or angel investors. Why? Because your audience will likely be confused by your solution business. 

When you sell something that is truly new, your first step will be to educate your audience. People cannot buy something before it exists. It is tough to attract startup funding when investors do not understand your solution. It is even harder if there is no proof that there is a market for what you are doing. This is often the case for innovative startups, because it is hard to prove if your target market will pay for something they never had. 

This leads us to another benefit of competition. If you need to compete with other businesses in order to win customers, at least you have proof that a market does exist for your startup.

Doing a competitive analysis is critical for your business to succeed. It will give you an opportunity to see the lay of the land. However, it will also help you to avoid a common startup trap that costs millions of entrepreneurs countless hours and dollars. Creating something that already exists.

At least 20% of the pitch decks I see are promoting a business or technology that has already been created. Competing with powerful incumbents is already tough enough. But creating a clone of something that already exists without powerful differentiators is a suicide mission. Why spend time, money, and energy building a YouTube-type business technology when YouTube already exists?

However, you can attack a powerful incumbent with technological innovation. Early in 2000 Blockbuster was a $6 billion giant that dominated the home entertainment business with almost nine thousand rental stores around the world. That year, Netflix founders Reed Hastings and Marc Randolph offered to sell the company to their major Blockbuster for $50 million. Blockbuster turned them down. 

In 2002, two years after that meeting, we took Netflix public. Blockbuster was still a hundred times larger $5 billion versus $50 million. 

How did Netflix compete?

“It was not obvious at the time, even to me, but we had one thing that Blockbuster did not: a culture that valued people over process, emphasized innovation over efficiency, and had very few controls. Our culture, which focused on achieving top performance with talent density and leading employees with context, not control, has allowed us to continually grow and change as the world, and our members’ needs, have likewise morphed around us.

Netflix is different. We have a culture where No Rules Rules.”

Reed Hastings and Erin Meyer, Netflix Founders


Do you want more? 
 
Previous Post - Market Testing for Better Decisions and Results, How Lego’s New Business Strategy Doubled Sales Overnight - Find Angel Funding & Venture Capital for Business Startups, Entrepreneurs, & First Time Founders – Episode 7


Are you looking for investors? Use this link to send us your information. https://register.omegadestiny.com/register-business-for-funding.  

Use this link if you have a product or service that will help our early-stage businesses. https://register.omegadestiny.com/register-to-market-to-our-companies


Sources

Disclaimer: This does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation of any security or any other product or service. We are not offering legal, investment, tax, or medical advice.




Tuesday, June 15, 2021

Market Testing for Better Decisions and Results, How Lego’s New Business Strategy Doubled Sales Overnight - Find Angel Funding & Venture Capital for Business Startups, Entrepreneurs, & First Time Founders – Episode 7

Market Test for Better Decisions and Results, How Lego’s New Business Strategy Doubled Sales Overnight 

Find Angel Funding & Venture Capital for Business Startups, Entrepreneurs, & First Time Founders – Episode 7 



This video is part of my series - Find Angel Funding & Venture Capital for Business Startups, Entrepreneurs, & First Time Founders, learn more by visiting https://bit.ly/3hExYJX


Market testing is simple. Go out and try to sell. Calls, emails, social media, digital ads, networking are all easy ways to test your business plan. 
 
After finishing your first set of market tests, you need to evaluate the results. It helps you determine whether your business strategy is working or not. It also saves you money down the road if you are not pursuing the right opportunity.

When it comes to assessing your results, you need to evaluate:

Market Reaction - What do people think about your product or service?
Sales Performance - How many leads turned into customers who bought your product or service?
Return-on-Investment (ROI) - Are you profitable?

Ask yourself the following questions while going through this exercise.

What worked? 
What did not work?
What were the strengths and weaknesses? 
What did I like? 
What did I not like so much?
What should I change about my business strategy? 
Which part of the business is perfect the way it is?

After you thoroughly evaluate your test results, you can make an informed decision about your business strategy and next steps. Do you need more market testing? Should you consider a pivot? Are we ready to move forward?

This really depends on you. If you feel like there is too much room for improvement, keep working. However, this can take days, weeks, months, or even years if you let testing and perfecting get out of control. I suggest get comfortable with an area you are making traction and move to the next step. 

Remember the famous statement by Reid Hoffman, founder of LinkedIn and a member of the Paypal Mafia, if you are not embarrassed by the first version of your product than you waited too long.


Through market tests and customer feedback, Lego discovered that only 9% of their users were girls in 2008. This obviously excluded about 50% of the children’s toy market. In 2012, Lego came out with a product line known as “Friends.” These figurines were slightly larger to accommodate accessories such as handbags and hairbrushes. They were also more colorful to appeal to young girls. It turned out to be a great success, and sales for that year were double of what was projected!

Do you want more? 


Previous Post - How Entrepreneurs Create a One-Page Executive Summary for Finding Angel Investors, TaskRabbit One-Pager, $38 Million Funding Success Story – Episode 6

Are you looking for investors? Use this link to send us your information. https://register.omegadestiny.com/register-business-for-funding.  

Use this link if you have a product or service that will help our early-stage businesses. https://register.omegadestiny.com/register-to-market-to-our-companies


Sources
http://www.duartepino.com/blog/5-ways-to-evaluate-your-marketing-plan
https://fuelcycle.com/blog/market-research-done-right-how-market-research-gave-lego-a-facelift/


Disclaimer: This does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation of any security or any other product or service. We are not offering legal, investment, tax, or medical advice.

Thursday, June 10, 2021

How Entrepreneurs Create a One-Page Executive Summary for Finding Angel Investors, TaskRabbit One-Pager, $38 Million Funding Success Story - Find Angel Funding & Venture Capital for Business Startups, Entrepreneurs, & First Time Founders – Episode 6

How Entrepreneurs Create a One-Page Executive Summary for Finding Angel Investors, TaskRabbit One-Pager, $38 Million Funding Success Story

Find Angel Funding & Venture Capital for Business Startups, Entrepreneurs, & First Time Founders – Episode 6



This video is part of my series - Find Angel Funding & Venture Capital for Business Startups, Entrepreneurs, & First Time Founders, learn more by visiting https://bit.ly/3hExYJX


This is one of my favorite hacks/shortcuts for raising money. It will save you a ton of time and get more attention from potential investors. 

When you start a business and raise money, you obviously need to have a plan. But how long should that plan be?  

According to U.S. Small Business Administration (SBA), "Most business experts and counselors say it (Business Plans) should be 30 to 50 pages, as a minimum, while others may say even less or more than this depending on their own personal perspective."

Do you know how many pages are in the business plans I use for raising money? Would you believe only one? 

There is a great tool called a one-page executive summary, or one-pager, which is a perfect way to communicate your idea to potential investors. A 1-page executive summary summarizes your thoughts, thesis, traction, and your predictions for the future of your business. Your 1-pager needs to give investors the gist of why they should invest.  

The 1-Page Executive Summary has replaced the business plan in our 140-character-or-less world. It hits all of the major areas of a business. It demonstrates a business' potential, while leaving enough flexibility for possible changes and pivots. Although there are many versions of a 1-pager, this is one of my favorite one-pager formats.

1. The Grab: You should lead with the most compelling statement of why you have a really big idea. This sentence (or two) sets the tone for the rest of the executive summary. Usually, this is a concise statement of the unique solution you have developed to a big problem. It should be direct and specific, not abstract and conceptual. If you can drop some impressive names in the first paragraph you should—world-class advisors, companies you are already working with, a brand name founding investor. Don’t expect an investor to discover that you have two Nobel laureates on your advisory board six paragraphs later. He or she may never get that far.

2. The Problem: You need to make it clear that there is a big, important problem (current or emerging) that you are going to solve. In this context you are establishing your Value Proposition—there is enormous pain out there, and you are going to increase revenues, reduce costs, increase speed, expand reach, eliminate inefficiency, increase effectiveness, whatever. Don’t confuse your statement of the problem with the size of the opportunity (see below).

3. The Solution: What specifically are you offering to whom? Software, hardware, service, a combination? Use commonly used terms to state concretely what you have, or what you do, that solves the problem you’ve identified. Avoid acronyms and don’t try to use this opportunity to create and trademark a bunch of terms that won’t mean anything to most people. You might need to clarify where you fit in the value chain or distribution channels—who do you work with in the ecosystem of your sector, and why will they be eager to work with you. If you have customers and revenues, make it clear. If not, tell the investor when you will.

4. The Opportunity: Spend a few more sentences providing the basic market segmentation, size, growth and dynamics—how many people or companies, how many dollars, how fast the growth, and what is driving the segment. You will be better off targeting a meaningful percentage of a well-defined, growing market than claiming a microscopic percentage of a huge, mature market. Don’t claim you are addressing the $24 billion widget market, when you are really addressing the $85 million market for specialized arc-widgets used in the emerging wocket sector.

5. Your Competitive Advantage: No matter what you might think, you have competition. At a minimum, you compete with the current way of doing business. Most likely, there is a near competitor, or a direct competitor that is about to emerge (are you sufficiently paranoid yet??). So, understand what your real, sustainable competitive advantage is, and state it clearly. Do not try to convince investors that your only competitive asset is your “first mover advantage.” Here is where you can articulate your unique benefits and advantages. Believe it or not, in most cases, you should be able to make this point in one or two sentences.

6. The Model: How specifically are you going to generate revenues, and from whom? Why is your model leverageable and scaleable? Why will it be capital efficient? What are the critical metrics on which you will be evaluated—customers, licenses, units, revenues, margin? Whatever it is, what impressive levels will you reach within three to five years?

7. The Team: Why is your team uniquely qualified to win? Don’t tell us you have 48 combined years of expertise in widget development; tell us your CTO was the lead widget developer for Intel, and she was on the original IEEE standards committee for arc-widgets. Don’t just regurgitate a shortened form of each founder’s resume; explain why the background of each team member fits. If you can, state the names of brand name companies your team has worked for. Don’t drop a name if it’s an unknown name, and don’t drop a name if you aren’t happy to give the contact as a reference at a later date.

8. The Promise ($$): When you are pitching to investors, your fundamental promise is that you are going to make them a boatload of money. The only way you can do that is if you can achieve a level of success that far exceeds the capital. What is your path to profitability and positive cash-flow? When will you get there? When will your investors start enjoying a financial return on their investment?


Remember, a 1-Page Executive Summaries need to be one page!

TaskRabbit, founded in 2008 by Leah Busque, is a two-sided marketplace that helps connect TaskPosters and TaskRabbits. Task Posters, people who require help with their regular tasks. TaskRabbits, people who have skills and time needed to help others in their regular tasks in return for some money. Tasks include planting, cleaning, pet care, plumbing, and more. 

TaskRabbit raised around $38 million funding as of July 2015. Then the IKEA Group acquired it in 2017. As of 2020, there were more than 140,000 Taskers on the network. On average, Taskers in the U.S. earned $35/hour. Below is an example of a Task Rabbit one-pager.




Below are some of the advantages of the one-page executive summary over the traditional, 30-50 page business plans when raising money.
-Increased likelihood of being read by potential investors, 1 versus 30+ pages
-Less work
-Easier to pivot/modify when you learn new information

I am not suggesting this is the only support for your business. You obviously need to do the work to support your one-pager. However, this still saves you from wasting a ton of time creating a formal 30-50 page document.   

Your one-page executive summary is important for every angel funding campaign. It helps you clarify your thoughts and communicate your vision. If you cannot summarize your concept in a 1-pager, you probably need to work on your business more before pitching investors.


Do you want more? 


Previous Post - Pitch Investors Using the Perfect Slide Deck and What Air Bed & Breakfast, Better Known as Airbnb, Included in Their First Pitch Deck - Find Angel Funding & Venture Capital for Business Startups, Entrepreneurs, & First Time Founders – Episode 5

Are you looking for investors? Use this link to send us your information. https://register.omegadestiny.com/register-business-for-funding.  

Use this link if you have a product or service that will help our early-stage businesses. https://register.omegadestiny.com/register-to-market-to-our-companies


Sources
https://www.sba.gov/offices/district/az/phoenix/resources/sba-recommended-business-plans-length#:~:text=This%20is%20one%20of%20the,on%20their%20own%20personal%20perspective. 
https://rencarlton.blogspot.com/2020/01/is-writing-business-plan-waste-of-time.html 
https://guykawasaki.com/the_art_of_the_-3/
https://www.appcentricsolutions.com/how-does-taskrabbit-works/ 


Disclaimer: This does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation of any security or any other product or service. We are not offering legal, investment, tax, or medical advice.


Tuesday, June 1, 2021

Pitch Investors Using the Perfect Slide Deck and What Air Bed & Breakfast, Better Known as Airbnb, Included in Their First Pitch Deck - Find Angel Funding & Venture Capital for Business Startups, Entrepreneurs, & First Time Founders – Episode 5

Pitch Investors Using the Perfect Slide Deck and What Air Bed & Breakfast, Better Known as Airbnb, Included in Their First Pitch Deck

Find Angel Funding & Venture Capital for Business Startups, Entrepreneurs, & First Time Founders – Episode 5



This video is part of my series - Find Angel Funding & Venture Capital for Business Startups, Entrepreneurs, & First Time Founders, learn more by visiting https://bit.ly/3hExYJX


When you go into a meeting with potential investors, you need to be prepared. One of the standard tools for raising money is a slide deck. What is a slide deck?

A slide deck, or pitch deck, or deck, is a term used by business presentation used by startup founders to explain their business model to potential investors. It is typically created using Microsoft Powerpoint, or a similar slide presentation program. 

Airbnb is one of the revolutionary business start-ups of our time. Airbnb, originally Air Bed & Breakfast, enables people to travel in a way that is more affordable by allowing people to stay at the homes of people who are willing to offer their residence for travelers, rather than staying at hotels. 

Here are the major sections used by Airbnb in their original pitch deck.

-Problem 
-Solution 
-Market Validation 
-Market Size
-Product 
-Business Model 
-Market Adoption 
-Competition 
-Competitive Advantages 

Check out Airbnb's original pitch deck using the following link.


It is simple, has lots of photos, and only 12 slides. You can also see a number of other famous pitch decks following that link.
 
When going through your slide deck it is show time. You should be hitting the major bullet points of your business model. Walk your audience through stories and the key points from your one-page executive summary, e.g. business idea, target market, competitors, marketing strategy, financial plans, etc.

There has also been research done on colors. Pay attention to the color palette of your slide deck. People are drawn to colors that stand out and make them feel warm. Use blue, purple, or green as a background for a calming effect. You can use yellow to highlight the important points. Red can be used for talking about competition. It is good to avoid color contrasts such as red and green, orange and blue, and red and blue.

Keep your presentation short and sweet. Avoid adding too much text to your slide deck. 10-15 slides maximum. Make sure you leave plenty of time and room for questions. Keep the presentation alive by adding stories to it. 

When pitching, focus on selling the benefits and the sizzle. We have a saying,” focus on selling the brownies.” If you are selling brownie mix, what should you emphasize? Does the front of the box show eggs, flour, and powder? No! There is a picture of perfectly baked brownies right on the front of the box. Focus on selling the brownies.

Important note, I deliberately build my slide decks so they are not very useful unless I am there presenting it. You probably do not want others presenting your business to potential investors.  No one will know your business better than you do. We definitely want as many people as possible talking about your opportunity. However, when you are pitching investors, you want to be the one going through the slides, explaining the details, and monitoring reactions. 

This is the way to pitch your billion-dollar idea.


Want More? 

Previous Post - Upscaling and Scaling Business Ideas – Jeff Bezos takes Amazon from Online Bookstore to Global Dominance - Find Angel Funding & VC – Episode 4

Are you looking for investors? Use this link to send us your information. https://register.omegadestiny.com/register-business-for-funding.  

Use this link if you have a product or service that will help our early-stage businesses. https://register.omegadestiny.com/register-to-market-to-our-companies


Sources


Disclaimer: This does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation of any security or any other product or service. We are not offering legal, investment, tax, or medical advice.