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Entrepreneurship

Why Bad Economies Are Good For Business

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Why start your own company in a bad economy? Try to ignore the gloomy media picture of the world coming to an end, a crashing economy, high unemployment, business failures and difficulty accessing loans. Yes, I might be asking for a lot, but why not focus on the positive?

The amount of registered US companies does not change drastically from year to year, regardless of the economic climate. Although there is no clear trend towards more companies being launched, the Kaufmann Foundation noticed something interesting: startups initiated in tough times have increased chances of success, with half of 2009’s Forbes 500 companies having been launched in bad economies. The same is true for the world’s fastest growing companies. If you would actually like to see some of the companies that made the best out of recessions, look at Inc.com’s report. Suddenly, a recession doesn’t sound too bad now, does it?

What are the potential reasons behind it? It is quite simple: to succeed in such an economy, you will need talented people, a great business idea, a clear need for your product or service, eager customers interested in your offer and the ability to perfectly manage finances.

Find Your Co-founder

It’s usually difficult to find the right people for the job because they are usually in comfy offices and well-paid jobs working for the dinosaurs running the economy. Now, thanks to round after round of layoffs, talented people are losing their jobs or having their paychecks decimated. This leaves them resenting their current employer and considering a swift departure. What could be better than running your own company, being your own boss, working with equally talented people and escaping the bureaucratic world for one in which you dictate all the rules? Finding the right co-founders gets easier as the number of creative people looking for a change increases.

Unleash Your Creativity

It seems that the entire business world is under scrutiny right now and most flawed business models are likely to show their true colors and be either revised or abandoned. Every industry is being analyzed for possible flaws and improvement areas, so if you think your idea could revolutionize the business world, or at least your industry, now is the time. The tough economy will allow the most creative, resourceful individuals to succeed, not the ones with the most finances; and since the ones that do succeed enjoy long-term success, why not unleash your creativity, get the little black notebook where you jotted down all your crazy ideas, and see which ones could literally transform the world?

Shai Agassi started Better Place after being challenged to find an idea for how he would go about reducing the global dependency on petroleum. Now, his business model could cause a paradigm shift that would result in a massive disruption to the automobile industry through the creation of an infrastructure that would support EV cars.

Pick an industry and think how you would change it for the better, brainstorm it with other people interested in your market, discuss it with your friends and family, and you might be able to generate equally brilliant ideas.

Find Your Niche

The businesses that manage to thrive in harsh economies are the ones whose services or products are truly needed. Why? Because most clients are likely to cut down on unnecessary expenses in order to save money. In all likelihood, if your product seems more of a luxury than a necessity, chances are you will not make it right now and you should maybe shelf the idea for a later time; but if you can deliver a revolutionary product, or service, then your chances of success are higher. If your product is a necessity, weaker competition from larger corporations means more chances to succeed, especially in niche markets which are usually overlooked as they do not meet the investment demands of large firms, but have growth potential and are attractive for startups. Market and technological discontinuities are the basis of market entry triumph; either can generate success and together they are unbeatable. Just find your niche!

Customer Development

There is probably no company out there not trying to cut down costs. Can you use this “spend-less” attitude to your advantage? Avoid the costs of hiring a huge team of testers or developers and use alpha-testers to fine-tune your product; offer it for free to the first customers so that they can test its features and give you valuable tips on how to improve it. The result? Valuable customer feedback that can make your firm customer oriented and focused on delivering customer satisfaction. If your initial testers are happy with the product, they are likely to continue to support your efforts, and they will also provide valuable testimonials and word-of-mouth that will help you promote your business and gain new clients. Offering your product to companies that cannot live without it but cannot afford it either will gain you the status of “life-saving”; not too bad in terms of publicity if you can keep your costs low enough to afford it.

Also, whenever a firm will need a certain service or product, each supplier will be under more scrutiny than ever and managers use extensive information gathering before each purchase decision. So if your product is at least equally good or who knows, even better, your chances of getting key accounts increase.

A Lack of Capital Can Lead to Clear Focus

Small budgets equal smart investments. If you only have a little money to spend, you have to focus on the important aspects of your business by using your funds to develop a better process, increase your product’s quality or provide better customer service. All of which can be transformed into significant competitive advantages and sources of revenue in the long-term. When differentiation is not based on who has the most money to advertise, then startups with a better product have a better chance of success.

Setting up an typical business will only cost you about 25K, and if you followed our previous blog post, then you know we don’t really think significant amounts of capital are absolutely necessary when setting the foundations of your business. Money is no longer the holy grail of setting up a successful business in a weak economy, so take your chances while finances lack importance and ideas get the spotlight.

Stick Together

Cooperation can help your company grow and small firms have to stick together. Partnering up with other small companies that can complement your offering is sure to provide you with an edge. If you are just at the beginning, it is highly unlikely you can cover an entire service area; you need viable partners.

The new economy should be about co-creation and not about destroying competition; if there is a way a different business out there could help yours, why pass on the opportunity? Find the right partners, research what they are doing, understand how they could add value to your own product or service and you might just get the recipe for success. It is up to new companies to set the pace for the future, so you can be one of the innovators that choose to stop regarding every other firm out there as your competitor. Instead, try to implement a new business philosophy that could render a better economic model.

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About the Author

This article was written by Carmen Neghina of Grasshopperherder.com. The website is dedicated to entrepreneurship and insights about the lean startup method. see more.

Callum Connects

Malcolm Tan, Founder of Gravitas Holdings

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Malcolm Tan is an ICO/ITO and Cryptocurrency advisor. He sees this new era as similar to when the internet launched.

What’s your story?
I’m a lawyer entrepreneur who owns multiple businesses, and who is now stepping into the Initial Coin Offering/Initial Token Offering/Cryptocurrency space to be a thought leader, writer (How to ICO/ITO in Singapore – A Regulatory and Compliance Viewpoint on Initial Coin Offering and Initial Token Offering in Singapore), and advisor through Gravitas Holdings – an ICO Advisory company. We are also running our own ICO campaign called AEXON, and advising 2 other ICO’s on their projects.

What excites you most about your industry?
It is the start of a whole new paradigm, and it is like being at the start of the internet era all over again. We have a chance to influence and shape the industry over the next decade and beyond and lead the paradigm shift.

What’s your connection to Asia?
I’m Singaporean and most of my business revolves around the ASEAN region. Our new ICO advisory company specialises in Singaporean ICO’s and we are now building partnerships around the region as well. One of the core business offerings of our AEXON ICO/ITO is to open up co-working spaces around the region, with a target to open 25 outlets, and perhaps more thereafter.

Favourite city in Asia for business and why?
Singapore, since it is my hometown and most of my business contacts originate from or are located in Singapore. It is also a very open and easy place to do business.

What’s the best piece of advice you ever received?
Be careful of your clients – sometimes they can be your worst enemies. This is very true and you have to always be careful about whom you deal with. The closest people are the ones that you trust and sometimes they have other agendas or simply don’t tell you the truth or whole story and that can easily put one in a very disadvantageous position.

Who inspires you?
Leonardo Da Vinci as a polymath and genius and leader in many fields, and in today’s world, Elon Musk for being a polymath and risk taker and energetic business leader.

What have you just learnt recently that blew you away?
Early stage bitcoin investors would have made 1,000,000 times profit if they had held onto their bitcoins from the start to today – in the short space of 7 years.

If you had your time again, what would you do differently?
Seek out good partnerships and networks from day one, and use the power of the group to grow and do things together, instead of being bogged down by operations and going it alone from start.

How do you unwind?
I hardly have any time for relaxation right now. I used to have very intense hobbies, chess when I was younger, bridge, bowling, some online real time strategy games and poker. All mentally stimulating games and requiring focus – I did all these at competitive levels and participated in national and international tournaments, winning multiple trophies, medals and awards in most of these fields.

Favourite Asian destination for relaxation? Why?
Phuket – nature, resort life, beaches, good food and a vibrant crowd.

Everyone in business should read this book:
Rich Dad Poor Dad by Richard Kiyosaki

Shameless plug for your business:
Gravitas Holdings (Pte) Limited is the premier ICO Advisory company and we can do a full service for entrepreneurs, including legal and compliance, smart contracts and token creation, marketing and PR, and business advisory and white paper writing/planning.

How can people connect with you?
Write emails to [email protected], or [email protected]

Twitter handle?
@malcolmABM

This interview is part of the ‘Callum Connect’ series of more than 500 interviews

Callum Laing is an entrepreneur and investor based in Singapore. He has previously started, built and sold half a dozen businesses and is now a Partner at Unity-Group Private Equity and Co-Founder of The Marketing Group PLC. He is the author two best selling books ‘Progressive Partnerships’ and ‘Agglomerate’.

Connect with Callum here:
twitter.com/laingcallum
linkedin.com/in/callumlaing
Download free copies of his books here: www.callumlaing.com

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Entrepreneurship

Women on Top in Tech – Pam Weber, Chief Marketing Officer at 99Designs

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(Women on Top in Tech is a series about Women Founders, CEOs, and Leaders in technology. It aims to amplify and bring to the fore diversity in leadership in technology.)

Pam Webber is Chief Marketing Officer at 99designs, where she heads up the global marketing team responsible for acquisition, through growth marketing and traditional marketing levers, and increasing lifetime value of customers. She is passionate about using data to derive customer insights and finding “aha moments” that impact strategic direction. Pam brings a host of first-hand startup marketing experiences as an e-commerce entrepreneur herself and as the first marketing leader for many fast-growing startups. Prior to joining 99designs, she founded weeDECOR, an e-commerce company selling custom wall decals for kids’ rooms. She also worked as an executive marketing consultant at notable startups including True&Co, an e-commerce startup specializing in women’s lingerie. Earlier in her career, Pam served in various business and marketing positions with eBay and its subsidiary, PayPal, Inc. A resident of San Francisco, Pam received her BA from the University of Pennsylvania and MBA from Harvard Business School. Pam is a notable guest speaker for Venture Beat, The Next Web, Lean Startup, and Growth Hacking Forum, as well as an industry expert regularly quoted in Inc., CIO, Business News Daily, CMSwire, Smart Hustle, DIY Marketer, and various podcast and radio shows. You can follow her on Twitter at @pamwebber_sf.

What makes you do what you do?
My dad always told me make sure you choose a job you like because you’ll be doing it for a long time. I took that advice to heart and as I explored various roles over my career, I always stopped to check whether I was happy going to work every day – or at least most days :). That has guided me to the career I have in marketing today. I’m genuinely excited to go to work every day. I get to create, to analyze, to see the impact of my work. It’s very fulfilling.

How did you rise in the industry you are in?
I had a penchant for numbers and it helped me stand out in my field. This penchant became even more powerful when the Internet and digital marketing started to explode. There was a great need for marketers whose skills could span both the creative and the analytic aspects of marketing. I capitalized on that growth by bringing unique insight to the companies I worked with, well-supported with thoughtful analysis.

Why did you take on this role/start this startup?
I’m not sure this is relevant to my situation as I had been a marketing leader in various start-ups and companies. I took on the role at 99designs because I was excited by the global reach of the brand and the opportunity the company had to own the online design space. I especially liked the team as I felt they were good at heart.

The challenge I’ve faced in my time at 99designs is how do I evolve the team quickly and nimbly to address new challenges. The work we do now, is very different than the work we did a year ago and even the year before that. There is a fine line between staying focused on the goal ahead and being able to move quickly should that goal shift.

Do you have a mentor that you look up to in your industry or did you look for one or how did that work?
There is no one I’ve sought out or worked with over my entire career as my “mentee” needs have changed so much over the years. There are many people who have helped me along the way. For example, one of my peers at eBay, who was quite experienced and skilled in marketing strategy and creative execution, taught me what was in a marketing plan and how to evaluate marketing assets. As I have risen to leadership positions over the years, I often reach out to similarly experienced colleagues for advice on how they handle situations.

How did you make a match if you and how did you end up being mentored by him?
I learned early in my career that it rarely hurts to ask for advice. So that is what I have done. Additionally, there are people that are known to be quite helpful and build a reputation for giving back to others in advisory work. Michael Dearing, of Harrison Metal and ex-eBay, is one of those people. I, as well as countless others, have asked him for advice and guidance through the years and he does his best to oblige. Finding mentorship is about intuiting who in your universe might be willing and whether you are up for asking for help.

That being said, generally, I have found, if you are eager to learn and be guided, people will respond to the outreach.

Now as a leader how do you spot, develop, keep, grow and support your talent?
I generally look for a good attitude and inherent “smarts”. A good attitude can encompass anything from being willing to take on many different types of challenges to working well amongst differing personalities and perspectives. Smarts can be seen through how well someone’s done in their “passion areas” (i.e. areas where they have a keen interest in pursuing).

I try to hire those types of people because in smaller, fast-growing companies like many of the ones I’ve worked in, it’s more often than not about hiring flexible people as things move and change fast.

Once those people are on my team, I try to keep them challenged and engaged by making sure they have varying responsibilities. If I can’t give them growth in their current job or in the current company, I encourage them to seek growth opportunities elsewhere. I’d rather have one of my stars leave for a better growth opportunity than keep them in a role where they might grow stale.

Do you consciously or unconsciously support diversity and why?
I consciously support diversity. When I am hiring, I am constantly thinking about how to balance the team with as broad a range as possible of skill sets, perspectives, etc. to ensure we can take on whatever is thrown at us, or whatever we want to go after.

What is your take on what it takes to be a great leader in your industry and as a general rule of thumb?
I’m going to assume a great leader in my industry to mean a marketing leader in a technology company. I think a great leader in this industry is not afraid to learn new tricks no matter their age – it’s the growth mindset you may have heard about. I have a friend who inspires me to do this – she purchased the Apple Watch as soon as it was available, and was one of the first people I knew to use the Nest heating/cooling system. She’s not an early adopter by most definitions, but she adopts the growth mindset. This is the mindset I, too, have sought to adopt. In my field of marketing, it most recently has meant learning about Growth Marketing and how to apply this methodology to enhance growth. Independent of your industry, I think a growth mindset serves you well.

Advice for others?
I have been at 99designs for 3.5 years. During that time we’ve invested in elevating the skills and quality of our designer community, we’ve rebranded to reflect this higher level of quality, and have improved the satisfaction of our customers. Our next phase of growth will come from better matching clients to the right designer and expanding the ability to work with a designer one-on-one. We have the best platform to find, collaborate, and pay professional designers who deliver high quality design at an affordable price, and it’s only going to get better. I’m excited to deliver on that vision.

Pam Webber
Chief Marketing Officer of 99designs
Twitter: @pamwebber_sf

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