CEO Unplugged

Take Charge of Mobile Commerce

Hello again! I just wrote another article for Entrepreneur magazine on growth strategies for small businesses, and this time I'm going mobile.

There's a very good reason for that: over 40 million Americans use cell phones and other mobile devices to access the Internet! Those mobile users represent a big opportunity you don't want to pass up. You can help your own business tap into that market by following some simple guidelines for attracting mobile business—check out Take Charge of Mobile Commerce for some ideas.

Enjoy!

Turn Web Traffic Into Foot Traffic

Hi everybody.  It’s been a while since my last post, but I thought you’d like to see an article that I recently wrote for Entrepreneur magazine. 

I’ll be writing a monthly column for the magazine about small business growth, which is especially convenient since I’ve just gotten a fancy new title at Intuit: Chief Growth Officer.  Hopefully, besides focusing on how I can help Intuit grow, I will also be able to use this space to share my thoughts about how you all can grow your businesses. 

Here’ s a link to my first Entrepreneur piece: Turn Web Traffic Into Foot Traffic.

Enjoy!

Trying to survive the recession? Swim upstream.

I get asked by customers and other entrepreneurs quite frequently these days: when do I think the economy is going to turn around?  Of course, like everybody else, I don't have any idea.  What I do think is remarkable is how quickly things turned bad.  In one month, things went from looking slightly down to everybody slamming on their brakes.  In the explanation of this phenomenon might lie some of the answers we are all looking for.

Even in the aftermath of September 11th, consumer demand and global markets did not drop as sharply as they did in late September and on into October.  Surely the shock of 767's flying into skyscrapers was more terrifying to the average person than the failing of Lehman Brothers, an insitution whose business most Americans could not accurately describe? This makes me think that everybody was feeling over-extended and over-borrowed, and was just looking for an excuse to be afraid.  In other words, we were already afraid, but keeping it inside, and as the house of cards started to wobble everybody started blowing.  Carrying large balances on credit cards, buying houses we couldn't actually afford, having to spend $100 to fill up our tanks--it all just got too overbearing.  Suddenly, being reasonable and responsible felt better than trying to be cool and keep up with the Joneses.

But this national psycho-reversal, assuming it happened, still doesn't explain the supposed complete suspension of consumer demand.  Perhaps it was the reporting of the initial "smoke" of the financial crisis by the 24 x 7 media (yes, especially the bloggers) that actually fanned the flames into an inferno?  For those of us who haven't lost our jobs, what has actually changed about our purchasing power?  Gas is 50% cheaper than it was two months ago.  Everything is on sale at the shopping malls.  It hasn't been this cheap from an inflation-adjusted perspective to buy a house in over a decade.  Your dollar even goes further overseas.  So, if your income is still the same, your purchasing power has almost doubled!

The answer is, I believe, that we live in more of a fear-based economy than ever.  When people are afraid of what lies ahead, they examine every behavior, every purchase, every career decision.  They also stop taking risks with their money and their jobs. 

So, if you're like me, you're wondering what this all means for the future of entrepreneurs and small business owners.  First, consumers are definitely cautious, and buying their necessities plus a few low-priced forms of entertainment (good for movie theaters, Walmart and Hooters, not so good for luxury resorts and high end restaurants).  Second, there are fewer businesses taking risks or spending "into the wind."  Which means, there is an opportunity.

If you can find a way to tailor your products and services to meet the needs of the cautious consumer, it has never been cheaper to advertise your services and build your products.  Employees are just looking for a steady paycheck and good benefits.  Customers want great value, and even better service.  Media outlets of all kinds are dying for your advertising dollars, no matter how small.

The businesses who will survive this downturn are the ones with real customer bases, great value, and high quality products and services.  The businesses who thrive at the end of this downturn are the ones who will find opportunity and hope where everybody else sees downturn and dispair. 

As my grandpa used to say, when you're swimming upstream all you have to do is open your mouth if you want to catch the fish. 

--jsk

Starting a business today

If I were starting a business today

I often get asked by our customers, friends and colleagues for advice with a business that they are starting.  How would I go about starting the business?  solving some specific problem?  finding the right talent? devising a growth strategy?  they ask.  I often feel like a bit of an impostor when I answer, because the truth is that I don’t have a lot of generic business experience—just experience at one company, in one specific industry, and one point in time.   Most of what has worked for our business over the years has been random luck, the third or fourth try to solve the same problem, extremely basic “blocking and tackling,” or some combination thereof.

The rest of what I know about starting and running businesses has come as an advisor, board member, or observer.  It is often from this perspective—as a more distant viewer—that I see the simple things most clearly.  When you are down in the muck of the day-to-day operations, you often miss the forest for the trees.

So,  after years of trying to give some useful advice to fledgling businesses, I have developed a few “truths” that I’m pretty sure any new business should ignore at their own peril.  At the least, these are the things I would do if I were going to starting a business tomorrow:

1.       Think web first.

2.       Have a human capital strategy.

3.       Find a channel, then build a product—not the other way around.

4.       Plan now for success—or it will never come.

5.       Raising money is not your biggest problem, being able to spend it appropriately is.

6.    You're not thinking big enough!

I will be posting on each of these topics in the near future, but if you have suggestions or questions on these topics, let me hear them.

--jsk

Wooden pens

I spoke to a homestead customer the other day who makes beautiful "turned" heirloom wooden pens and bowls.  The customer had some gripes which he emailed me about, so I called him back.  I can't stress enough how important and beneficial it is to engage customers who have complaints or issues with your service or product.  Think of each customer who reaches out to you as a gift--worth much more than whatever cost you incur to speak with them, resolve their issue, and/or refund their money.   

I try to personally respond to every customer who emails me (sometimes over 100 per week, so I can get behind!) but I typically call ones who have complaints--as long as they are reasonable and constructive.  This is where I learn the most, not only in the many ways we could be better serving our customers, but also in improving my understanding of work our employees do on the "front line."  This latter point can be crucial, as our failure to empower them with the proper tools/products/policies handcuffs their ability to delight our customers.  And it's very easy to lose touch as your company grows and you're busy "at the top."

But back to wooden pens.  One thing that struck me as I was talking with the wooden pen maker was this: he wasn't going to be happy, no matter how great his website was (it was actually pretty great), until it actually started delivering him real revenue.  And his definition of real revenue was pretty significant.  He wanted to know why he wasn't first in the Google search for "wooden pens," why he couldn't easily create back links, why his SearchLight campaign had "salad bowls" as a word when he didn't make salad bowls, etc.  Reasonable but challenging demands.

The "aha" moment for me was that no matter how hard we try to be the best "DIY website" company out there, what our customers actually need is for us to be a "DIY online business success" company.  Now, there is no way we can single-handedly make small businesses successful online--they need quality products, business sense, a marketing plan, and a lot of entrepreneurial drive.  But there is so much more we could be helping them with, above and beyond building a website.  So I'll promise right here and now that we will dedicate much of our product resources over the coming years to helping our customers not just build websites, but build successful businesses.  And I think I'll start with our customer who makes such beautiful wooden pens: click here to check out his work.

--jsk 

Happy 10th Anniversary Homestead!

We just hit a big milestone here at Homestead: 10 years in business!  Technically, we didn't launch the first version of Homestead until January 1998, but we use October 1st as our official birthday because it lines up with the anniversary of the original company, KartoffelSoft.  I started KartoffelSoft on October 1st, 1994, so it's the 13th anniversary of our company if you trace it back to the very beginning.  It's amazing how far things can progress once they gain a momentum of their own.

KartoffelSoft was an educational software company that paid the bills by "bootstrapping" (read: doing anything that was legal for money) while we tried to invent great software that would free us from the indentured servitude of technical consulting.  All these years later we've built something quite different than what we set out to do, but in many ways it is much more exciting and bigger than our original dreams. 

Maybe there is a lesson there for aspiring entrepreneurs?   You rarely recognize the true "big idea" at the beginning, but if you don't start somewhere you are guaranteed to get nowhere.

Happy Birthday Homestead.  A sincere "thank you" to our hundreds of employees and millions of customers who have been a part of our journey so far!

--jsk

Goodnight PhotoSite

While I've never gone all the way through the process of selling a business, I approximated that experience in 2005 when we decided to sell our PhotoSite division to United Online.  Thus it was particularly upsetting when I received (along with about 700,000 other PhotoSite users) an email announcing that UOL was shutting down PhotoSite at the end of September. 

I was so bummed about it that I composed a song for the Homestead talent show entitled Ain't No More Photosite to the tune of Pink Houses by John Mellencamp.  I tried to make it funny but it turned out just sounding depressing.  When I think of the literally thousands of hours we all spent making that product the best photo sharing product on the market (if I do say so myself), it's hard not to be depressed.

The moral in this story?  Sometimes you make the right business decision on paper but you can never predict all of the ramifications.  I would probably still make the same decision today given the same situation that we faced two years ago, but I wish I had given more thought to this scenario.  There were two scenarios that I thought were the most likely outcomes: 1) PhotoSite would explode in growth, and we would regret having sold it; or 2) PhotoSite's growth would stagnate due to market conditions or poor handling, and it might meet an untimely death.  I just never thought #1 would lead to #2 (PhotoSite grew about 400% in the 2 years after we sold it).

I have no other great insights here, except to say that I'm very sorry to all of my fellow PhotoSite users for the trauma of potentially losing the online photo collections we all spent so many hours meticulously crafting. 

IMPORTANT NOTE FOR CURRENT PHOTOSITE USERS:

For those of you who don't find Snapfish adequate for your photo-sharing needs, you might consider SmugMug as an alternative.  Note that SmugMug is not free, but they have offered to give all PhotoSite customers a 50% first-year discount (use the discount code photosite when signing up).  We always felt that SmugMug was the best competitor to PhotoSite, and they have continued to innovate and improve in the past two years.  They seem to run an impressive operation.  For what it's worth, I have decided to move my 6000+ family photo collection there. 

Smugmug is working on a migrator that will automatically grab all of your photos from your PhotoSite account, but it won't be ready until October.  Note that this will still work until June 2008, even though your PhotoSite will no longer be viewable to the public after September 27th. 

In the meantime, a PhotoSite fan wrote a program that you can run on the computer you have PhotoSite installed on, and it will upload all of your photos to a SmugMug account.  Many folks have already used it successfully, and it has the big advantage of moving all of your high resolution photos from your computer, even if you never uploaded them to your PhotoSite.  Just be warned that a) the interface isn't very pretty and b)it can take a long time if your Internet connect is slow (mine took over 24 hours). 

Click here to install the PSmugMug Migrator application.  When prompted, you'll need to hit "Run" twice in a row, and then you should be able to launch the application from your desktop.  Please read the instructions carefully on the first screen that appears.  Also note that you will need to create a trial account at SmugMug (no credit card required) before you begin.  If you can't get this to work, just wait until the official SmugMug migrator is finished (I'll post instructions on my blog when it's ready).

Long live PhotoSite.

--jsk

An entrepreneurial metaphor

I was excited to be part of a the Think Tomorrow Today conference put on by ThinkEquity (an investment banking firm) in Half Moon Bay, CA last week.  I was on a panel entitled "Managing Innovation" along with Mike McCue (CEO of TellMe, recently acquired by Microsoft) and Jonathan Rosenberg (SVP at Google) to talk about the challenges of driving innovation within organizations of all sizes.  All three of us commented that we have tried to preserve the innovative spirit in our companies that we had when we were smaller--perhaps a hidden message to the smaller companies out there that there is no time like the present to push the envelope by innovating?

During our hour long conversation we kicked around a few metaphors for innovation, and how it differs from invention or idea-generation.  The one I liked best contrasted the easiness of coming up with ideas with the difficulty of nurturing those ideas into successful ventures.  Essentially, you can think of ideas as seeds.  If you've ever spent any time in a gardening store, you know that seeds are quite cheap.  You can get dozens of organic heirloom tomato seeds for $2.99.  But if you want to get a single seedling of the same variety, you'll pay the same price.  Go to the farmers market down the block in August (where you can choose from dozens of heirloom varieties) and you might very well pay $2.99 for a single tomato!  Full disclosure: to my wife's great amusement, for some reason I actually buy seeds to try and grow tomatoes from scratch over the winter, still buy tomato seedlings every spring (nine varieties this year in our garden!) and still buy several pounds of tomatoes at our farmer's market every week during tomato season. There is no rational explanation for this behavior.

Or consider Japanese maple trees.  I am especially fond of Japanese maples.  You can find beautiful specimens on almost every block where I live.  No owner objects to you collecting the seeds that come in little pods around this time of year.  However, if you want to buy a one year old tree of even the most common variety of Japanese maple (less than 12 inches tall), you'll pay $50.  If you want to buy a five foot high tree (about seven years old) you will pay between $500 and $2000.  Mature trees of eight or teen feet in height can cost between $15,000 and $25,000!

The difference between those tomato seeds in the little packet or collecting Japanese seed pods, and actually getting a perfect tomato plant or a stout Japanese maple; that is the difference between ideas and innovation.  Anybody can come up with ideas--they are not only a dime a dozen but, like the seeds, very difficult to get to the next level.  Deciding where to plant them, how to condition the soil, how much sun and water to give them, and giving them constant love and attention--that's the hard part.  That is innovation, and it's the major thing that entrepreneurs do.  It's also what we strive for every day at Homestead, and it's a fun and rewarding way to spend your professional life if you ask me.  It's also dirty, hard work, and takes a lot of patience before you see the rewards.  But trust me (and Mike from TellMe and Jonathan from Google), it's worth it.

In other words: it's not the idea, it's what you do with the idea that matters.  So get out your metaphorical gardening gloves and get dirty!

--jsk

Is Your Business Dead?

Thanks to everybody who joined us for the 2007 Small Business Summit in New York City last week.  It was fantastic to see 350 small business owners in one place, especially when so many of them were Homestead customers!  I am always inspired by the passion and creativity that you all put into your businesses and organizations on a daily basis.

For those of you who couldn't make it, I thought I would share a few of the highlights from my speech, entitled Your Business Is Dead and You Don't Even Know It.  My point was that starting a business today is more risky, but also more exhilarating, than ever before.  All because of this little thing called the Internet. 

Even twelve years ago, when I started my business, it was significantly easier to survive than it is today.  Big companies acted like big companies, only going after the giant targets, leaving a lot of smaller targets for small companies.  If you could provide a unique value proposition, with great customer service, you could survive.  However, making it big was harder, because it took a long time and a LOT of money to extend the reach of your products/services and build the necessary infrastructure.  Neither of those things is true anymore.

Today you can look big fast because of the internet.  You can get big-company infrastructure for cheap...again, because of the internet.  You can reach the entire world, 24 x 7...because of the internet.  However, big companies are now offering amazing levels of service, flexibility, and customized products... all because of the internet.  The "long tail" theory is giving niche products a much bigger marketplace, but big companies are now able to justify competing in those niches. 

So, if you can leverage the internet, your new business can get ahead like never before.  If you ignore the internet, you're dead before you know it.  Here are ten signs you are in the dead category:

1. You think the internet is a coming revolution. Sorry to break it to you, but the revolution already happened. How often do you use the yellow pages compared to five years ago?
2. You still don't have a website.  Unless your business is less than one month old or you are intentionally trying to make this hard, you have a major problem.
3. You have a website, but you don't know how to change it.  A website that doesn't change frequently is dead.  And a dead website is a dead business.
4. You acquire less than 1/2 of your customers via the internet.  Over 1/2 of your customers are looking for you online, so who is getting your share?
5. You think your website is just for acquiring new customers.  Most businesses earn over 50% of their revenue from repeat customers.  Is 50% of your website dedicated to driving repeat business?
6. You think your business is local.  Flower shops, travel agents, tax preparers, bookstores, all thought they were local businesses.  Guess who dominates those categories now?  'Nuff said.
7. You think your website is just for the "front office."  More and more "back office" services are being offered on the web: payroll, voice services, accounting, marketing, etc. all can save you time and money and help you compete.
8. You think your website is your internet strategy. Without connections to lead sources, comparison shopping engines, online communities, search engines, mobile services, other websites or blogs, etc. you are living in a Field of Dreams.  Trust me, if you just build it, they will NOT come.
9. You try to hide that you are a small business.  Don't hide it, small is beautiful.  The internet can help you provide big company value, but customers still want small company service.
10. You take all of my advice (or anybody else's). No two businesses are the same, so you have to figure out for yourself exactly how the internet can help your business.  Test, learn, improve. 

There you have it--I saved you a trip to icy New York.   Thanks again for all of the wonderful support from those of you I met in person, and I look forward to meeting many more of you in the future.  Maybe they'll take the Small Business Summit on a nation-wide tour?

--jsk

Let's meet in Times Square!

I'm honored to be a Keynote speaker at the 2007 Small Business Summit, taking place on February 13th at the Crowne Plaza Hotel on Times Square (in New York City).  This is a great conference where small business owners and "pundits" get together to discuss growth strategies for small businesses.  I'll be kicking off the conference with a talk on Why Your Small Business is Dying and You Don't Even Know It.  Provocative title, no?

Executives from companies like Symantec, Intuit, Terracycle and Wealthstream will be there, as will small business  "gurus" like John Jantsch of Duct Tape Marketing, and Anita Campbell of Small Business Trends.  The entire thing is put on by Ramon Ray, of smallbiztechnology.com, who has his finger on the pulse of all the latest tools and technologies that small business owners should be leveraging.  You can register here.

Also, I'll pay the entry fee ($149) for the first ten of you who email me describing your business and why you'd like to attend.  If you don't live in the New York area I'll kick in $200 towards your travel expenses as well.

I hope to see some of you in a few weeks on Times Square!

--jsk