9 rules of innovation from Google

1. Innovation, not instant perfection 
Trial launch with a beta. Perfection can evolve

 

2. Ideas come from everywhere 
"We let everyone comment on an idea. Comments lead to new ideas."

 

3. A license to pursue your dreams 
"We let engineers spend 20% of their time working on whatever they want, and we trust that

they'll build interesting things."

 

4. Morph projects, don't kill them 
Change projects which seem no market ready into ones that market needs

 

5. Share as much information as you can

Snippets - Every Monday, all the employees write an email that has five to seven bullet points

on what you did the previous week. Being a search company, we take all the emails and make a giant Web page and index them."

 

6. Users, users, users 
Users, not money
eyeballs translate to either subscription services or advt. revenue

 

7. Data is apolitical 
Decision should be based on data and not on closeness to a person.

 

8. Creativity loves constraints 
There is always a constraint and you need to think out of the box to get over it.

 

9. You're brilliant? We're hiring 
"...wanting to work on big problems that matter, wanting to do great things for the world,

believing that we can build a successful business without compromising our standards and

values."

 

"If I'm an entrepreneur and I want to start a Web site, I need a billing system. Oh, there's Google Checkout. I need a mapping function. Oh, there's Google Maps. Okay, I need to monetize. There's Google AdSense, right? I need a user name and password-authentication system. There's Google Accounts."

 

"This is just way easier than going out and trying to create all of that from scratch. That's how we're going to stay innovative. We're going to continue to attract entrepreneurs who say, 'I found an idea, and I can go to Google and have a demo in a month and be launched in six.'"

Google Checkout, Google Maps,  Google Adsense, Google Accounts

The Truth about Pricing

The Truth about Pricing

Any Entrepreneur that's ever tried to bring a new product to market has had to deal with one frustrating fact – no one knows what to charge for it! No matter how well you think you can predict the market or how much research you've done, until people start paying for your product you're still just guessing.

Even then, when people are actually forking over their hard earned cash for your product, you still don't know if you've optimized for the best possible price to generate the greatest number of sales.

Fortunately there are some simple strategies you can employ to quickly arrive at a happy medium and give yourself a little piece of mind.

The Binary Nature of Pricing

The first pass you'll want to take at pricing is to eliminate all of the people that weren't going to pay you to begin with.

What may shock you is that when it comes to a consumer's perception of pricing, it's not always the actual amount that scares people; it's whether or not they have to pay at all. Pricing is more or less binary for consumers – they are either going to pay or they won't – the actual price is incidental.

Having launched ten companies myself, all in different industries ranging from automotive to financial services to television casting, I've found that in each case you get a group of consumers that are willing to pay just about any reasonable price for the product, and a group of consumers that won't ever pay a penny.

There's something that goes off in a customer's head when they have to pull out their wallet. Up until that point the value you were providing may have gone relatively un-noticed. But when the customer has to break out their credit card and start typing in those 16 magical numbers, they think twice about the value of your product.

Instead of developing your pricing to lure the group of people that just aren't willing to pay for your product, focus on maximizing the yield of the customer who will pay for your product. It's a lot easier to get someone to pay 10% more for your product than it is to reduce the price of your product and get more people to pay for it.

The "Freemium" Model

Next you'll want to figure out how to separate the paying customers from the non-paying customers, without alienating either.

Leave it to the overzealous Internet nerds like me to invent a word like "Freemium" to explain a basic price gateway model. Freemium is a word used to describe giving a portion of your product away for free in order to attract interest, then charging the most passionate customers for premium benefits.

I'm not entirely sure, but I think this model was pioneered by Baskin Robbins every time they handed me a free sample of chocolate ice cream in order to convince me to buy an entire cone. These days the freemium model appears when I want to sample a song on iTunes but have to pay to download the whole song onto my iPod.

The beauty of the freemium model is that allows you to test two pricing strategies simultaneously. You get to see how many customers would be interested in your product for nothing at all to gauge the overall interest in your product. It then allows you to learn exactly what about your product people are most interested in paying money for.

Try every Possible Price

Once you've separated the paying customers from the non-paying customers, you still need to settle on the right price to charge them. There's one simple answer here: try every possible price.

I'll give you an example. At Swapalease.com, a site that allows people who want to get out of a car lease to connect with people who wanted to get into a car lease, we charged people to post their car leases on-line. The problem was, we didn't know how much to charge them, so we tried every possible price.

Our early estimates figured we would probably get around $24.95 per posting on the site. We constantly tried new pricing strategies to figure out what would be the right price that consumers would accept.

Wouldn't you know that after six months of testing we found out the number was over $100 per post!

The only thing that kept us from simply making four times as much per sale was our willingness to test the sensitivity of price. Had we gone with our gut instincts we would have vastly undervalued the product and left a whole lot of money on the table.

It Pays to Try Everything

The only thing you can rely on when picking the price of your product is having to change it – a lot.

If you can develop a system to test as many possible price points with as many consumers as possible, you can hopefully uncover that hidden gem that is your perfect price. Until then, keep trying something new. It's the only surefire way to win.

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Wil Schroter is the Founder and CEO of the Go BIG Network, the largest network of startup companies and entrepreneurs at www.goBIGnetwork.com. He is also the author of the new book "Go BIG or Go HOME".

How To Select Accounting Software For Your Small Business

Posted by:Business week online on September 16

Here’s a step-by-step approach to help you decide which program can best serve your business accounting needs:

1. Determine and create a list of the specific types of accounting functions you want to perform. At a minimum, the software should handle cash disbursement and cash receipts, post all charges to the profit-and-loss statement automatically, and offer a complete reporting package. Reports should include a detailed general ledger, balance sheet, income statement (profit and loss), and cash-flow statement, as well as specific function reports for payroll and job costing.

2. Don’t pay for features and functions you won’t use. The typical small business writes fewer than 100 checks per month, makes 10 to 20 bank deposits per month, and produces 20 to 100 invoices per month. It doesn’t take a major accounting program to handle these functions, and it’s not worth it to buy a program that has lots of features you won’t use and that end up making the program more difficult to operate.

3. The most important step is to talk with other people in businesses similar to yours about what accounting software they use and what they like or don’t like about it. There is no better source for finding out about a program than those who have been using it for a while.

Gene Fairbrother
Business Consultant
National Association for the Self-Employed
Dallas

More vs. enough

	Aug 25, 2008 7:53 PM More vs. enough from Seth's Blog by Seth Godin Lesley reminds us of Herzberg's work on hygiene. It's not just theory, it's a vitally important marketing concept. It's easy to believe that joy lives on a simple curve. If you give me more of what I want, you give me more joy. If one baseball game is good, season tickets are better. If $300 an hour for consulting is good, $400 is better. Improved = more. It turns out, though, that there isn't just one curve, there are two. The second one is about hygiene. Not just being clean, of course, but being in an environment in which certain requirements are met. All the farm-fresh groceries in the world won't make you happy if your kitchen is filled with bugs. A high-paying job that delivers a screaming boss, no job security and a home life fraught with tension isn't a stable place for most people. Not because the money isn't there, but because basic "hygiene" needs aren't being met. We see this with computer hardware and software (crashing is a hygiene issue). We see it with thrift stores for food (freshness, or the appearance of it, is more important than money for many people). And we see it with every human resource issue. Next time you try to grow market share, while it may be tempting to lower price or offer more features, perhaps it's worth considering addressing unfixed hygiene issues instead.

The Power of Red

The Power of Red

via How to Change the World by GuyKawasaki on 8/27/08

 

The Pope dons red Prada kicks, politicians break out red ties in election season and that darn Netflix package always seems to stand out in a crowd of manilla and ivory mail. Why red? Do humans have a penchant for the rainbow’s most fiery color?

This study released in 2005 discovered that red-clad athletes out-performed competitors donning blue uniforms and suggested that the win discrepancy occurred because of an innate association of red with dominance and assertiveness. New research goes further in exploring the power of red. Researchers at Germany’s University of Münster threw judged competitions like tae kwon do into the mix and found that referees awarded athletes in red an average of 13 percent more points than azure-wearing sportsmen. So, why exactly does red provide such a distinct advantage?

The German study attributed their findings to an unconscious bias, but did not conclude where the bias stems from--suggesting that the reason could be as simple as red being more eye-catching. Other studies suggest that our weakness for red comes from primates’ unique color vision that in the past allowed the first humans to forage the forest and successfully locate ripe fruit. Instinctive or not, red definitely boasts some serious power.

While red might not be the color choice for a business looking to soothe and relax customers, like say a meditation studio or spa, if a company hopes to grab a bit of attention and give off an assertive message, strong shades of red might do the trick. Redbox, Red Lobster, Red Hat, (Product) Red and countless other companies have created instantly recognizable logos, websites and packaging that all appeal to our predisposition for all things scarlet, cherry, ruby, and straight-up red.

 

Small is the new big by Seth Godin

Small is the new big by Seth Godin

Big used to matter. Big meant economies of scale. (You never hear about "economies of tiny" do you?) People, usually guys, often ex-Marines, wanted to be CEO of a big company. The Fortune 500 is where people went to make… a fortune.

There was a good reason for this. Value was added in ways that big organizations were good at. Value was added with efficient manufacturing, widespread distribution and very large R&D staffs. Value came from hundreds of operators standing by and from nine-figure TV ad budgets. Value came from a huge sales force.

Of course, it's not just big organizations that added value. Big planes were better than small ones, because they were faster and more efficient. Big buildings were better than small ones because they facilitated communications and used downtown land quite efficiently. Bigger computers could handle more simultaneous users, as well.

Get Big Fast was the motto for startups, because big companies can go public and get more access to capital and use that capital to get even bigger. Big accounting firms were the place to go to get audited if you were a big company, because a big accounting firm could be trusted. Big law firms were the place to find the right lawyer, because big law firms were a one-stop shop.

And then small happened.

Enron (big) got audited by Andersen (big) and failed (big.) The World Trade Center was a target. TV advertising is collapsing so fast you can hear it. American Airlines (big) is getting creamed by Jet Blue (think small). BoingBoing (four people) has a readership growing a hundred times faster than the New Yorker (hundreds of people).

Big computers are silly. They use lots of power and are not nearly as efficient as properly networked Dell boxes (at least that's the way it works at Yahoo and Google). Big boom boxes are replaced by tiny ipod shuffles. (Yeah, I know big-screen tvs are the big thing. Can't be right all the time).

Today, little companies often make more money than big companies. Little churches grow faster than worldwide ones. Little jets are way faster (door to door) than big ones.

Today, Craigslist (18 employees) is the fourth most visited site according to some measures. They are partly owned by eBay (more than 4,000 employees) which hopes to stay in the same league, traffic-wise. They're certainly not growing nearly as fast.

Small means the founder makes a far greater percentage of the customer interactions. Small means the founder is close to the decisions that matter and can make them, quickly.

Small is the new big because small gives you the flexibility to change the business model when your competition changes theirs.

Small means you can tell the truth on your blog.

Small means that you can answer email from your customers.

Small means that you will outsource the boring, low-impact stuff like manufacturing and shipping and billing and packing to others, while you keep the power because you invent the remarkable and tell stories to people who want to hear them.

A small law firm or accounting firm or ad agency is succeeding because they're good, not because they're big. So smart small companies are happy to hire them.

A small restaurant has an owner who greets you by name.

A small venture fund doesn't have to fund big bad ideas in order to get capital doing work. They can make small investments in tiny companies with good (big) ideas.

A small church has a minister with the time to visit you in the hospital when you're sick.

Is it better to be the head of Craigslist or the head of UPS?

Small is the new big only when the person running the small thinks big.

Don't wait. Get small. Think big.

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