Zambesi https://zambesi.com Leaders from high-growth companies for training & consulting Fri, 01 Nov 2019 15:59:33 +0000 en-AU hourly 1 https://wordpress.org/?v=5.5.3 https://zambesi.com/wp-content/uploads/2018/11/cropped-Untitled-design-17-1-3-32x32.png Zambesi https://zambesi.com 32 32 8 reasons startup founders fail even when their businesses succeed https://zambesi.com/8-reasons-startup-founders-fail-even-when-their-businesses-succeed/rebekah-campbell https://zambesi.com/8-reasons-startup-founders-fail-even-when-their-businesses-succeed/rebekah-campbell#comments Sun, 28 Jul 2019 22:05:27 +0000 https://zambesi.com/?p=932  

We meet a lot of excellent founders at Zambesi. They come to us to spend time with leaders from companies like Canva, Facebook, Showpo, TEDxSydney and Koala to learn how to grow their start-ups, pitch their ideas, make sales, lead teams and raise capital. Our mission is to help these founders build successful businesses.

Lately, I’ve begun to notice more and more founders in a new category. Great people, with great ideas who’ve done all the right things and who have built successful businesses; but at the end of it, get nothing. Or worse than nothing, they’ve endured several years of stress, relentless hours and low or no pay. They’re burnt out, disheartened and broke.

Unlike our regular articles, this post will not help you grow your business. Instead, we’ve interviewed four industry heavyweights including Peter Dunne of Herbert Smith Freehills, David Kenny of Hall Chadwick, Alan Jones of Muru-D and M8 Ventures and My-Linh-Dang of Metis Law. They advise our most successful founders, as well as many who haven’t been as fortunate.

We’ve compiled a list of the top 8 watch-outs that could lead to you losing out as a founder. We haven’t covered topics like running out of money, failing to grow, missing out to a competitor, burn-out or any of the myriad of reasons why your company might not succeed. Instead, we’ve focussed on what to watch out for in deal making that could lead to you losing personally even if your business is successful.

It’s important to note while some of the watch-outs are avoidable (like not having proper co-founder and shareholder agreements in place), many will be inevitable when you raise capital (possibly liquidation preferences). We hope this article will help you to be more aware of the potential impact of some of clauses in shareholder or fundraising docs. It’s also important to note that there are lots of other pitfalls in fundraising – these are eight big ones – but it is not a complete list. You should always seek legal advice before entering into company founding, shareholder or funding agreements.

**Please add your own experiences or any other watch-outs that you think are relevant in the comments below.

Founders are naturally optimistic. I’ve been guilty of skimming over dangerous terms when negotiating investment. I believed that my business would do so well and that the investors were all such lovely people that none of the scary clauses would ever come into effect, and we needed the money! This naive optimism seems crazy in retrospect.

We’re running an event in Sydney to discuss this topic on Wednesday 31 July from 4.30 – 6.30pm at Hall Chadwick. Tickets are $10 and include drinks / $5 with the code ‘ZambesiMember’. You’ll meet the experts, hear real horror stories and have the opportunity to ask questions. Register here

8 founder traps to watch out for:

1. Co-founder fall outs

My-Linh Dang runs Metis Law, a boutique commercial practice specialising in early-stage start-up, capital raising and mergers and acquisitions. My-Linh advises Ability Map, Neighbourlytics, Open Sparkz and Zambesi.  According to My-Linh: “The number one call for help we get is co-founder break-ups. Two friends will have started a business together in good faith. They’ve both worked hard, seen some success and now one wants the other out. Perhaps they disagree over strategic direction, one might feel like they’re contributing more than the other or one person might want to leave for personal reasons. Co-founder fall outs are horrible because there’s usually so much emotion and blame involved. It destroys relationships and often destroys the company.

“That’s why it’s so important to put in place a co-founder agreement upfront. This is a simple document that should outline the responsibilities of each person, how important decisions are to be made (will one founder have veto rights over certain decisions), vesting provisions for shares (usually four years), what happens if one founder wants to leave and what happens to their shares after they leave.” 

Peter Dunne is a partner at Herbert Smith Freehills whose roster includes Atlassian, Canva, Safety Culture, Campaign Monitor, Deputy, CultureAmp and many more. Peter says: “I used to be against founder vesting. If you’ve built your company together over several years, then you should own your shares. 

“It’s different for founders in the early stages of a company. Going into partnership is a leap of faith and giving equity to someone who doesn’t deliver is a huge risk. An investor will usually insist on founder vesting because they’ll want to know that all founders are motivated to stick with the business. And if you’ve had someone leave and they still own a chunk of equity then it’ll be harder to raise capital. An incoming investor will want you to ‘fix the cap table’ which can be difficult or impossible if the person has left the company.”

2. Too many shareholders can kill your business

It’s common for founders to be loose with equity at the beginning of a business. When I started Posse, which became Hey You, I gave shares to the guy who made our first logo, a family lawyer, web developers, a recruiter and several advisors. I’m sure if the office cleaner had asked for equity in lieu of fees, I would have agreed. There were 23 different investors in the first capital raise, and some wanted to split their shareholding between multiple entities. Before I could say ‘minimum viable product’ we had 50 shareholders and had to become a public company! Managing so many shareholders was not only difficult and time-consuming, it actually almost led to the collapse of the business.

Peter Dunne says: “Founders need to be careful of bringing onboard too many Angel investors early on, otherwise you can waste a lot of time giving investor updates. And if you do put together a group, then agree on one person to be the conduit. Send a quarterly update to everyone else.”

There are a few important things to consider as your cap table expands.
– Without special provisions in place, any single shareholder can hold the business to ransom. Most shareholder agreements are drafted so that 100% of shareholders are required to sign-off on amending the agreement. You might have agreed that X% of shareholders or just the board can sign-off on issuing capital, but often an incoming investor will require changes to the shareholders agreement itself – which means 100%. It may be possible to avoid this by having small shareholders sign Power of Attorney docs early on. Peter Dunne and My-Linh both recommend you seek legal advice to try to avoid this very common issue.
– A company with more than 50 shareholders must convert to become a public unlisted company. This happened to us and it was a huge headache. Our company needed to be audited every year which cost a lot, took loads of time and added no value to the company. There are a number of other annoying implications of converting to a public unlisted company outlined in this article by LegalVision.
– Investors hate messy cap tables. I’d often give great investment pitches and shudder at the end of the meeting when the investor would ask: ‘Send us the financial model and the cap-table’. I knew what the reaction would be. ‘How do you manage all these people?’ Investors like clean cap-tables so, going forward, they know they’ll be able to work with the founders to build the business, bring in further capital if required and make decisions without having to get consent from a phone book of shareholders. And if you’ve accidentally become a public company, like we did, that automatically rules out a lot of corporate investors and funds whose mandate blocks them from investing in a public company.

3. Too much dilution

Again, it’s easy to give away shares early on because the business isn’t worth anything. David Kenny from Hall Chadwick provides strategic advice to a huge number of start-ups and is an investor in Blackbird and mentor to Startmate. David says: “I constantly see inexperienced investors take too much equity early on. They’ll set onerous terms and often put in place a complicated structure.

“It’s likely that a company will need to raise several rounds of capital and create an Employee Share Plan so the founder is going to get diluted right through the life of the company. If you give away too much early-on, then it’s easy to become whittled down to 10% or 20%. At some point, this will be demotivating, and you’ll wonder if the company is worth it when you could start something new and own 100% again. Future investors will want to ensure the founder has a significant enough stake in the business to continue to drive it. If a founder is down at 10% then that’s a huge red flag and can make it difficult to raise further capital.”

4. Investor veto rights

Incoming investors will almost always ask for veto rights over certain decisions. They’ll present you with a huge list upfront and it’s a process of winding back this list throughout the negotiation. Peter Dunne says: “Be very careful which veto rights you agree to. Never give the investors the right to veto issuing shares. This could block you from raising further capital from external investors.

“Before you offer any other decision-making veto rights you have to ask what the investor can add to the business plan that the founders can’t.” My-Linh adds: “It’s dangerous to give veto rights on running the business (business plan, key hires, budgets etc) to someone who isn’t working in the business day-to-day.”

“A professional CEO is a steady hand who will lead your company into a slow, calm, neatly managed death.”

5. Board control and replacement of the founder

Alan Jones is a Partner at M8 Ventures and mentor to Startmate, Muru-D and Blue Chilli. He was a founding team member at Yahoo! Australia and has more than a decade’s experience working with founders. “One of the top catastrophes for a founder is to be sidelined in their own business. This usually happens because they’ve given board control or a veto right over the appointment of the CEO to inexperienced investors.

“At the start, everyone is excited by the opportunity of the company. But when there’s a set-back (and there’s always something), the wrong investor will switch from being driven by opportunity to being driven by risk. They might try to liquidate too early or move a founder out to bring in a CEO they perceive as being experienced. This almost never works.”

If your board is considering replacing you with a professional CEO then check out this excellent post by Andreessen Horowitz on why they prefer founder led companies. They argue that a professional CEO will only maximise the existing product but won’t have the insight, risk appetite or moral authority to make sweeping innovations when required. And that innovation is the core competency of the business. A professional CEO is a steady hand who will lead your company into a slow, calm, neatly managed death.

Another issue is that a professional CEO is a red flag to future investors and could make it difficult to raise capital. Many funds will only back founder-led companies for the reasons mentioned above.

Alan’s advice is to make sure that you develop strong relationships with investors before you let them become shareholders in your company. “If investors insist on a board seat then make sure you either retain control of the board or, that there’s at least one credible experienced ‘safe pare of hands’ on the board. For example, if you can get investment from one of the top tier funds like Blackbird or Airtree, then you’d want one of those partners on your board. If you can’t get one of these funds onboard then find someone of similar calibre, form an advisory board and have them attend meetings as a board advisor. If you’re working with inexperienced investors, then you need to make sure there’s an experienced, sensible person at the table when the conversation gets tough.”

David Kenny adds: “I’ve seen too many companies get stolen from under the founder’s eyes. There’s a lot of naïve investors and founders who will put in place a board too early. A formal board before Series A is overkill.”

6. Convertible notes

A convertible note is short-term debt that converts to equity, typically in conjunction with a future funding round. The investor is effectively loaning the start-up money in return for the principal plus interest. Convertible notes are typically used in two scenarios: very early stage companies who don’t want to put a valuation on their idea and later stage companies who need to bridge financing between funding rounds.

In the very early idea stage of a start-up, it can be difficult to place a value on the company. The founder will think their idea is genius and worth a lot, and an investor might think that while the founder and their idea are promising, the company hasn’t built or proven anything yet and therefore isn’t worth much at all. Using a convertible note, instead of an equity round, can put off the valuation discussion till later when the next lot of investors, typically at Series A stage, will value the company. The founder and seed investor will agree that the initial funding will be on the basis of a convertible note (loan) that converts at the time of a Series A investment. Usually the seed investor will get a discount to the Series A investment (usually up to 20%) to reward them for taking a risk early on.

In the later stages of a business, founders will use convertible notes to bridge finance the company between funding rounds. Perhaps fundraising is taking longer than hoped and they need to bring in funding quickly, or perhaps the company is on the verge of launching a new product or partnership and wants to put off capital raising discussions till this happens. A convertible note is usually much easier to raise because it’s a loan with a pre-set time period. If the founder raises capital within the set time period, then the loan + interest will convert to equity at the valuation of the incoming money, again, usually at a discount.

The risk here is that founders are often optimistic about how long it will take them to close the next round of funding. My-Linh says: “It’s common for founders to underestimate how long it’ll take for the next funding round to close. If they miss the deadline then there’s a risk the note holders could call their loan and force the company into liquidation. They could sell the business just to get their loan back. We always try to renegotiate terms at this point, but the founders and the business is in a poor position.”

7. Liquidation preferences

Most investors will ask for a liquidation preference to protect their investment. In Australia, a 1X preference is standard. This means, on a liquidation event (any type of exit) the investor is able to have their money returned before any other shareholder (including the founders). If the company does well, and the return to the investor is to be greater than the amount they invested, then the return is spit according to the share register. But if the investor’s share of the exit is less than what they invested, then they can take the amount they invested out first before the remainder is split between other shareholders (including founders).

The investor’s argument is that they are risking their money. But the founder’s argument should be that they are also risking a lot – time, sweat and most likely significant forgone income. Why should the investor be protected over the founders, the employees and the early Angel investors?

David Kenny says: “The risk with liquidation preferences is that the company can actually do quite well; as the company grows the board will want to raise more and more money. Then the company might sell for $20M – probably not what everyone hoped but not a bad result. If the company has raised say $17M or more in capital, the investors will get their money back. The people who worked for years on peanuts and built a good business walk away with breadcrumbs or nothing at all.”

My-Linh says: “We come across this issue all the time. When there’s liquidation preferences in place and the company has raised significant investment, unless the exit is really big, the early investors and the founders end up with very little if anything.”

8. Understanding your cap table and the implications of how shareholding and rights play together

My Linh says: “A lot of founders don’t understand their cap table and how a change in levels of ownership impacts the rights in their shareholders agreement. For example, if you’ve got a drag-along right set too low (at say 50%) then you need to watch out for groups of shareholders whose ownership together reaches this point. If these shareholders have a liquidation preference, and no-one else does, then they could sell the company at a low price just to get their money back.”

My-Linh, David and Alan all echoed the same sentiments. “Founders are way too optimistic about how long it’ll take to raise money, to make sales, to hire key team members and to grow their business.” They’ll often leave fundraising until they’re desperate and accept bad terms, often from inexperienced investors. They’ll take-on a convertible note, believing they’ve given themselves enough time to close a subsequent round. They’ll be sure their company will be so valuable that a liquidation preference won’t matter, and they’ll seed board control and veto rights to investors who seem super nice and friendly people who are excited about their company.

The number one tip of our panel is to reference check an investor before you sell them an ownership stake in your company. Alan Jones adds: “Don’t just talk to the companies that they’ll direct you to. Go and find founders they’ve worked with that haven’t done well. Perhaps the company folded, or a professional CEO was brought in. Find out how this happened and how the investor acted under pressure. Did they take advantage of any veto rights to take more ownership in the company, did they continue to support the company in future funding rounds and how did they interact with the founders when the business faltered?”

To learn more from our panel of experts, come to our ‘Don’t get screwed’ event at Hall Chadwick on Wednesday 31st July. Tickets are $10 or $5 with the code ‘ZambesiMember’.

For an intimate workshop to plan your capital raising strategy which includes a small group legal discussion with My-Linh, join Rebekah Campbell’s ‘Raise Capital on your terms’ workshop in Sydney, Melbourne and Brisbane.

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How to run effective Facebook ads https://zambesi.com/how-to-run-effective-facebook-ads/tim-hill https://zambesi.com/how-to-run-effective-facebook-ads/tim-hill#respond Sat, 20 Apr 2019 08:25:17 +0000 https://zambesi.com/?p=876  

When I launched Zambesi, I’d never run Facebook ads before. I was a solopreneur working from home. At Hey You, we had teams of people to run marketing and sales. Now I’d have to learn Facebook advertising and digital marketing from scratch.

I built the first WordPress site myself and created my capital raising workshop as a test. Other business education companies advertised on my Facebook feed. But how did they get there? I signed up to an online course to learn Facebook basics but couldn’t keep up. When I found the Facebook Ads Manager page, my face contorted and froze like The Scream painting. WHHHHAAATTT ISS TTHHHISS???? Where do I start?

’18 months ago, everyone was doing interest-based targeting. This doesn’t work so well anymore.’ – Tim Doyle, Former Head of Marketing, Koala Mattress

A friend was kind enough to let me screen share to help get my first campaign up and running. It helped to have someone who could see what I was seeing and point out which buttons to press.

For the first nine months I ran amateur campaigns. Simple image and text ads for each workshop that pointed to the appropriate course page on Zambesi.com. I found a freelancer to put the Facebook pixel on my website. I measured the number of clicks from my ad to the course page. Our sales happen on Eventbrite and I didn’t know how or if I could track all the way through.

I’d notice the occasional happy Eventbrite order notification in my email and assume the Facebook ads were working; which they probably were but it was a guess. I’d keep track of what I spent on each course and usually stayed under budget.

I know what you’re thinking. ‘She is an experienced entrepreneur. Why is her knowledge of social media advertising so primitive?’ It’s a fair point. The truth is that it’s quite difficult to use Facebook effectively. Other founders might be brilliant at it. But I still find it challenging!

Up until August 2018 my workshops sold nicely. I used the ‘Interest targeting’ in Ads Manager (in the Ad Set step) to find the right audience. For example I’d target people interested in ‘fashion design’ or ‘jewellery design’ to promote ‘How to manufacture products in China’, I promoted ‘Mahesh from Airtasker’s ‘People and Culture Masterclass’ to people who worked in ‘Human Resource Management’ and I’d target people living within 10km of the Sydney CBD with incomes above $100K to advertise Stephen Scheeler’s ‘Digital Disruptive Leadership’. Yes, it was unsophisticated, but all the workshops sold out. I had a good business.

But not for long. In the fourth quarter of last year either Facebook changed something, and my ads stopped working OR my ads had never worked in the first place and there was a shift in the market that made it more difficult to sell tickets. I worked out how to put my Facebook pixel onto the order confirmation page of Eventbrite to track ad performance through to purchase. This confirmed that the ads weren’t generating sales.

‘That is the most ineffective Facebook ad you could possibly make. Static image and short text is the worst performing ad format.’ – Tim Doyle (about our Zambesi ads)

I decided it was time to figure out Facebook advertising properly and turned to Tim Doyle from Koala and Tim Hill from Social Status for advice. Tim Doyle runs the ‘Ruthless performance marketing’ workshop on Zambesi and Tim Hill runs ‘Social Media Bootcamp’. I attended both of the workshops and I’m thrilled to share that our Facebook and Instagram ads are now firing!

In this article, I’ve outlined what I was doing wrong and how I’ve adjusted our creative, the way we build audiences, how our funnel works and how we measure the effectiveness of every campaign. I recommend attending Tim Hill’s ‘Social Media Bootcamp’ for face-to-face support to set up and optimise your Ad Manager account and Tim Doyle’s ‘Ruthless Performance Marketing’ to learn to create effective ads on mass and turn social media advertising into a revenue machine. Mark Baartse, CMO at Showpo also runs an excellent tactical workshop ‘Brilliant Digital Marketing’ which covers a broader spectrum of digital marketing channels including SEO, SEM and LinkedIn.

‘Every start-up should use customer reviews as ad creative for the first 12 months.  Social proof is the best way to build trust in your product.’ – Tim Doyle, Koala

If you’re struggling with this now and can’t wait till the next workshop, or if you can’t make it to Sydney or Melbourne, then contact us and one of our consultants can support you to set up and optimise your Facebook and Instagram campaigns via screen share.

What’s in this article:

  1. Setting up your account: Ads manager, Campaigns, Ad Sets, Ads and the Facebook Pixel.
  2. Finding your audience: who should move away from ‘interest’ targeting and better way to target and find your audience on Facebook.
  3. How to build a funnel all the way though to sale. Why the ‘mid-funnel’ is the most important part of Facebook advertising yet most marketers put the least time into it. Note I didn’t even know what mid-funnel was before the workshops!
  4. What creative to use at different points in the funnel. There’s one Facebook ad creative that every start-up should use in the first 12 months.
  5. Tactics to optimise your ad budget.

In this article I’ve referred to Tim Hill as TH and Tim Doyle as TD so we don’t mix up Tim’s.

 

1. The basics
Note that if you’re experienced in Facebook advertising then feel free to skip this part of the article. Start with ”2. Finding the right audience’ for lots of tips from TD & TH about how to adjust Facebook campaigns and ad creative get the most out of your advertising in 2019 (see below).

Ads Manager page. The place to manage your ad account is: https://business.facebook.com/adsmanager You can add people to your ad account by going to ‘Settings’ from this page. If you want to let someone else on your team place ads for you then you’ll need to add their personal Facebook account to your Ads Manager account.

 

Campaigns: A campaign should be used for a single objective. For example, ‘Website traffic’, ‘Leads’ or ‘Conversions’. You can’t have multiple objectives in the same campaign. For Zambesi I might run one campaign to generate traffic to my ‘Pitching Masterclass’ page. The objective here is traffic to the page. Then a second campaign for ‘Conversion’ which is to get sales. More about retargeting later.

Ad sets: This is where you define what audience to show the ad to, where to place your ads inside Facebook / Instagram and set your budget. It’s common to have multiple Ad Sets running in one campaign to test and optimise the conversion rates of different audiences.

Ads: You can run multiple ads in each ad set including video, static image and carrousel creative.

Facebook pixel: Go to Settings to create a pixel for your website. This is a few lines of code that sits on your website and will tell Facebook when and who is visiting. At first, I thought I needed a different pixel for every page but discovered I only needed one pixel and then I can track who reaches different URLs. For example, you can see how many people get to a checkout page but don’t complete and then retarget these people to get them back.

It’s essential to install the pixel before you start Facebook advertising. Some sites like Shopify make this really easy and there’s a spot in your Spotify settings to add the pixel. I needed to get a developer to do it for me. TH sets up everyone’s Facebook pixel in the first hour of his Zambesi Bootcamp. We have consultants who can help if you’re stuck.

 

2. Finding the right audience

As I mentioned earlier, for the first 9 months of Zambesi, I used interest-based targeting. It’s well known that Facebook has changed the parameters of interest targeting and it’s no longer very effective.

In his ‘Performance Marketing’ workshop, Tim Doyle (TD) recommends that a much better way to target is to build an audience and then create lookalike audiences through Facebook. ’18 months ago, everyone was doing interest-based targeting. This doesn’t work so well anymore. Lookalike audiences are much more effective.’ At Zambesi, we used two ways to build lookalike audiences.

Email list: Build an email list of a minimum of 1000 email addresses and upload the list into your Facebook Ads Manager account. Facebook can analyse the email addresses and will target your ads to people with similar profiles to those on your list.

• Tip: The Zambesi email list now has more than 10,000 subscribers. But not all of them open every email. Rather than load the full 10,000 email addresses, I only added in the 5-star contacts – the people who are most engaged with our content. I then let Facebook build a target audience that looks most like this group.

Run a ‘Reach’ campaign on Facebook: We ran a video promo for our top 2018 programs to drive traffic to our site. The only audience restrictions I set were location (Sydney or Melbourne where we run courses) and age (over 21). This gave Facebook a much bigger potential audience to show my ads to. As soon as people start clicking though, Facebook adjusts who it targets. Facebook’s algorithm was much better at knowing who to target than me trying to guess through interest targeting. I was able to drive much more traffic to the site at a lower cost.

Tip: When I built a lookalike audience based on website visitors, it didn’t work very well. TD suspects that when you run a campaign to drive traffic, that Facebook will target people they know are likely to click on links. These people aren’t necessarily your target audience. Perhaps they are just bored at home with lots of time to spend clicking on things. Instead, I tried building a lookalike audience based on people who visited a course page. To get to a course page they’d had to engage with our site and are much more likely to be target customers than visitors who just hit the homepage. It’s a smaller group of people but targeting people who looked like them proved much more effective.

TH adds that lookalike audiences don’t work for every business. ‘If you’re a B2B business and your customers don’t have much in common with each other, then a lookalike won’t work.’ He also suggests that it sometimes makes sense to create a lookalike audience and then narrow it down by interest targeting. ‘For example if you’re a pet service company, you might create a target audience of 500,000 people that look like your existing customers and then narrow this audience by also specifying that they be ‘pet owners’ which might only be 70,000. But 70,000 pet owners who look like your existing customers is a great group to advertise to.’

The big learning for me here is that Facebook is better at finding my customers than I am at guessing what they might be interested in. The more info I can give Facebook about who our most engaged customers are, the better it’ll get at finding people who look like them.

Bonus tip from Tim Doyle: ‘Don’t ever set ‘Engagement (likes / comments) as a Campaign objective as Facebook knows which users ‘Like’ or ‘Comment’ everything and will show your ad to them. This might help you look good but won’t drive business.’

Bonus tip from Tim Hill:Don’t edit where your ad is placed.  Let Facebook choose where it’s likely to get the best engagement. Again, the Facebook algorithm is going to be better than you at knowing how best to reach your audience.’

 

3. Maximising the mid-funnel

‘People don’t pay nearly enough attention to their mid-funnel’, says TD. ‘This is when people are thinking about buying your product and it’s one of your best opportunities to convert.’

My ‘amateur’ attempt to run Facebook ads for Zambesi last year didn’t include any mid funnel activity. My basic ad would tell you the workshop was on. I’d get excited by the number of people checking out the courses on our website each day and I’d cross my fingers and hope they remembered to come back and purchase.

Mid-funnel is retargeting people who have expressed an interest in your product but haven’t purchased. According to TD: ‘Most eCommerce businesses will have Facebook retargeting funnels for people who’ve looked at a product and another funnel for people who’ve abandoned checkout. If someone made it all the way through to checkout then you’d be willing to pay more to get them back as they’re much more likely to convert.’ TD suggests running different Ad Sets for people who last visited your site in different time periods: for example, the last 3 days, 4 days – 10 days, 10 days to 30 days etc. Put more money into reaching people who just visited as they’ll be more likely to convert.

For Zambesi, I’ve now built mid-funnel campaigns for people who visit a course page. So if you check out my ‘Capital Raising Workshop’ then you should see creative ads popping up in your Facebook and Instagram feed to remind you that it’s on!

TH adds that engaging with your content on Facebook or Instagram is another way people express interest in a product. ‘If you run a video on Facebook then remember you can retarget people who’ve watched up to a set time in the video.’ For Zambesi, I retarget people who watch up to the 25 second point in our promo video. If you’ve stayed on the video for 25 seconds, then I think that’s a good indication that you’re interested in our product.

 

4. What creative to use at different points in the funnel

When I first showed our Facebook ad creative to TD his response was: ‘That is the most ineffective Facebook ad you could possibly make’. I’ve included examples of our early Facebook ads below. Our ads were all the same: a simple photo of a workshop leader, an overlay of an insightful quote and a short text description. ‘Static image and short text is usually the worst performing ad format,’ he said.

His advice is that it’s always best to include movement in an ad creative if you can. There are lots of websites and services that exist to help you make cheap, attractive ads with movement. TH’s advice is that ‘Facebook will reward video ads because it makes Facebook more engaging. Your ad will be seen by more people and it ‘ll stand out in the feed.‘

If you can’t make a video ad, then long text is better than short text. When I created the first ads for Zambesi, I assumed I should only write text that could been seen without clicking to ‘See more’. I tried to cram my top sales messages into a few words.

But I discovered that the opposite is true. Again, Facebook rewards content that people indicate is engaging. The more often people click, ‘See more’, the more Facebook will assume your ad is good content and bump it up in the newsfeed. It also helps to warm up customers before they land on your page. If they’ve already read all about a workshop and then choose to click for purchase details, there’s a greater chance that they’ll convert than if they’d just read a couple of lines of text.

Tip from Tim Hill: Once you’ve found a piece of creative that’s working then make sure you’re selecting to ‘Use an existing post’ when you’re creating ads, rather than creating a new one each time. This means any comments or likes on the ad will be carried into the next campaign and posts with lots of engagement are more likely to get noticed.

Combining graphics and text
Facebook rejected my early ad designs because they broke the 20% rule. No more than 20% of your static ad can be text. A big quote over the top of a photo doesn’t work. I now use clean photos and include the quote in the top couple of lines of the asociated text. Facebook offers a filter check to see if your ad design meets the 20% rule but it’s hard to have any meaningful text over the image at less than 20% because once the ad is shrunk to fit on mobile, it’ll be too hard to read.

The ad creative every start-up should use
According to TD: ‘Every start-up should use customer reviews as ad creative for the first 12 months.’ He says that social proof is the best way to build trust in your product. If you look up the Koala ads, you’ll find lots of customer reviews on Facebook and on YouTube. At Zambesi, we have loads of excellent customer reviews of our workshops but we’ve only ever used them on the website. I recently hired an Upworker to turn these reviews into hundreds of Facebook at Instagram ads.

What ad creative to use at different parts of the funnel
Top of the funnel: TH recommends testing lots of different creative at the top of the funnel. The objective of a top of the funnel campaign is to drive people to your website who are likely to be interested in your product. We’re currently using a combination of a general promotional video ad Zambesi and specific workshop ads. These use photos and customer reviews but have been made (by our awesome Upworker) so the photo jolts creating movement in the feed.

Mid-funnel: TD recommends building your mid funnel creative much like your welcome email funnel. Potential customers should see a stream of creative to build a story about your company and lead them to purchase. ‘You might start by highlighting the features of your product, the next ads might include social proof (customer reviews) and after a few days you could introduce a time limited discount offer.’ He emphasised that every business is different, and you should take time to design the right Facebook advertising funnel for your customer journey.

 

5. Tactics to optimise your ad spend
As I mentioned earlier, I’ve worked out how to get our Facebook pixel onto the Eventbrite product page and the post-purchase order confirmation page so I can track sales all the way through to purchase. Each Campaign has a single objective (traffic or conversions) for each course. Instead of setting budget at an Ad Set level, I’ve found it more economical to use the new Campaign Budget Optimization feature. So rather than budgeting $100 on five different Ad Sets, I’ll put $500 to the Campaign and let Facebook work out how to optimise to achieve my objective. This doesn’t work when I have to sell different workshops in the same campaign as it’ll always skew the advertising to whichever workshop is easiest to sell. But if you have a single product, or don’t care how much you sell of each thing, then this is a good feature.

 

$200 OFF ALL ZAMBESI MARKETING WORKSHOPS TILL 6PM TUESDAY 23 APRIL

Use the code ‘Lookalike’ for $200 every growth and marketing workshop on Zambesi.  Exclusive opportunity to spend a day in a small workshop format with leaders from Koala, Canva, Airtasker, Showpo, Vinomofo and more.  Many of these programs are on-off events limited to 12 people.  Get access to the tactics of some of the world’s best marketing minds, ask questions and get feedback on your individual business or marketing / growth objectives.

SOCIAL MEDIA BOOTCAMP (for entrepreneurs looking to start or optimise their social media marketing) with Tim Hill, Social Status.  SYDNEY ONLY

RUTHLESS PERFORMANCE MARKETING (for everyone interesting in world’s best marketing tactics) with Tim Doyle, Koala Mattress / Eucalyptus VC. MELBOURNE & SYDNEY

BRILLIANT DIGITAL MARKETING (for entrepreneurs and for marketers.  A comprehensive digital marketing tactics workshop) with Mark Baartse, CMO Showpo. SYDNEY ONLY

HOW TO GROW LIKE CANVA (for entrepreneurs and marketers working in either SaaS or Marketplace businesses only – advanced) with Andrianes Pinantoan, VP Growth Airtasker, Former Head of Growth Canva)

BRAND LIKE A MOFO (for entrepreneurs and marketers) with Andre Eikmeier, Cofounder Vinomofo. MELBOURNE & SYDNEY

GROWTH HACKING (for entrepreneurs looking for tactics to scale rapidly at low / no cost) with Jared Codling, Slingshop (SYDNEY ONLY)

MARKETING LEADERSHIP MASTERY (for professionals working in marketing who want to reach the top) with Andy Lark, Former CMO Xero, Former CMO Commonwealth Bank. SYDNEY ONLY

 

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How to get email marketing right https://zambesi.com/how-to-get-email-marketing-right/karina-may https://zambesi.com/how-to-get-email-marketing-right/karina-may#respond Sun, 17 Mar 2019 20:15:02 +0000 https://zambesi.com/?p=814  

With Karina May and written By Rebekah Campbell

Like most business owners, I send out an email newsletter every week.  It’s a guessing game: often I don’t know if I’m doing this right.  How long should an email be; how many calls to action are best?  I can see people unsubscribe more than I’d like, and our ‘open rate’ is around 22%. But what’s normal?

Email marketing can be the top driver of sales for eCommerce businesses.  According to Karina May: ‘By the time a business has an email list of 20,000, they should be able to predict sales from each email.’

Karina has developed and implemented email strategies for some of Australia’s biggest eCommerce and marketplace businesses including Showpo, Pet Circle, Coco Republic and Service Seeking. 

Karina and April Murphy, Email / CRM Specialist at Showpo, have created a morning workshop where marketers and business owners learn effective email strategies that win customers. They’ll deliver the workshop in Sydney next month, and tickets are limited to enable questions and feedback from every participant. Karina is available for in-house consulting and training.  Contact us for further info.

I spoke to Karina to get some advice on our email marketing at Zambesi and to learn what we should be aiming for – she cleared up a lot of my questions.   If there’s anything else that you’d like to know then please write questions in the comments section.  Or come to the workshop and discuss with Karina and April in person.

In this article:

  • What is a normal email subscriber list size?
  • Ideas for how to grow your subscriber list.
  • What are normal open rates and unsubscribe rates?When to know if you’re in trouble.
  • Most common email marketing mistakes.
  • How to improve your open rates and deliverability.
  • The best way to manage unsubscribes.
  • When and how often should you email?
  • What are the most effective emails for generating sales?
  • Email automation funnels every business should have.

In addition, Karina has reviewed each of the major email marketing platforms including recommendations for which list size each platform is best for and all the associated pricing.

Download the email marketing platform review directory below. 

What’s a normal email subscriber list size?

The Zambesi email is around 8,000.  I asked Karina if this is good or bad and what should we be aiming for. ‘Obviously, early stage businesses don’t have the same subscriber lists as big competitors.  She’s worked with lists with more than a million contacts and lists with as little as 10,000.  You’ve got to start somewhere, and she suggests that a new business should work hard to reach 20,000 subscribers.  ‘Once you’ve got a list of 20,000, then you can really start to build effective automated campaigns that generate sales predictably.’

 

Ideas for how to grow your subscriber list.

‘The most common way to collect emails is on-site capture with a discount.  When someone comes to your site, show them a pop-up that’ll give them a discount for X number of days.  A lot of people don’t like pop-ups, but they work.  I’ve tested pop-ups on and off and they’re effective, so long as the messaging is optimised.

Competitions work, but expect to get serial competition people entering and a spike of unsubscribes afterwards.  Competitions often attract people who are already your customers, especially if you’re promoting the competition on your own social media channels.   Get new people by running a look alike campaign on Facebook using your existing email list.  I also recommend using a product like Gleam which give people more entries for sharing your competition with friends.  I’ve seen competitions get three times more entries using Gleam. 

Check out Zambesi’s Gleam competition to win $10,000 of awesome Zambesi workshops for your and your team! 

 

Partnerships can make a big difference.  Work with a like-minded company that has the same audience and a bigger email list and create a co-branded offer.  Make sure you build a landing-page so people have to first enter their email address before accessing the offer.   It’s important to communicate with people that you’re adding them to your email list (via an opt-in) so they’ll open your email.  There’s no point collecting addresses that never open your email.  Or worse still, tarnish your brand by emailing without permission.

Think about what list building initiative makes the most sense for your business.  Webinars can be a good way of capturing lots of email contacts or even live events.  You could create eBooks or articles, like this one, and gate part of it so people need to enter their address for access.  The most important thing is to make sure people expect to get an email from you.  Otherwise they won’t open it, which impacts your deliverability (see common email marketing mistakes below).’

 

What are normal open rates and unsubscribe rates? When to know if you’re in trouble.

You should expect a 40% open rate on a welcome email or a first email.  Any less that this and you’ll need to look at how you’re collecting email addresses and if these people are actually interested in your business. For a normal weekly EDM, you should aim for an open rate of 25% or above.  20% – 25% is OK.  If you’re below 20% then you’ve got a problem.  The mailbox providers monitor what percentage of people engage with your email and if you dip then they might start sending your emails to the SPAM folders.  Also watch your unsubscribe rates. You don’t want to get more than 0.8-1% unsubscribing from an email.’

 

What are some of the most common email marketing mistakes?

‘Lots of businesses don’t think about the future.  They’ll start on Mailchimp because it’s cheap and easy. But once you’re over 10,000 contacts it gets quite expensive and some of the functionality is limited.  It can’t do much automation or on-site tracking which is important as it helps to see what your contacts are doing beyond email click. When you choose a platform, it’s important to think 12 months down the track because it takes a lot of time to set up templates and assets and then have to switch everything.  A typical migration takes a minimum of four weeks and is quite involved.  I also see businesses unnecessarily switching back and forth between different software (shiny object syndrome) which can be a drain on resources. But if you’re spending more time manipulating a system to suit your needs than executing, then you know that it’s time to switch things up. 

I still see so many emails that aren’t mobile responsive.  Most people will look at your email on their mobile.  If your email isn’t responsive then half of the page might be taken up by the header.  You need to ensure your emails look good on mobile and the new content and a call to action (even text overlay on a *linked* banner image) is on that first screen. Depending on where your contacts are clicking, you might end up with a very minimal header and put the site links in the footer of the email.

The biggest mistake I see is poor management of their list.  Businesses will keep emailing and emailing the same list, people will unsubscribe or tune out.  The open rate will drop, and the mailbox providers will start to block them or flag their emails as SPAM.  Gmail is particularly strict and if you don’t have strong engagement then your emails will all stop getting delivered.  Even people who want your emails won’t be able to get them.

 

How to improve your open rates and deliverability.

An easy win is to start cleaning up your list.  Look for people who haven’t opened your emails in 30-60 days (depending on your frequency of sends), segment them out of your main newsletter / EDM list and run a reactivation campaign.  How you choose to reactivate will depend on your type of business.  You could send them a really good offer.  You could send them a personal note asking for feedback. Or you could ask if they’d like to be sent fewer emails and segment them into a list that you don’t contact as often. If they still don’t respond, then at 30-60 days after that try sending a last chance email.  Tell them they’re about to be removed from your list.  And if still nothing, take them off.  

You should set up your reactivation /win back campaign to automatically trigger once a subscriber hits a set threshold of disengagement.  You could also look for early warning signs (e.g. no opens or clicks in a few weeks) before they’re completely disengaged and set up a ‘defecting’ campaign which catches those contacts and tries to prevent them from ever qualifying for win back.

Make sure you refresh the campaign every 3 – 6 months with new offers.  Contacts might continue to requalify and stale content will reduce the effectiveness of the campaign.  Be careful how you word your last chance emails.  Don’t say ‘we can see you’re not interested’.  People don’t like being told what they are and aren’t interested in and they might be active on your website and just not engaging with emails. 

I know this sounds counterproductive when business owners put so much time, effort and money into building their email lists.  It’s especially hard when a client is trying to sell their business and it looks good to have a million email subscribers.  But if they’re not opening or clicking anything and are unlikely to in the future, then they’re harming your deliverability.  Removing inactive people will increase your engagement rate and improve the likelihood of your emails staying out of SPAM. 

Personalisation is best way to improve engagement and therefore, deliverability. You can start with something basic like using the subscriber’s first name in the subject line or headline (hint: ensure you set a default value for contacts where you don’t have a first name). You can also personalise the body content, either by asking contacts what content they’d like to receive, or better still, tracking the content your subscribers are engaging with in emails and on your website. By doing this, you can learn what they like and show them content they’re likely to be interested in.  You could even rearrange the content order of your emails in line with their interests. For example, a fashion website might send a weekly email with new product releases. If a contact has previously browsed men’s suits X times in the past, then you could show them men’s suits at the top of the email.  Most of the advanced email marketing tools enable this via conditional and dynamic content.’

 

The best way to manage unsubscribes

‘When someone wants to unsubscribe, you should let them do this via a single link.  If you don’t add an unsubscribe link to your footer, then most ESPs will auto-add one.  Preference centres were big for a while.  Instead of one link, departing subscribers had to choose to unsubscribe from sales newsletters, product newsletters and so on.  These were often designed to confuse people, so they’d find it difficult to remove their email address.  In my opinion, if someone wants to unsubscribe then you should let them. They’re likely to hurt your deliverability by not engaging and might even complain to your email marketing provider which will cause further issues.

Make sure you keep a list of unsubscribed email addresses as they can still be useful.  You can use the list to retarget these people on Facebook and try to win them back – although this should be a lower priority as it’s typically a lot easier to activate a new contact then reactivate an old one.’

 

When and how often should you email?

A typical eCommerce business will contact their subscribers one to two times each week, sometimes more. You need to test frequency and when you’re starting to see people disengage then you’ll know you’re contacting them too often or sending them the wrong content.

It’s important to understand the cadence of your customer interactions and buying patterns.  A business that sells party dresses might email customers every Wednesday, Thursday and Friday as people plan for the weekend.  A business that sells training (like Zambesi) might email early Monday morning before most business leaders hold their weekly meetings and then a reminder to people who engaged with the Monday email on Tuesday.  Identify the moments your customers are thinking about the problem you are looking to solve and intercept these moments. 

 

What are the most effective emails for generating sales?

For eCommerce businesses, the most effective emails are usually new arrival notification or back in stock. People naturally fear missing out and want to be across whatever is new or limited.  You want to make sure that your emails are useful to your subscribers so it’s important to segment as early as you can so you’re only sending people relevant content.    If you don’t have a constant stream of new products, then you need to create compelling new content.  You have to find something to share that’s new and useful.

 

Tips for designing emails that convert and how to avoid SPAM flags

‘I would never recommend you ask subscribers to do more than two things in one email.  It’s always best to test as much as you can.  It only works to test one thing each email, so you know what’s driving the outcome.  I recommend A/B testing a button colour in one email, then test different layouts in a later email and so on.  Test using one ‘buy now’ button and multiple buttons throughout the email.  I’ve seen an example where one button was as effective as eight buttons.  It really comes down to your audience.  Keep a record of what worked and the confidence level each time and you’ll start to build guidelines of what works best in your emails. 

Image-based messages can look great, but depending on the mail client settings, images might not download, then your email will look terrible and risk not being delivered at all. Make sure you always include an alt-text (text version of what’s in the image).  Or better still, break up the images with real text.  Aim for a maximum of 60/40 image /text ratio as all-images can be a SPAM flag.  Having lots of capital letters in the body or the text and subject line words like ‘free’ and symbols like ‘$’ and ‘%’ signs are also SPAM flags and should be kept to a minimum and not front-loaded.’

 

Email automation funnels every business should have

‘At a minimum, you should have automated email funnels for ‘welcome’, ‘reactivation’ and ‘abandoned cart’. Ensure that when a subscriber lands in your welcome funnel that they’re temporarily removed from the regular email lists – otherwise you might unintentionally bombard them with lots of emails at once.  For a welcome series, I’d recommend emailing around three times in the first week. Use each email in the welcome funnel to introduce your business and promote a different action; for example, one could be to check out the latest products, another to check the blog, another to follow on socials etc.  It depends on the objectives of your business.’

I asked Karina for some specific advice on Zambesi’s email marketing and an appraisal of what we’ve done to date.  Her advice was insightful and has led to some big changes that you’ll start to notice over the coming weeks.  Given that most online businesses generate the majority of their sales by email, it seems crazy that we’ve put so much time into learning Facebook advertising and other acquisition tactics and just tried to wing it with email. 

Learn how our fastest growing companies use email to drive sales, benchmark your email marketing against best-practice and get face-to-face advice and feedback from Karina and April in their upcoming workshop.  This is a morning program and tickets start at $231.  Use the code ‘Email’ for a special discount on Karina’s course before Friday 22 March or tickets sell out.

Karina is available for in-house consulting and training.  Contact us for further info.

If you like this article then check out our other growth and marketing programs. Use the code ‘Marketing’ to receive a discount on these programs before Friday 22nd March:
 Ruthless Performance Marketing with Tim Doyle, Head of Marketing and Strategy, Koala Mattress
– Brilliant Digital Marketing with Mark Baartse, CMO Showpo
Brand Like a MOFO with Andre Eikmeier, Cofounder Vinomofo 
– Social Media Bootcamp with Tim Hill, Cofounder Social Status 
How to Grow Like Canva with Andrianes Pinantoan, VP Product and Growth Airtasker

 

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The 8 Attributes of a Digital CEO https://zambesi.com/the-8-attributes-of-a-digital-ceo/stephen-scheeler https://zambesi.com/the-8-attributes-of-a-digital-ceo/stephen-scheeler#comments Mon, 04 Mar 2019 02:24:05 +0000 https://zambesi.com/?p=770  

Written by Rebekah Campbell 

‘The skills a leader needs to succeed in 2019 are very different to 2013’, says Stephen Scheeler, Former CEO Facebook ANZ.  ‘The world is changing so fast.  You can’t get away from technology, even if you wanted to.  Wave after wave of disruption is washing over everything.  And everyone is grappling with it.’

According to Stephen, this acceleration presents an incredible opportunity for leaders who want to get ahead.  ‘Almost every business is in trouble and it’s only going to get harder.  The right kind of leadership can transform a team and even a company.  And a smart, energetic individual can advance their career fast.’

Stephen runs Digital Disruptive Leadership, a one-day intensive workshop in Sydney and Melbourne. The workshop is a small group (limited to 15) so Stephen can address each individual’s business and career goals.

We asked Stephen about the core attributes of a great digital leader.  A lot has been written on this topic, but Stephen’s advice is confronting and important.

 

What’s in this article:

  1. Why now?
  2. The characteristics of a digital CEO
  3. The difference between Facebook / Google / Amazon and everyone else
  4. Data is the new oil. But what does it mean for me?
  5. How business needs to change
  6. Career advice for disruptive leaders

 

Why now?

‘People feel disrupted in a way we’ve never seen before’, says Stephen.  ‘People are worried about the future of their careers and the future of their businesses in a digital world.  There’s a sense that we’ve fallen through a looking glass.  Wasn’t it yesterday that we all watched three TV channels?  Netflix didn’t exist.  Every day there’s a news story about a hack or crypto currency scandal.  We’ve seen the US election disrupted by technology.

‘I work with a wide range of businesses, and there’s a feeling of bewilderment in the leadership teams.  Every industry is being impacted: fashion is now shaped by Instagram, sport is being disrupted by Twitch.  More people now watch games of Twitch than watch the Soccer World Cup.  Everyone from mortgage brokers, to consumer products to small online retailers.  You’re going to have to transform the way you think – and not in a way that you’d expect.’

 

The characteristics of a digital CEO

According to Stephen, there are eight elements to digital disruptive leadership: vision, humility, curiosity, adaptability, transparency, data dexterity, customer obsession and speed. ‘It doesn’t matter if you’re a sole trader or if you have 10,000 employees, you need to create products that create value for your customers, your shareholders and yourselves.  And you need to innovate to keep ahead of the rapid changes in customer needs and a competitive landscape.

‘Bigger businesses have to do this at scale.  You’ll need to look at the profile of talent in the business and start modifying it. You’ll need a deep understanding of technology and the trends impacting your space.  Customer expectations will develop at least every 12 months.  You’ll need to continually update your business model and look for new ways to create value or you’ll likely find that your business model will be destroyed.

‘You’ll need to be more curious and let go of your way of business.  Jeff Bezos’s mantra is that “it will always be day one at Amazon”. Recognise that the way you did things yesterday isn’t going cut it.  You’ll need a culture that will innovate quickly.  You’ll need to remove silos and redesign how you link culture, leadership development, innovation and incentives.  I often come across businesses who say they want their people to take more risks.  But they haven’t changed their culture or their remuneration system which is set up to punish people when they fail.’

 

The difference between Facebook / Google / Amazon and everyone else

‘Most business leaders today will tell you they’re customer centric.  When they have meetings, they’ll consider the voice of the customer. They’ll probably have set up customer advisory groups and conduct regular customer interviews.

‘This isn’t the same as being customer obsessed.  Amazon, Google and Facebook are customer obsessed and this is what distinguishes them. If you want to cut through in 2019, you need to become customer obsessed.

‘For example, I recently worked with a major airline.  I asked: “What’s the biggest point of friction for people flying internationally? What’s the most annoying part of air travel?”  The answer was obvious: “sleep”.  So, I asked what they knew about how much people slept on their planes.  And it turned out, not very much.  They’d conducted surveys and measured the change in survey results over time.  But this isn’t real data.

‘If Facebook, Amazon or Google were running an airline, they’d have installed sensors on the plane. Sensors so sensitive they could measure the quality of people sleeping from a few metres away.  And if these sensors didn’t exist, they’d invent them. They’d track every plane, compare every variable (oxygen levels, temperature, time of day, seat etc), and become a world-leader in sleep.  In time, this sleep science technology might make more money than air tickets.  This is customer obsession, and this is how great digital leaders think.’

 

Data is the new oil.  But what does it mean for me?

‘Our ability to access and use data is driving a seismic shift in consumerism.  In 1885, if you visited a country town, you’d find 100 different fizzy drinks all made within 10 kilometres from that town.  Then Coke came along with one product, one taste, one marketing, and the whole world gets Coke. 

‘Data is driving mass commodification backwards.  Until recently, we didn’t have the tools to collect and organise data in real time. Data used to live in big servers that very few people could access.  Now, confluence in computing power, advances in machine learning and cheap storage have converged, opening the possibility of machines driving intelligence.  

‘The best businesses in the world use data to create new products, and the pendulum is swinging back. These days, we can start with digital: your Facebook feed and your Netflix homepage is different from mine.  We don’t listen to the same radio anymore.  This trend is shifting to the physical – expect a million different flavours of Coke and a million different marketing messages all personalised for you.’

 

How businesses should react?

‘It’s worth considering how Facebook or Google might re-imagine your customer experience.  Think about what in practice you can do to become customer obsessed.  Should you be building capabilities in-house or should you be partnering?  Take a day to get under the hood of Google for Business, Facebook advertising and LinkedIn.  Make sure you know what data you’re collecting and how you’re using the data. 

My general advice for business owners is to look at yourself and consider the fundamental way you lead, and you learn.  Are you fast enough, are you customer obsessed enough, are you data-smart enough to succeed in the future?

Always look for opportunities to learn.  The world is changing.  You can either be pissed off about it or you can get out there and learn.’ 

 

Career advice for disruptive leaders

‘It’ll set you apart if you take the time to learn about technology.  Identify the new thing no one is thinking about yet in your business and learn lots about it.   For example, several years ago I worked in the auto industry.  When the iPhone came out, I learnt about it and asked how we could use it in our business.  I got approval to build an app for the company to use in its showrooms.  Apple approached us and said no one else in the world had built an app for enterprise sales.  We were the first!

‘In 2019, the most important attribute of a future leader is curiosity.   The world and business models are changing so quickly that no one will never win.  You need to be humble, admit that you don’t know everything and always look for opportunities to learn.

‘My other piece of advice to young leaders is to balance ambition and patience.  A lot of people have too much of one or the other. They’ll either stay in a role and let the best years of their career slip away or they’ll jump ship too often and never get career momentum.  Being in the right place at the right time is important.  If you can temper ambition with patience then you’ll end up more powerful.’

Spend a day workshopping your business and your career with Stephen.  His ‘Digital Disruptive Leadership’ intensive is limited to 15 participants in Sydney (22nd March) and Melbourne (20th March).  Places are filling up fast. 

Receive $200 off Stephen’s leadership workshop  and all related workshops listed below using the promotional code ‘Disruption’ at checkout. Discount expires 8pm, Friday 8th March. 

 

Related workshops

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Stepping up: How to become a great first time leader https://zambesi.com/stepping-up-how-to-become-a-great-first-time-leader/andy-fell https://zambesi.com/stepping-up-how-to-become-a-great-first-time-leader/andy-fell#respond Mon, 25 Feb 2019 03:13:00 +0000 https://zambesi.com/?p=758  

By Rebekah Campbell

Almost everyone wants to be a leader.  As a manager, it’s difficult to know if an expert ‘doer’ will make a good ‘leader’.  We often promote rising stars to leadership positions without proper training and wonder why they struggle to translate their personal success to the success of a broader team. 

Andy Fell is former National GM of St George Bank and is now one of Australia’s most sought after leadership coaches for CEOs and Senior Executives.  His personal passion is to support young leaders make what he describes as the toughest career transition of all; the step from team member to team leader for the first time.

I asked Andy to reflect his personal leadership journey and share tips for early-career leaders and the managers looking to develop them.

 

What are some of the biggest mistakes early career leaders make when managing people for the first time?

New leaders will often hold on to parts of their previous role where they excelled, and which led to their promotion.  Their new role is that of building skills in others, and while it’s good to lead from the front, they must attend to their new objective.  They may also try to control too much, becoming the sole decision-maker and problem-solver.  They need to learn to use their skills on their team, empowering others to learn and grow.  They’ll struggle to balance multiple priorities and end up working long hours. It’s important to decide what matters, what doesn’t and to make time to think as well as do.

 

Other than to increase productivity, why is it important for businesses to develop strong leaders?

A customer will never think more of a business that its own people.  When I became a leader for the first time I worked out that I had to create a team with high morale that came to work feeling positive and self-confident. Only highly motivated people will create great service and great service comes before sales and revenue or profit growth. People who love the service you provide recommend and repurchase from you. Word of mouth advocacy is the strongest form of marketing we have.

 

As an early career leader myself, I’ve found it difficult keep people motivated and focused on goals at the same time. What advice do you have for working with team members to set goals?

My coaching process centres on ‘the power of 10’ framework (1+3+6), which helps people clarify their one true purpose or ‘why’, set three clear goals, the achievement of which are aligned to the purpose and then six actions to create movement and momentum. This is a fluid process; every time they take an action and achieve a goal they replace it.  If there are too many actions the person can become overwhelmed.  Too few actions and they won’t create enough energy and progression towards the goals. Great goal setters create big goals, support it with clear visualization and then break it down into manageable steps. 

 

Why do you say clarity and consistency are so important?

New leaders often ‘blow with the wind.’ One week they’ll say one thing is important and the next week something else.  If everything is important, ultimately nothing is important. Clarity motivates whilst ambiguity or a lack of clarity has the opposite impact. People start to second guess what will be ‘important’ next and lose motivation to deliver as they expect the focus will be ever changing. 

 

Early career leaders often put off having difficult conversations.  What are some tips for handling these conversations?

Brian Tracy wrote the book ‘Eat that Frog’ –  saying that if you need to eat a raw frog you should do it first thing in the morning or it will play on your mind and it will become an ever-increasing distraction. It is the same with difficult conversations. Schedule it, rehearse it, visualise the outcome you want and do it!  Be clear and then stick to the fact and don’t get drawn into emotion.  Become comfortable with periods of silence. Take notes so you have an accurate record of who said what and what actions were agreed ensure you both then have a copy. It is essential you follow-up on anything you agreed to do and that you ensure the other party does the same. 

 

Why have you created a workshop specifically for early career leaders?  Who should come and what should they expect from the day?

I have mentored many talented early-career leaders who needed a workshop based on practice, not theory.  I have amassed a lot of experience and I love sharing what works: it’s the one-day course I wish I had received.  By the end of the day, participants should feel more confident as leaders.  There are many actions they’ll be able to implement immediately as well as developing a framework for leadership progression throughout their career.

 

Check out Andy’s workshop here

 

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A great career in product management https://zambesi.com/a-great-career-in-product-management/lyndon-maher https://zambesi.com/a-great-career-in-product-management/lyndon-maher#respond Mon, 25 Feb 2019 03:03:48 +0000 https://zambesi.com/?p=753 By Rebekah Campbell

The title ‘Product Manager’ didn’t exist much more than a decade ago.  These days a product manager is central to the success of every business with technology at its core.   Lyndon Maher is one of Australia’s highest profile product managers.  He was part of a team that created the ‘product’ function at Domain Group and has spent the past four and a half years transforming Domain into an innovative product-led company now used by millions of Australians to buy and rent property. 

We asked Lyndon to describe his career in product management, what makes a great product manager, and what existing and aspiring product managers should to develop new skills.


How did you first get into product management?

I studied a double degree in business and information systems and La Trobe University in Melbourne.  My first job was as a programmer working on the yellow pages backend database.  I didn’t love programming but, in 1999, there were lots of jobs for programmers and I wasn’t sure what else was out there.  I started doing some business analysis and I got to meet with lots of customers.  I really enjoyed this work much more than programming so I worked overtime to build up experience in a new area. 

By the mid 2000’s websites like Flickr and Facebook were emerging and technology companies had started to think about product development as an ongoing cycle.  The term ‘agile’ had emerged and the best products were being constantly improved based on structured feedback loops with customers.

When I returned to Australia I applied for a product management role with CarsGuide.  I wasn’t sure what a product manager was but I was so inspired by the interview that I came home certain that this was the career path for me.  I worked at CarsGuide for several years before moving to BigCommerce and more recently I’ve built and led product teams at Domain.


What do you enjoy most about Product Management?

I love working with customers, understanding the customer problem and designing innovative solutions.  The Product Manager is at the intersection of technology, marketing, sales, customer support and design.  You own the development and success of the product and interact with every part of the business.  It’s a very creative and strategic role. 

 

What’s been behind the transformation of product at Domain?

Four years ago we used to spend a lot of time writing detailed product specifications and we’d build and release new features every couple of months. Our aim was to change our culture and processes so we could ship new code to production at least every day.   We achieved this within six months and developed a momentum that became infectious and exciting to be a part of.  We now break every project into a series of micro-experiments that we can design, test and learn from.   We’ve built a talented, diverse team.  Early on, some of our techniques were seen as unconventional, but we’re using the world-class, cutting edge practice. 

 

What do you look for when you’re hiring a new product manager for your team?

Product Management is such a new field that often applicants don’t have a lot of direct experience. There’s no one career path and they’ll often come from a customer service role, engineering, marketing, business analysis or design.  The most important traits for a product manager is passion and curiosity.  You have to care about the customer and their problem and be hungry to learn and be mentored.  This is what I look for in candidates because these character traits can’t be trained. 

 

What kind of training is available for product managers?

I still haven’t come across and formal courses that are turning out great product managers.  Most product leaders have learnt on the job by working with a great person. Reading a broad range of current books on topics such as analytics, user testing, agile project management and leadership will help you to develop your knowledge.

 

You’ve created a one-day product management intensive.  Can you tell us how this works and who should come?

I constantly get asked to meet with product managers and give advice. There’s only so much I can share in a 30 minute coffee so I developed a one-day, small-group program to share all of the best techniques I’ve developed at Domain and BigCommerce so others can apply them in their businesses.  The program is suitable for existing product managers, aspiring product managers, engineers, designers and founders.  Everyone working in a technology company benefits by improving their product skills. 

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What should your annual business plan look like? https://zambesi.com/what-should-your-annual-business-plan-look-like/kathryn-ritchie https://zambesi.com/what-should-your-annual-business-plan-look-like/kathryn-ritchie#respond Mon, 11 Feb 2019 04:07:29 +0000 https://zambesi.com/?p=684 It’s the start of a new year; I’m refreshed from a break and busting to pack new ideas into our plan for 2019.  Large corporates hold executive planning sessions and retreats to document their strategy in a formal way.  But what about smaller, growth businesses?  I’ve started and run businesses for my entire career, but it’s never been clear to me how a fast moving, agile company should create and execute an annual plan.

I connected with Dr Kathryn Ritchie, Founder of Ignition Institute in New York.  Kathryn leads an international strategy firm that specialises in working with leadership teams at high-growth companies to clarify strategy and optimize performance. She recently supported General Assembly to reshape their business strategy leading to a successful acquisition of the company in 2018.

“General Assembly is appreciative of the ongoing partnership and strategic support it has received from Dr. Kathryn Ritchie and Ignition Institute over many years”

-Jake Schwartz, CEO & Cofounder, General Assembly.

Kathryn and her team will be in Australia during parts of March and April and have limited availability to support scale-up businesses to develop or review their strategic plan for 2019.  Contact us for info.

We worked with Kathryn to develop our strategic and operational plan for Zambesi for 2019.  The Ignition team have developed a proprietary method so I can’t give away all the secrets.  But, for businesses who can’t bring in a facilitator like Kathryn, I’ve documented as much of our process as possible below.  Please ask questions in the comments at the end.

 

What’s in this article:

  • When is it important to develop strategy?
  • Step 1: Alignment
  • Step 2: Environmental scan
  • Step 3: Competitive strategy
  • Step 4: Pictures of success
  • Step 5: Identify drivers of growth
  • Step 6: Develop core strategic pillars for 2019
  • Step 7: Plan and agree on operating rhythm to drive accountability
  • Why bring in a facilitator?

 

When is it important to develop strategy?

‘It’s vital for fast-moving companies to have a clear strategic plan, internal alignment and a disciplined operating rhythm,’ says Kathryn. ‘There’ll always be new opportunities for growth and a constantly evolving competitive landscape so the plan should be revised regularly.  But if you don’t have one, or if you don’t have alignment, then the company will waste a huge amount of time and energy working on the wrong things.  

In 2019, every executive leadership team or a founding team conduct a thorough strategic planning session at least twice per year; particularly if there’s a revenue slowdown, a new product in development or plan to enter a new market, a leadership transition, the need to align culture or if the company is looking to exit.’

 

 

Step 1: Alignment

Kathryn recommends that the first step in developing a strategic plan is to check in on the existing alignment of the leadership. Kathryn says: ‘It’s important to check in on each of the leaders of the business to uncover any misalignment.’ 

At Zambesi, my cofounder and I did separate interviews with Kathryn where she asked us a series of questions designed to identify any areas where we weren’t aligned.  I was certain we were aligned on everything.  We spend so much time talking about our vision for the company, purpose and values.  But it was amazing to discover that we’d both made lots of little assumptions about the future that conflicted – just because we’d never spoken about them before. Clarifying these and becoming aligned at the outset, gave us a foundation to build our 2019 strategy.

 

Step 2: Environmental scan

‘You can’t develop effective strategy without looking at the context you operate in.  There’s a systematic process we go through to do this.  Start by considering the political, economic, social, technological environment and add competitive

You need to look at what’s going on around you – political, economic, social, technological and competitive environments – identify the trends and what they mean for your business.  If you don’t do this methodically and often then you’ll miss both threats and opportunities.

During the Zambesi session, we identified a number of trends that will impact our business.  One example is that people report having less time and more pressure at work – so it’s hard to take a full-day out to attend a workshop.  This trend is increasing so in the future it’ll get harder and harder to convince people to take a day out to learn.  Therefore, if we don’t adjust our strategy then our business will start to decline.

Kathryn also led a systematic ‘internal scan’ of our business. ‘It’s important to look at what’s happening internally – the good and bad things.  What have you learnt, what are the achievements then reflect backwards and forwards to uncover the landscape the business is situated in.’

 

Step 3: Competitive strategy

‘Again, there’s a method for uncovering your competitive strategy, but you can start by asking a few simple questions.  What’s our offer?  Who is it for?  What differentiates us?

What differentiates your business often isn’t what the founders or team think it is.   It’s important to find things that are difficult to replicate.  For example, culture is very hard to replicate which is one reason why it’s so important.  The best companies will preserve the culture set by the founders.

Once you’re sure your competitive strategy is right then it shouldn’t flip flop.  It should build over time.

 

Step 4: Pictures of success

‘At this point we look at three different horizons.  We start with 3 or 5 years, sometimes further, and architect back to 1 year and 90 days.  Identify the big areas you need to pay attention to.  These will become pillars and initiatives for that year.’ 

For Zambesi, we looked at the end of 2021, the end of 2019 and then three months out. Once we architected backwards, we realised how optimistic our goals were. Kathryn challenged how we’d achieve each objective which forced us to focus on much fewer initiatives – just the really important ones.

 

Step 5: Identify drivers of growth

Here we considered our goals out to 2021 and the competitive strategy and identified what will drive our growth.  Again, this process helped us to narrow in on a few very important initiatives.  It was clear that a lot of our marketing efforts are spent on activities that won’t be core to our success.

 

Step 6: Develop core strategic pillars for the business

Our immediate and long-term goals are clear.  We’ve identified our competitive strategy and what will drive growth.   The strategic pillars of the business are obvious; we then set SMART goals for each pillar for 2019. 

We develop a handful of initiatives, in service of the goals. We write out the initiatives on post-it notes and stick them onto a giant monthly calendar Kathryn has created on the wall.  We then break down initiatives into tasks on the month by month plan.  Each team member creates tasks and sticks them on the calendar themselves.  We collaborate to shift around tasks and initiatives from month to month until we all agree that the plan is right.

By the end of the session, we’ve developed SMART goals for 2019 and monthly milestones so we can track our progress to the plan fortnight to fortnight. 

This process is surprisingly cathartic.  Even though it’s obvious that so much of what I’d hoped to achieve won’t be possible, it’s much better to realise this now and not waste time trying to do too much but not getting to what’s important!   And everyone on the team is clear about our strategy and has bought into the monthly targets because everyone helped to create it.

Kathryn says that this process is important because it creates the architecture to execute on your strategy.  ‘When you plot things out on a wall, you’ve taken them out of your head and you can do things with them – like move them around,’ she says.  ‘You’ll get open input and commentary from the team. Transparency will lower team anxiety and the whole group will take responsibility for the execution.’

 

 

Step 7: Plan and agree on operating rhythm to drive accountability

‘Now there’s a clear plan, it’s vital to have good KPIs.  We’ve developed a business tracking platform called Ignite to visualise and measure week to week progress against the annual plan.  Doing lots of stuff isn’t going to get results. You need to set and measure weekly and monthly achievement goals to ensure you execute on your strategy and set numbers-based indicators so you know you’re going in the right direction.

 

Why bring in a facilitator?

As an entrepreneur, I’m always looking for the cheapest solution, so I’ve never brought in a facilitator to run a strategic planning session before.  I’ve either tried to do this myself or wrangled an advisor or board director to help. 

The impact of working with a professional facilitator was profound. Kathryn challenged us ruthlessly and brought to the group a global outlook and an understanding of the market and trends we’d never considered before.    I also didn’t realise how hard it is for a founder to be dispassionate and independent. 

Kathryn says: ‘Business leaders often have unknown biases and blind spots.  We see so many companies, we’re pragmatic and can spot behavioural patterns and blind spots. Our job is to ensure you develop good strategy and to highlight the gaps.   Founders and managers can often discount competitive threats.  It’s also important that we make sure every voice is heard – and that’s surprisingly hard to do if you’re inside the business.  And that the team is aligned on strategy, on an operating rhythm and on how goals will be tracked and measured.’

As a leader of a fast-moving, financially constrained business, our most precious asset is time and my biggest fear is that we waste time on the wrong things.   In one afternoon with Kathryn and her team, we reimagined our strategy; we scanned our external and internal environment, zoomed in on our competitive strategy and drivers of growth and created a focused set of goals and initiatives to build our business as an aligned team.

Stay tuned for our first big strategic initiative coming in April…

Are you interested in engaging Kathryn or another Zambesi expert to work with your team?  Contact us for information.

Experts for in-house training, coaching and consulting:

Related one-day workshops: 

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How to secure a non-executive director role in Australia https://zambesi.com/how-to-secure-a-non-executive-director-role-in-australia/michelle-gardiner https://zambesi.com/how-to-secure-a-non-executive-director-role-in-australia/michelle-gardiner#respond Sun, 20 Jan 2019 19:49:02 +0000 https://zambesi.com/?p=613 With Michelle Gardiner, Partner Derwent Executive
Written by Rebekah Campbell

I’ve often wondered if I’d have the skills and experience to become a non-executive director.  But I have no idea how to start looking for a role or if company boards would be interested in someone like me.

I sat down with Michelle Gardiner who runs the Board Practice at Derwent, Australia’s leading executive recruiter for high-growth and mid-size enterprise across ASX, private, government and for purpose settings.  Michelle and her team are committed to developing the next generation of Australian company directors.

This article is a thorough guide for emerging executives and entrepreneurs who are considering adding a non-executive directorship to their portfolio of work.  Please leave questions in the comments at the end.

If you’d like to get feedback, personal advice, support to develop your plan and lots of inside tips, then come along to Michelle Gardiner and Ben Derwent’s ‘Pathway to the boardroom’ workshop and spend a day in a small group with a leading Australian board search firm.

 

What’s in this article:

  • Why become a non-executive director?
  • What types of board roles are available?
  • What skills is the market looking for? How to position yourself and your value-add proposition.
  • How to start looking for a role.
  • What goes on a board CV?
  • Understand the board recruitment process.
  • How to select the right board position.
  • What does a non-executive director in Australia get paid?
  • Understand the commitment expectation of a NED.

 

Why become a non-executive director?

Michelle says: ‘People approach us with a wide range of reasons for why they’d like to be considered for a non-executive director role.  The most common are for professional development, to build a portfolio career and to use their skills and experience to give back, to mentor and to support a worthwhile organisation.’

Professional development:

‘Joining a board of another company is an incredible learning and development opportunity. You’ll develop your strategic ability and get an insight into how other people run their businesses – often in non-competing but complementary industries.  You’ll also learn a new set of skills that are quite different from the skills you need to operate or lead a business.  You’ll learn to asking probing questions and challenge when appropriate.  You’ll need to collaborate, listen and influence.  You’ll give advice but won’t always be listened to.  It’s about working as a team.’

Develop a portfolio career

‘Many more executives and entrepreneurs are looking to build a portfolio career.  Taking on a non-executive director role can be an excellent first step towards transitioning to a career that might include consulting, mentoring and several disparate board positions.’

Giving back

‘We also meet lots of CEOs, CFOs or entrepreneurs who have had successful careers and want to give back. This could involve joining the board of a not-for-profit or an emerging business with a mission you believe in and want to support.  There is a need for committed people with great skills right across the spectrum.’

 

Different types of boards and roles available

‘Becoming a non-executive director isn’t just about the Top 200 ASX listed companies.   There are thousands of private, high-growth and smaller-cap companies.  These businesses are often doing exciting, innovative things; some are gaining investment, looking to list, are growing really fast and are great opportunities for emerging non-executive directors. 

Often, a good NFP board can be a good starting point to learn the environment and build your network for the next role.  It may be the easiest option if you’re still in an executive career as it’s unlikely to be a conflict.  Government roles are sensitive to conflict and are often a better option for consultants or professional directors.’

 

What kind of people is the market looking for?

‘Most companies are looking for diversity in its entirety.  We’ve moved away from just accountants and lawyers on boards – although there will always be a need for them.  Diversity isn’t just about gender, age and cultural background.  A healthy board should boast a diverse set of skills and experience.  We’re often asked to recruit directors with skills in customer experience, digital marketing, sales, an entrepreneurial mindset and innovation – all highly sought-after in the current market.

Boards will also have a style of candidate in mind.  For example, they might describe their board culture as being able to challenge each other without getting upset.  They’ll want someone who can be a team member but be confident enough to speak up.’

 

How to start looking for a board role

‘First understand your value-add proposition to a board.  Identify what you’ll bring to the board table and get really good at your elevator pitch.

Then map the market and work out where you’d like to play that aligns with your skill-sets.  We do this work with you in our workshop, but if you can’t attend the workshop then you should create a spreadsheet and map who’s sitting on which board and their skill sets.  Look for companies who don’t have your skill-set but need it and identify who can introduce you. 

Then get out there and tell everyone you can reach.  Talk to CEOs, CFOs, people you know who are already sitting on boards as well as lawyers, accountants and advisors.  Build your network and let everyone know that this is what you’re looking for.’

 

What goes on a board CV

‘A board CV is quite different from an executive CV.  You don’t list out your achievements and KPIs in the same way.  Your experience is what got you here, so be brief. 

The crux of a board CV is your value-add, what you’ll bring to the board.  For example: functional experience, sector expertise, committee expertise, global experience etc.  List up to six bullet points.  The CV should be no longer than two pages.’

Develop and get feedback on your CV in Michelle’s workshop.

 

Understand the board recruitment process

‘The AICD do a good job of publicising the ASX top 200 roles but there are 2000 ASX listed companies and thousands more private companies, often doing amazing things.  These roles usually aren’t advertised.  Only government roles or member-based organisations are advertised.  The vast majority of board roles in Australia are placed by a small number of recruitment companies, including us, or by word-of mouth. 

Companies come to us looking to recruit a director because they know we have a talent pool of both existing and emerging non-executive directors.  This is why networking is so important, and I’d be one of the people with whom you need to network.

We know our clients well and we work to understand the style and culture of a board as well as the skill-set requirements.  Some boards are very formal, and some are relaxed.  Boards are a delicate balance and can be very nervous about ensuring they bring the right person into their group.  It’s important for us to understand the individuals who are already around the table so we can suggest the right candidates.  It’s also important for us to know the candidates well.

We generally present a list of six to ten candidates and then narrow it down to two to three.  Then it’s down to style and fit. There are a lot of nuances to consider when placing a NED.’

Michelle and Ben will workshop and role-play a board interview in their workshop.

 

How to select the right board position – particularly a not-for-profit position

‘There’s a lot to consider when you’re looking to take on a commercial board position and it’s important you do thorough due diligence.  We’ll go through the essential questions to ask at our workshop.

A not-for profit board is simpler.  I often get asked if joining a not-for-profit board is a good way to advance your career. And it can be, but you’ve got to select carefully.

First, ensure you have a real passion for the mission of the not-for-profit and that your values align. Then look at who else is sitting around the board table.  You don’t want to join a NFP board and discover that you’re the only person with commercial skills.  These groups often attract well-meaning people, but you won’t want all the governance and fundraising to fall on your shoulders.  You want to join a NFP board with experienced directors that you can learn from. Assess the calibre and networks of your fellow directors; what will you learn, what other boards are they on. They will see you in action and may recommend you in future.

 

What does a non-executive director in Australia get paid?

The remuneration of company directors in Australia is varied.  It’s a misconception that it’s easy to replicate what you’ll earn as an executive as a NED.  You can’t go into it with that mentality.  You’ll earn a certain amount of money but if a disaster comes along, you’ll have to work very hard and you won’t get any extra money.

Most not-for-profit boards are voluntary.  Government boards will generally pay between $25K – $45K.  A bigger company board might pay the Chair $275K – $350K, a company further down the ASX will pay the chair around $120K and less for directors. The bulk of people on boards have already had big careers.  It’ll be very difficult to replicate your executive salary as a NED.

 

Understand the commitment expectation of a NED

Again, this is varied. The average board will meet 10 -12 times per year, do one or two strategy sessions per year and perhaps a phone call once per month.  It’ll take on average half a day to prepare for a board meeting.  If you’re on a committee then the committee meeting will often run on the same day as the board meeting.  Part of your role could be to mentor the CEO or other key executives, which is additional time.

To meet Michelle Gardiner and Ben Derwent from Derwent Executive come to their Sydney workshop ‘Pathway to the Boardroom’ on 1 March.

Get $200 discount to Pathway to the Boardroom and all related workshops listed below using the promotional code ‘Pathway’ at Eventbrite.


Related Workshops:

 

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The new rules of branding https://zambesi.com/the-new-rules-of-branding/andre-eikmeier https://zambesi.com/the-new-rules-of-branding/andre-eikmeier#respond Wed, 12 Dec 2018 20:26:00 +0000 https://zambesi.com/?p=548 With Andre Eikmeier, Cofounder Vinomofo
Written by Rebekah Campbell

 

Andre and his business partner launched their first business in 2006. Their vision was to unite people like them – passionate about wine but didn’t wear bow-ties. In just a few years, they’d united a community of 5000, who shared wine reviews and stories through social media. But there wasn’t yet a product, or any revenue.

In 2011, the founders trialed selling wine to their community and developed the brand Vinomofo.  ‘When we thought about launching a wine retailer, we had to ask ourselves: “How can we compete with Coles and Woolworths?”  says Andre. ‘The truth is, they already served the market pretty well.  But we had something they didn’t…’

This paper focuses on how Andre approaches building brand and the relationship between brand, tribes and growth.   Much has been written about how to develop a brand, and every branding agency has a different formula. But the way founders must approach building a brand has changed. And it’s quite different to how big company marketers and agencies think about this topic.  The world is now super competitive.  It’s way too expensive to buy growth on Facebook or Google. 

A brand isn’t just a good logo and a positioning statement.  If developed well, a brand will become the soul of a company.  It’ll anchor every strategic decision, it’ll attract team members and investors who have so much choice in whom to back.  Ultimately, it’ll become a uniting force for a tribe that’ll advocate for your business and safeguard you from competition. 

Vinomofo is one of the best examples of a company who understands that brand, tribes and growth are indistinguishable.   Launching from an Adelaide garage seven years ago, the two founders built a $100M + wine retailer in an extremely competitive market. 

This paper breaks down some of the key steps Andre took to build Vinomofo – and we’ve used Zambesi as an example to show how his strategies apply to other businesses.  Andre’s advice is for company founders by a company founder; it’s also for marketers looking to understand how founders of fast-growing companies think about developing and leveraging their brands.  

If you’d like to work though your company’s strategy and brand with Andre, he’s hosting full-day, small-group workshops in Sydney and Melbourne early next year.

 

What’s in this paper:

  1. Should you develop your brand with an agency?
  2. It’s not enough to have purpose. You’ve got to stand for something that’ll ignite a movement.
  3. How to think about your company’s ‘purpose’ and what you stand for.
  4. Understanding what builds community.
  5. Find your tribe.
  6. Bring your brand to life
  7. How to interview an agency
  8. Directory of agencies used by Australian startups


Should you develop your brand with an agency?

I recently engaged an excellent branding agency to help develop the Zambesi brand. We participated in a series of workshops and they presented back some ideas and recommendations.  Although their work was creative and exciting, something didn’t feel right.

‘The early work of creating a brand must be done by the founders,’ says Andre. ‘Brand is the mission that you as the founder will evangelize every day, for the life of the business.  It has to be yours.  Brand is the foundation for growth.  It’s core work and can’t be outsourced.

But it does help to have someone guide and challenge your thinking and then help you plan how you’ll bring your brand to life.  That’s what I’ll be doing in this workshop.’

When I reflect on my experience working with an agency to develop Zambesi, the problem wasn’t the agency (they were great).  It was the process.   We’re a startup with a limited budget so we couldn’t afford to spend tens of thousands developing a brand over several months.  We were on a tight project plan with an agreed number of workshops and projected output from each session.  Every workshop costs in people hours and we were behind schedule by the time we finished our first session.

Designing the soul of a business, our foundation for everything, wasn’t going to come quickly – certainly not on an agency timeline we could afford.  And even though they had good ideas, they weren’t our ideas.  Our brand had to come from us and it would take lots of late night post-it notes on the fridge, and lots of long walks and brainstorming sessions with my co-founder until we felt certain we had the foundation right.

Andre does suggest it can help to engage an agency to help bring a brand to life, but only once the core work is complete.  We’ve included a guide for how to select an agency, what questions to ask, and a list of agencies recommended by other Australian startups at the end of this article.

 

It’s not enough to have purpose.  You’ve got to stand for something that’ll ignite a movement.

‘The first step in developing a brand is to define your purpose.  Why do you exist?’ says Andre.  This idea of putting ‘purpose’ or ‘why’ at the centre of your brand was made famous by Simon Sinek

What’s different about Andre’s approach is understanding the relationship between purpose and tribes.  ‘It’s not enough just to have any purpose.  When I ask most founders to tell me why their company exists, they’ll usually reply with a solution to a customer problem.   For example: “Our purpose is to help small business owners save time.” This is not a ‘why’ that will unite a tribe.  This is a ‘why’ that may get customers to use your product as a utility.  But there’ll be no passion, no advocacy and no loyalty.  

For example, Vinomofo could exist to help people find good wine at low prices.  Or it could exist so that everyone can have more enjoyable evenings.  But neither of these why’s would unite a tribe.

For Zambesi, we initially thought our purpose was to give people access to leaders from high-growth companies.  We began designing a brand around ‘access’. But as I mentioned before, it didn’t feel right.  I couldn’t imagine myself getting out of bed every day for the next ten years to serve this purpose.  I couldn’t imagine myself talking about it at every event, in every interview.  And I couldn’t see how ‘access to experts’ would inspire a team, customers and the broader community to advocate on our behalf.

 

How to find your ‘purpose’

Andre Eikmeier says,‘Your company’s purpose has to resonate with you as a founder.  Right at the beginning of your company, search inside yourself.  Think about life experiences that have shaped you.  What is your purpose as an individual?  The best brands always reflect the founder.

When I was growing up on the Northern Beaches of Sydney, I was the nerdy kid who wasn’t into surfing.  I didn’t fit in, I didn’t feel like I “belonged”.  I went to a pretty rough school and had a hard time with the cool kids.  As an adult, my passion was wine, but again I didn’t really fit in.  The wine industry seemed quite conservative and a bit elitist, and someone like me, with my t-shirts and sneakers and occasional bad language, but who still loved wine, didn’t really feel included.

With Vinomofo, we first wanted to create a wine community for people like us.  We made a social media site to capture the voices of anyone who liked wine, but without all the bowties and BS.  We attracted a very engaged community of 5000 people who felt the same way.  It was important to us that everyone felt included. 

This original product didn’t have a revenue model that worked, but it did have a purpose and it did unite a tribe.  Then when we started selling wine in 2011, the community supported us.’

I wrote about finding my purpose and Zambesi’s purpose in an earlier paper.  I asked Andre how he’d advise me to think about finding ‘purpose’ if we were earlier in this process. How could I check I have the right purpose, one that resonates with our community and drives customers to become advocates?

His advice: Look into yourself as a person.  You need to ask yourself some fundamental questions:

  • What experiences have shaped you?
  • What’s important to you? What do you most care about?
  • What do you do for fun? Why? What are your passions?
  • What’s your role in your group of friends? What do they look to you for?

Then look for a thread.

For me, I’ve always been interested in politics, I’ve been a member of a political party since I was 16 years-old.  My core political philosophy is that everyone should have equal opportunity to fulfil their potential.  This means equal access to quality education as children and equal access to quality ongoing development as adults. 

Zambesi’s purpose: ‘The world thrives when everyone does extraordinary work,’ resonates with me personally.  I can imagine it’ll drive me in years to come.

 

Understanding what builds community.

Here’s what’s different about Andre’s ‘founder’s approach’ to building brand.  The community should come first. And a purpose that unites a community can’t just be a solution to a customer problem.

A purpose that builds community always serves one of Maslow’s core hierarchy of needs. Usually, basic needs (food, water, warmth, rest) are solved.  Some communities form out of the need for safety.  Most commonly, online communities form to meet psychological needs (belonging, intimate friendships, prestige and feeling of accomplishment) and self-fulfillment needs (achieving one’s full-potential including creative arts). 

Andre says that it’s very hard to build community if you’re not fundamentally addressing one of these core human needs.  And if you’re a founder starting out, try building community first, product second.

Another good example of a community first startup is ‘Glossier’.  In 2010, founder Emily Weiss launched ‘Into the Gloss’, a blog where women shared their daily skin-care routines. The blog featured an interview each week with pictures of sometimes famous, but usually regular women in their bathrooms talking about what products they use and why.  The blog united a community who was looking to belong – to know that other women were just like them.  By 2013, the blog had amassed 10M monthly visitors and Emily launched a line of skincare products.  Just like Vinomofo, the community she’d built supported the product line and Glossier is now valued at >$400M.

 

How to find your tribe?

I asked Andre: ‘After defining the purpose of you company, how do you advise founders to find an unserved tribe?’

We started connecting with other younger wine people on Facebook and Twitter, joining conversations, always from the perspective of what we stood for. We posted video content in our language, reviewing wines, and people found us and talked about us, and they came.

You have to decide “Who are we for and who are we not for?”  This is how you’ll define your tribe.  And a tribe is not a set of demographics.  You cannot be for “males aged 25 – 45 who live in urban areas”.  It may work out that way, but a tribe is a mind-set, a set of passions, beliefs and a shared core human need.  And you can’t be for everyone. You can’t try to stand for everything for everyone, or you’ll end up standing for nothing, for everyone.

Zambesi example:

We serve two markets: leaders from high-growth technology companies who want to share skills, and ambitious professionals and companies who want to access the best minds and latest insights to enable them to do extraordinary work.   The best way we can serve both these industry groups is by connecting them through a structured and fair platform.

Our aim is to build community through sharing deep knowledge and leading edge thinking through papers like this and soon videos and webinars.  Our product is workshops, in-house training and consulting. 

Understanding what I now know after my session with Andre, if I could start again, I’d have built just the community first and waited to launch product.  But we’re still early and, like everyone else, learning every day!

Who are we for:

At Zambesi, we’ve developed three customer personas as filters for our marketing, content and programs.  We’ve had the startup founder, the ambitious digital marketer in a large corporate and the COO of a scale-up.  These have been our three prototype customers.

But through working with Andre, I can see a bigger opportunity, for the common thread in each persona is a mind-set. 

Participants and companies: We’re for the doers, changers, innovative thinkers; people ambitious for their companies and for their own careers; people who value authenticity, collaboration, deep expertise, cutting-edge skills, and who’ll contribute to a group conversation.  We’re not for coasters, spongers or those resistant to change.

Experts: We’re for leaders who are doing what they’re teaching, constantly curious and developing new tactics and skills, who are recognized by their peers as among the best and who value building community with Zambesi.  We’re not for consultants, professional trainers or individualists.

The opportunity for Zambesi, is to unite this tribe.

 

How to bring your brand to life

Once you’ve nailed your core idea, ask how you want people to feel when they interact with your business.  Your purpose, your tribe and the feeling you seek to create should permeate every aspect of your business.   Map out how to represent your brand across your product, design, voice, customer experience, content and marketing material.  Your brand and your tribe must filter every decision you make in your business.’

For Zambesi, I’ve been clear about purpose from day one, but only through working with Andre have we identified our tribe and begun to define how people should feel as they interact with us.  I’ve found it difficult to implement our brand ideas coherently across the business – even though we’re still small.

Below are screenshots from Vinomofo’s onboarding and content channel.  The photo presents who the tribe is; the copy is explicit about the company’s purpose: ‘More than just a wine store, we’re a tribe.  No bow-ties, no bullshit.  Just good wine, good people.  The makers and the drinkers, united by wine.’  The tone is consistent with the brand: ‘Yep, I’m a grown up.’

I’ve often questioned how explicit we should be about presenting our purpose on the website.  Andre’s response: ‘Don’t be afraid to be explicit.  When anyone comes across you—on social, on your homepage, in an ad, face-to-face – you should carve your space.  State what needs to change in the world and how you’re going to do it. Tell stories about what you stand for.’

 

When it’s time to engage an agency, how should you choose?

‘Most agencies will produce work that’s acceptable. But if you want them to come up with moving work then they need to have their heart in it. You need to work out if they want your business because they want / need business or if they’re genuinely passionate about your mission and want to create magic for you.

Questions to ask:

  • Why did you start this agency?
  • What do you stand for? What do you believe in?
  • Why do your team want to work with you?
  • Why do they want to work with you and on your project?

Your intention should be to get a read on their integrity and their values.  Look for what excites them.  You want to work with people who live for what they do. Their passion will come through in their work.  I also suggest you negotiate rates based on output of work and not on input of time.  I’m always clear that if they come up with a belting idea in the first five minutes then that’s fine.  But if it takes longer then you shouldn’t be pressured to accept work that you’re not excited about.

I’ve wrestled with how and when to focus on brand in every business I’ve built.  I’ve spent big with agencies only to discard work when the business needed to pivot.  I’ve learnt a massive amount though a series of conversations with Andre and have begun planning how to evolve the Zambesi brand and unite our tribe in the coming months. 

If you’d like to spend a day in a small group with Andre and to workshop your brand strategy, plan how to find and unite your tribe and plan how to bring your brand to life then register for his workshop early in the new year.  Spots are strictly limited so Andre can spend time with each participant.  This workshop is also suitable for marketers looking to understand how the best company founders think about brand, tribes, growth and safeguarding their businesses from competition. 

If you’re interested in this topic then check out the related workshops.  Use the code MOFO for a considerable discount on these programs until 5pm Tuesday 18 December.

Brand and design agencies recommended by Australian startups

We have compiled a list of brand and design agencies that have been recommended to us by other Australian startups including the agencies we used for Zambesi and Hey You.  For clarity, the agency ‘Collaborateur’ listed below created the Zambesi visual identity (logo, fonts, core design elements), tone of voice, key messages, tone of voice and promo video.  We were thrilled with their work.  The Hallway (also listed) created ‘Hey You’ from scratch including the name, logo, messaging, key interactive design elements, UX, point of sale and other marketing material.  Again, I couldn’t recommend any more highly. 

If you’ve used an agency not included on our list and you’d like to share a recommendation with other startups, please email hello@zambesi.com or leave a comment and we’ll add them. 

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Why almost every company builds the wrong things https://zambesi.com/why-almost-every-company-builds-the-wrong-things/andrianes-pinantoan https://zambesi.com/why-almost-every-company-builds-the-wrong-things/andrianes-pinantoan#comments Wed, 28 Nov 2018 21:09:04 +0000 https://zambesi.com/?p=466  

Written by Rebekah Campbell

Zambesi is a start-up with limited resources and massive ambitions.  We have two developers (Coderoo) and every 6 weeks we decide what’ll go into our fortnightly sprints.  We’ve tried a series of ‘hacks’ to get customers. These usually deliver a hit of traffic which disappears after a few days.  I know that to build a unicorn (like Canva), we’ll need to design our product for growth. And with just two developers and a ticking clock, that means making the right decisions.  

Andrianes Pinantoan joined Canva when there was 20 people, a few hundred thousand users and little revenue.  In his five years at the company, Andre led ‘Growth’ and Canva exploded from promising start-up, to billion-dollar tech unicorn with tens of millions of users, more than 300 staff and profitability.   Andre recently moved to his next challenge – leading Product and Growth at Airtasker.

I asked Andre why Canva took off like a rocket-ship while almost every other company (including us) is stuck peddling on the runway chasing customers one-by-one.  And what are some of the biggest mistakes he sees start-ups make that inhibits their growth.

This article is Andre’s approach to user conversion and activation.  To learn Andre’s acquisition, retention, referral, pricing, content and broader growth strategy and to get individual advice on your company’s growth strategy, come to his workshop.

What’s in this article:

  • Why most product teams are working on the wrong things.
  • Examples from Canva and Airtasker
  • Use instincts and research as well as data
  • Applying ‘survival bias theory’ to growth
  • What three questions you need to ask your customers
  • The four reasons customers won’t convert
  • Eliminating dead ends
  • How to maximise revenue

Why most product teams are working on the wrong things

Andre says: ‘Start-ups or innovation teams will ask their users what they want.  They’ll go out and interview customers or send out a survey and then build what they’re getting asked for the most.

The problem is that they’re asking the wrong people.  Here’s why…

Companies have four types of customers.

  1. Potential customers: people who’ve never heard of you and don’t know what you do.
  2. Casual customers: people who know about you, they might have bought something but use your product infrequently.
  3. Churned customers:  People who have used your product at least once but stopped purchasing, left or unsubscribed.
  4. Power customers: People who love you.

Power customers are responsible for disproportionate amount of revenue so often have disproportionate influence.  If you send a survey to everyone who’s used your product, then you’ll get a disproportionate amount of power customers responding.   What power customers want will be different to what the three other types of customers require before they adopt your product. If you want to grow, then you need these other customers!’

 

 

Examples from Canva and Airtasker

‘When I joined Canva, we’d survey customers and ask about our product.  Power users, who’d created a lot of designs would ask for folders and a search function so they could file and sort their designs.  But if you’re a new user and you haven’t created your first design yet, or if you’re a casual user with one or two designs then searching your designs and putting them into folders isn’t something you care about.  

In order to grow, we had to work out how to activate the new and casual customers.  But this is quite hard to do. Casual and new customers are much more difficult to reach.

We noticed a common user behaviour was to start creating a greeting card and then never publish.  I’d done this myself before I joined the company. I’d started to design an anniversary card for my wife but I didn’t finish it because I didn’t know what to write in the card.  

We did some keyword research and found a huge amount of search traffic for ‘what to write in birthday card / anniversary card etc’.  Obviously lots of people had the same problem as me. So we experimented creating templates with pre-filled in text to help new users and this improved our conversion rates considerably.`

At Airtasker we see the same thing.  Power users will ask for features to manage tasks.  But the fact that they need these features means they already use the product a lot.  To drive growth, we need to convert casual and new customers and save churned customers.

 

Use instincts and research as well as data

‘A lot of product teams make too many decisions based on data alone.  This often misses the point. For the Canva greeting card example we applied a combination of data, instinct and research.

  1. Data: Data identified that lots of first time user didn’t complete and publish greeting cards.
  2. Instinct: I had the problem – I didn’t know what to write in a card for my wife.
  3. Research: Keyword research helped us learn that this is a widespread problem.
  4. Competitors: We researched competitors like Hallmark, who’ve understood the need for pre-written greeting cards for years.

It helps to think: What is your customer’s job to be done?  In this case, it’s to make my wife happy. There will be multiple clues to help you work out the solution.  As a design company with design software, we could have remained pure to our product and not included pre-formatted copy.  But this would have missed the point. Our customers came to make a greeting card.’

 

 

Growth and survival bias

Andre’s growth theory is based on the statistical framework ‘Survival bias’ developed during World War 2.  America was losing a large number of bomber planes in the campaign over Europe. In an effort to reduce casualties, the Defence Department began monitoring planes that returned and identified parts of the aircraft that were getting hit.  Of the planes limped back to base, the crew compartment was taking on more damage than any other part of the plane. It seemed logical to add armour plates to the crew compartment so it would be more resistant to bullets.

But this had no impact in survival rates…

Statistician Abraham Wald was tasked with finding out why.  

Wald studied the data the Defence Department had collected and concluded that they’d been analysing the wrong planes.  Why? Because the data had been compiled from survivor aircraft; the planes that had sustained heavy fire and still managed to return to base to be tallied for the study. In order to know where to plate, they’d need to recover planes that never made it back.  

They discovered that planes that were hit in the engines never made it back to base.  The Defence Department adjusted the way the aircraft were plated and thousands of lives were saved.

This incident is credited as the birth of survival bias theory.  If we’re only analysing surviving customers, then we’re missing the point.

I asked Andre how we could apply this at Zambesi

‘You need to interview people who have churned or who have come to a couple of workshops but have remained casual.  These are the people you want to save. It’s hard to reach these people; they often won’t reply to surveys. Like the planes that were lost, you need to find them one-by-one.’

 

What questions to ask churned and casual customers

Andre recommends asking three questions.

  1. Why did you sign up to our service / visit our website in the first place?  What was it you wanted to achieve?
  2. Were you able to achieve what you wanted to achieve?
  3. If not, why not.

Then ask if you can contact them to dig a little deeper.

‘You should only ever ask customers about their problems.  What are their jobs to be done? What are they trying to achieve when they land on your site or use your product?  It’s your job to come up with the solution – don’t expect the customer to come up with solutions for you and take their word at face value.’

We sent out a survey to everyone who had downloaded a workshop syllabus but hadn’t attended an event and asked these three questions.  Out of over 1000 churned customers only 32 replied.

The overwhelming answer to question 3 was time and money.  A day out of the office is too long or the workshop too expensive for their business.

I took this feedback from our ‘lost planes’ back to Andre and asked for his advice.

 


There are four reasons why customers won’t convert or activate.

  1. Motivation: People aren’t motivated enough to sign-up for your product right now.  It’s not important enough in their life for them to invest the time, energy and money.  
  2. Product: People might be looking for features your product doesn’t offer.
  3. Technology: The site isn’t working on certain devices or perhaps you don’t support their preferred type of payment.
  4. Skills gap: People don’t know how to use your product.  This is a challenge for SAAS businesses in particular, and why companies like Canva and Mailchimp put a lot of effort into educating customers on the skills necessary to  use their products. For example, Mailchimp teaches its users not just how to use its product, but how to do great email marketing’

Andre’s advice for us: ‘For Zambesi it’s clear that your problem is motivation.  Think of Zambesi like a gym. A gym first needs to motivate people to want to exercise.  You first need to sell the problem – motivate people to want to learn. Then you should experiment with pricing and duration. ’

We also interviewed people who’d taken one workshop but hadn’t taken a second.  There were two clear reasons our customers churned.

  1. They’d been in the wrong workshop.  For example, they’d attended advanced growth strategy when they didn’t yet understand basic digital marketing.  
  2. They didn’t realise the other workshops existed.  They’d signed up to Mark Baartse from Showpo’s ‘Brilliant Digital Marketing’ and didn’t know about the other excellent growth programs.

The first issue is fairly simple to fix.  The second is a bigger strategic challenge of ‘dead ends’ throughout our product.  Once you’d read a piece of content (like this) or attended a community event or workshop, there’s no clear path of what to do next.

You must eliminate dead ends in your customer experience

‘A product that’s designed for growth will always be flowing.  There should never be a dead end. Even a ‘Thank-you’ page should lead a customer to the next thing.

With Zambesi, it’s clear you have a problem with dead ends after people attend a workshop.  You need to design your customer experience so there’s always a natural progression.’


How to maximise revenue

‘If your focus is to get more people using your product, then you need to interview churned and casual customers.  But if your goal is to maximise revenue, then you should interview your power customers. Find out what problems they still have, even though they love your product, and you’ll be able to work out to encourage them to use you even more.’

For this task, my cofounder and I interviewed three of our power customers.  They were all CEO or COO of fast-growing technology-enabled companies and they use Zambesi consistently to upskill themselves and their teams.  These customers didn’t have any problems with motivation. They wanted more transparency around what team members learnt at the workshops and their next goals.   And they wanted participants to return to the office better equipped to share their learnings with the rest of their team.

The solutions we’ll create to solve these problems are very different to the solutions we need to address a lack of motivation in our casual customers.  Understanding this distinction will enable us to plan our product development more strategically and set the right goals to measure the success of new features.

Andrianes Pinantoan leads a small-group ‘growth’ workshop for SAAS and marketplace businesses.  The workshop is designed by Andrianes to share his personal strategies and the approach he’s taken to rapidly scale businesses like Canva, Tyro, Spaceship, Open Colleges, Airtasker and many others.  The workshop is limited to 12 people to enable Andrianes to give individual feedback and advice to each business.

Receive $150 off Andre’s growth workshop and all related workshops listed below using the promotional code ‘GrowthArticle’ at checkout. 

Andre is also available for a limited amount of in-house training, lunch and learn sessions and consulting. Contact us for availability and rates.

If you like this article then check out our other growth and marketing programs:
Advanced programs for marketers:
Ruthless Performance Marketing with Tim Doyle, Head of Marketing and Strategy, Koala Mattress
Brilliant Digital Marketing with Mark Baartse, CMO Showpo

Programs for startups: 
Growth Hacking with Jared Codling, Australia’s best known growth hacker and Slingshot Mentor
Social Media Bootcamp with Tim Hill, Cofounder Social Status

 

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Social media casino Exposed https://zambesi.com/social-media-casino-exposed-5/andrea-culligan https://zambesi.com/social-media-casino-exposed-5/andrea-culligan#respond Wed, 28 Nov 2018 20:34:27 +0000 https://zambesi.com/?p=1126 Are generally cultural brand-new storage devices on the internet gambling house hobbies dictated? Think about in order to expect one more time period that 24 hours of your energy surpass by means of out and about perusing in the direction of Facebook, Instagram, Twitter and then YouTube. Court mass media is certainly area of each of our everyday process, in terms of almost all people immediately holding instant typically the strategies to locate your own Online world using smartphones and in many cases tablets. This type of fixation in terms of favorable media programmes offers triggered integrating a number of really advanced pastimes weight loss applications administrators usage systems prefer Facebook to make sure you touch a person’s games. 

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How to start a start-up – the first 12 months of Zambesi.com https://zambesi.com/starting-a-start-up-the-first-12-months-of-zambesi-com/rebekah-campbell https://zambesi.com/starting-a-start-up-the-first-12-months-of-zambesi-com/rebekah-campbell#comments Tue, 20 Nov 2018 09:51:37 +0000 https://zambesi.com/?p=417  

Starting any company is hard.  As an entrepreneur full of purpose, vision and optimism on the cusp of launching a new startup, it’s easy to forget how hard the first year will be. I wrote about the company purpose, my personal mission and the thinking behind the Zambesi business model in my previous post.  This post is a more practical account of our journey and lessons learnt along the way. 

In the spirit of radical transparency, I’ve outlined below how I approached building this start-up differently to my first two: how I chose a name, built technology (the MVP), funded the company, marketed with no budget and identified a cofounder.

A large proportion of our Zambesi community are company founders, leaders and start-ups.  From the outside, everyone’s business looks impressive.  We all put our best face on in public so people use our products and invest in our businesses.  But behind the inspiring LinkedIn profiles there’s always a different reality.

I started Zambesi because I wanted to have impact.  And I felt that Hey You was a six year MBA – it would be crazy not to actually practise.  It’s been a year since I launched the company, and it’s been the hardest, happiest year of my life.  Zambesi is still in its infancy; only time can reveal to what extent we get things right.

I hope this analysis of our first 12 months helps other founders in the early stages of their companies.  I’d love to hear your feedback, or anything about which you’d like further info, in the comments at the end.

 

Choosing a name

In 2010, I spent $28,000 on the domain name ‘Posse.com’, buying it on a domain auction in the middle of the night.  Next day, I felt crazy.  How would I explain to my Mum that I’d spent the deposit I’d been saving for a house on a domain name? 

Posse went onto merge with Hey You and the name and domain became irrelevant.  But still, the investment was worthwhile.  Having a name that sounded ambitious, that investors, potential team members and customers could imagine as a big company helped to get people on-board.

When we merged Posse, Beat the Q and e-Coffee Card, we worked with Sydney agency ‘The Hallway’ to create the Hey You brand and name.  We developed a brand blue-print for the company and a lot of very smart and creative people produced ‘Hey You’.  We were thrilled with their work.

This time, as a self-funded start-up, I didn’t have money to engage an agency.  I tried to replicate as much of their process as I could and roped in some friends to help brainstorm ideas. Our aim is the transformation of the life-long careers and business education of entrepreneurs.  I know the value of a good name and brand; my aim was to create a name we could grow into.  We could change logo, fonts and colours as the company progresses but we’d have to live in our name for the next ten years or more.

I wrote out our purpose (‘why statement’), unique value proposition and values: 

Why: ‘The world thrives when everyone does extraordinary work.’

How: ‘By giving everyone access to the most extraordinary practitioners in technology, marketing and leadership.’

We value: Learning before teaching, Authenticity, Extraordinary expectations, Community, Accountability

I took a stack of post-it notes, wrote words that came to mind when I thought about my vision for the business and posted them onto our fridge. My husband Rod participated too. ‘Flow’ stood out as a descriptor of how skills and knowledge would be shared from expert to learner to community to expert.  As did ‘life’ and ‘eco-system’.  I imagined a representation of these ideas as a river. 

I jumped onto my computer and googled ‘biggest rivers in the world’.  Amazon, of course was taken – but what a great name!  As my eyes drifted down the list ‘Zambesi’ jumped out.  Growing up in New Zealand, my favourite clothing store was called Zambesi.  I entered Zambesi.com into my keyboard and to my surprise, found a generic affiliate sales site.

I looked up ‘Who.is.com’ and found the contact details for the owners – an affiliate marketing company with lots of high quality domains.  I wrote an email to ask if they were open to selling Zambesi.com and offered $2000.  I wanted to offer enough so they knew I was serious, but not so much that I’d over-pay.  They came back to me almost immediately and by the next day we’d agree to exchange the name for $12.5K.

Before I completed the transaction, I engaged LegalVision to run a trademark search in all major markets (Australia, US, Europe).  Lots of companies use the name ‘Zambesi’ (the clothing label, a mechanic etc) but none in the classes I needed to trademark.  The trademark attorney advised me to go ahead.  The following day I drew down $12.5K from our mortgage, bought the name and immediately filed trademark applications.  These were granted several months later.

One year in, and I am in love with our name.  It speaks to our purpose, it’s ambitious and it sounds like the next great global internet company.  The investment in an expensive domain, for us, was worth it. 

Building an MVP: Technology as a non-technical founder

When I had the idea for Posse.com, I had no idea how to build technology.  I hired a Sydney agency who outsourced much of the work to India. 

At product design meetings I’d feel nervous to suggest that a button should go here or that I didn’t like a page layout.  When I’d question why links didn’t work or why the product was taking longer than projected, they’d baffle me with complicated explanations.  They were the experts and I was inexperienced.  Who was I to question?

The first version of our website took several months and cost more than $100,000. I worried that I was getting ripped off.  I worried that the team weren’t building a quality product. But who was I to question?

One Tuesday in 2011, I attended the Tech 23 conference in Sydney. At the lunchbreak I made a beeline for Lars Rasmussen, the cofounder of Google Maps.  I described my idea and my challenge in building the technology.  He agreed to meet and gave me generous advice. He introduced me to a star from Google who joined to lead our development team.  Lars eventually joined the board and became a wonderful advisor and friend.

Much has changed since I built Posse.com.  It’s now easier to launch an MVP without spending hundreds of thousands on technology.  For Zambesi, my MVP was a WordPress theme linking to Eventbrite for sales.  I drew up the wireframes on printer paper and asked the Fishburners network to recommend developers who could help me customise WordPress. 

I received development quotes ranging from $3000 to $20,000 – for the exact same product spec!  I selected a group called Coderoo who were based at Fishburners, specialised in MVPs and whose quote seemed reasonable.  We negotiated and signed an agreement which outlined the scope of work and delivery timeframe, specified how code would be stored so I could access it at any time (important for when we want to stop working together) and assigns all the IP to our company.  

Now I have experience working with a range of development teams, I’m much more confident and realistic in my approach.  The website crashed the day we launched and again, the product took a little longer than projected.  But the Coderoo team were always in communication and they worked really hard to get Zambesi up and running.  We held a launch event at the end of October and the two lead developers worked through the night for several days to ensure it was ready.

Coderoo continue to develop Zambesi.com today.  We still use WordPress with lots of customisation, we’ve integrated Mailchimp and soon we’ll add an existing learning management system to enable us to offer our community a range of learning and networking opportunities online. 

It’s now quite easy to build a company enabled by technology (like Zambesi) by licensing and customising existing technology (WordPress, Mailchimp etc).  That’s why it’s not important for these types of businesses to have a technical cofounder. It’s much harder when your business is technology – like Canva or Atlassian. Then, I’d suggest recruiting a senior technical person to your founding team.

For Zambesi, I looked for a technical partner that I could trust, who cared about our product and who I’d enjoy working with.  Coderoo are perfect as they’re upfront about time and cost, they communicate well, they’re pragmatic and don’t get too frustrated when we alter designs (which is impossible not to do).  The website occasionally crashes but they’re always available and fix it quickly.  I can tell they work very hard and care about the quality of our site.

 

Building an MVP: Design

As I mentioned earlier, we couldn’t afford to engage a big agency to create our brand or web design.  But I wanted to launch with a product that looked professional. 

I advertised for ‘paid design interns’ on The Loop hoping to find a super talented design student who could create something great on a low budget. I recruited two excellent interns who helped design marketing collateral but didn’t have the experience to create a brand or high quality interactive designs for web and mobile.

I found an excellent agency called ‘Collaborateur’ who enjoy working with start-ups.  They designed our logo, visual identity and created the first promo video on a very scaled back budget.  The work still cost around $10K (total).  It was a worthwhile investment as our product will compete with the training institutions that we’re disrupting.

We’ve now hired a more experienced designer who we also recruited using The Loop.  She works with us one or two days per week which enables us to constantly build new product and test and update designs as customers use our site.

 

Funding

When I launched Posse, I’d made money from a previous business in music.  Unfortunately, I spent a lot on the outsourced development team so it became clear that I’d need to raise capital.  I organised a few meetings with people I knew.  The night before my first pitch I called a graphic designer friend and asked ‘Do you know how this PowerPoint thing works?’  There wasn’t any pitching or capital raising classes like there is now.

I pitched the business more than 400 times before closing a Seed Round of $1.472M.   The money came from 23 different private investors.  The day the deal closed, I met our lead investor and lawyers at a firm in the city.  It was raining outside.  After a year of pitching and no after no, I’d finally done it. 

We all shook hands and signed the documents.  I expected we’d have lunch to celebrate but everyone was too busy.  As I walked through Hyde Park, back to my office in Surry Hills in the rain, it was silent.  I felt exuberant, terrified and very alone.  I was responsible for not losing all that money!

I hired a development team led by Alex North from Google, a marketer and a sales person.  Before I could say ‘minimum viable product’ we were burning $80K per month.

The first version of Posse did work but it became clear quite quickly that we didn’t have the right business model.  It would always cost us more to on-board new customers than we’d make in revenue.  I didn’t want to let down our shareholders and employees by failing so we pivoted and then pivoted again, finally integrating with Beat the Q to form Hey You.

This time, with Zambesi, I didn’t want to take on external funding until I knew the fundamentals of the business worked.  Instead, I applied for an MVP Grant from Jobs for NSW and received $25K.  Zambesi generated revenue from day one so I was able to fund some basic development and design.  I didn’t take a wage for the first 12 months.

We have now raised a small amount of capital from two excellent investors.  We have a small team and we’re frugal with our cash.  We’re still very ambitious but we’re building a business for the long term; not a start-up that may or may not hit.  Maybe because I’m a parent now, I won’t take the same risks that I would ten years ago.  I’m also not willing to take on the mental health burden of other people’s money without strong evidence that the business will succeed.

 

Marketing and hustling

30 minutes after switching on Zambesi.com and our associated social media sites I received an email.  Someone was interested!  The first words of the message ‘It’s so great to see…’  followed by ‘a group to celebrate the Zambesi river’!  My initial excitement dissolved into reality.  No one knew or cared that Zambesi.com existed. I would have to promote the site to customers one-by one, by myself with no money. 12 months of hard-core hustling ensued.

 

Here’s what worked:

We established a partnership with Start-up Daily.  We helped to create two articles each week of insights from an expert on the platform.  They linked through to the course page on Zambesi and offered a discount code for their readers.  As the first articles were published we started receiving some website traffic, course enquiries and sales.

I tried to set up similar partnerships with some of the larger news publications.  Everyone was ‘interested’ but I found myself wasting time taking meeting after meeting to find a decision maker.  I tried another tactic: write articles myself and send them to journalists for publication. It worked!  It turns out that journalists are stretched and love it when you send them good finished articles.  Within weeks we had several articles in the Sydney Morning Herald all linking back to Zambesi.com.

I ran a launch event at Barangaroo and invited everyone I’d ever met.  I had an Upworker trail through my personal email accounts for the past five years and sort every name and email address into location based spreadsheets.  I invited more than 1000 people to our launch party and hundreds more on LinkedIn.  450 people registered and at least 350 came along.  Five of our workshop experts spoke at the launch and we sold 62 tickets on the night.

We’ve since run dozens of community building events.  These range from short large-group workshops in partnership with City of Sydney, free leadership events in partnership with KPMG, not-for-profit focussed events with Gilbert & Tobin, financial training events with Hall Chadwick and many others.  We try to run a community building event each week.   These have helped us to build momentum and our email database.

I’ve tried Facebook and LinkedIn advertising.  I found advertising on LinkedIn very expensive and strategically using Sales Navigator much more effective.  Facebook advertising is better but ‘interest targeting’ isn’t great.  Re-targeting and Lookalike audiences are much more effective but we don’t quite have enough traffic to do this well.

 

We need to improve:

We built a Facebook Group with the intention of creating a community for members to ask experts and each other questions.  The group has more than 1000 members however we haven’t yet done a good job of activating the community.  That’s something we’re focussed on improving now.

We’ve built our EDM database to almost 10,000 and it works to help promote workshops.  We can sell out most programs by featuring them in the newsletter.  But I recognise that the newsletters we send don’t provide much value to readers other than to promote a workshop.  As a result, the unsubscribe rate is higher than it should be. We’ve decided to stop sending pure promotion EDMs and focus on creating valuable content for our community.

 

Finding a cofounder

I’ve started businesses as a sole-founder and I’ve worked in partnership.  The top reason start-ups fail is the founder giving up and the second is cofounder bust-ups. Cofounders are less likely to give up but sole-founders won’t fall out with themselves.

Even though I’d started Zambesi alone, I knew from the outset that I wanted a cofounder.  To be clear, I wanted an equal, not a senior support person that I’d still be the boss of. I’ve had fifteen years of experience working in my own companies and I’m aware of my weaknesses.  And the road of a sole-founder is very lonely.  My most vivid memory of pitching in Silicon Valley is of sitting in a hotel lobby having a glass of wine or in a salad cafe by myself at the end of each day.  It’s no fun! Running a business takes so much of your life.  It should be fun.

I looked to the most successful cofounder relationships I know well (Canva, Atlassian etc).   I mapped the personality traits and skills of each founder and created the perfect founder profile.  It would be impossible for a single founder to possess all these qualities as often the conflicting attributes lead to the best decisions.  For example, one founder could be extremely diligent and compliant with rules; the other scrappy, fast with an ‘ask for forgiveness not permission attitude’.   Both are important.  I crossed out my own personal traits and skills and developed a profile of my perfect match.

From previous experience, there are other important considerations in choosing a business partner.  It’s important to have different perspectives, attitudes and skills where it makes sense.  It’s also important to have a lot in common such as vision for the business, culture and values, worth ethic and work quality.  It’s hard to know whether or not these things will all click until you start working together. 

Armed with a very clear profile, I started taking meetings. Friends and advisors made introductions and suggestions.  It felt a lot like dating.  I met lots of wonderful people but none felt quite right.

I met Kim randomly at one of our community events in February. She was a senior executive at NAB and we arranged to catch up.  It was clear from the first meeting that we shared the same values and passion for the purpose of Zambesi.  It was also clear that she was exceptionally smart and not afraid to challenge my strategy and assumptions.  Kim offered to help out in her spare time.  She was diligent and worked hard.  We started meeting every Monday and agreed what we’d each do that week.  We’d both always follow though – nothing slipped.

If you’d keyed my detailed ideal cofounder profile into a computer, it would have spat out a photo of Kim.  It was a perfect fit.  But most importantly, it felt right.  I knew she was someone I’d look forward to hanging out with every day.

We had the hard conversations early on: equity split, roles, decision making rights etc.  We negotiated with each other seamlessly.  We listened to each other’s perspective and compromised when required. I think the way people negotiate is a big indicator of the relationship that will follow.  No matter how well you know someone or how much pre-vetting you do, building a business with a cofounder is always a leap of faith.  

I’m thrilled to report that 12 months from switching on Zambesi.com for the very first time, we are making good progress.  There’s now extraordinary 40 experts leading in-house and public programs on everything from cybersecurity to performance marketing, public speaking to tech team leadership. 

Our signature programs are 12-person, one-day intensives with an industry leader who can give feedback and advice on the participant’s individual situation.  It’s so valuable to spend a day with Andre from Canva and to ask questions about your growth strategy.  An online course can never provide this.

Half of our business is in-house training where companies will engage an expert or a series of experts to provide training or consulting for their team.  We also regularly program conferences including Blackbird VC’s ‘Sunrise’ event, customer events for NAB and in-house talks for teams such as Fairfax, Finder and Tourism Australia.

Looking back, we’ve achieved a lot in the first 12 months, but progress always feels too slow.  We secured a partnership with WeWork, launched our first programs in Brisbane, Melbourne and Auckland and hired our first team member, the wonderful Alyssa, who you’ll hear from when you take any of our programs. 

We owe a huge thank-you to everyone who has supported us so far.  Thank-you to everyone who’s come along to our workshops and community events – I recognise these have not all been perfect and we’re working hard to establish a framework that will create a more predictable customer experience. Thank-you to the experts who have trusted us with their reputation and have put so much care and work into developing and leading programs.  Huge thank-you to Sebastian, Luther, Leo and the team at Blue Chilli who provided us with office space and boardrooms as we established the business.  You guys are such great supporters of our ecosystem. Thanks to David Kenney, Bianca, Alicia and the team at Hall Chadwick for your partnership and support.  And our other generous partners: KPMG High Growth Ventures, Start-up Daily, City of Sydney, Gilbert & Tobin, Sydney University, Blackbird VC and WeWork.

 

This is just the beginning…..

 

 

Rebekah Campbell leads a small capital raising workshop for startups. The one-day workshop is designed to give you the best chance possible of successfully raising capital and includes guest legal and investor discussions. 

We also have an exclusive one-off workshop coming up with Rebekah Campbell and Michael Ruhfus, Founding COO Freelancer.com. The workshop Launch Your Side Hustle  will cover; start up strategy, business models and how to test yours without spending lots of money, how to engage engineers and how to develop your launch plan including growth tactics to get your first customers on a low budget. 

Suggested courses for start-ups:
Raise Capital On Your Terms with Rebekah Campbell, Cofounder Zambesi and Hey You
Growth Hacking with Jared Codling, Growth Hacker
How to Manufacture Products in China with Elyse Daniels, Founder Exodus Wear
Social Media Marketing Bootcamp with Tim Hill, Founder Social Status

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Zambesi Story Part 1: Purpose https://zambesi.com/zambesi-story-part-1-purpose/rebekah-campbell https://zambesi.com/zambesi-story-part-1-purpose/rebekah-campbell#comments Wed, 31 Oct 2018 15:03:36 +0000 https://zambesi.com/?p=325 In February 2016 my life changed with the arrival of my first child, a baby girl called Eve. At the time I was running Hey You, a company I cofounded by bringing together Posse and Beat the Q in 2014. We had around 40 team members in Sydney and Manila and were growing at 5 – 10% every month.

I found pregnancy and the first 6 months of motherhood extremely hard. I was exhausted, emotional, and, looking back with perspective, slightly crazy. The board and I decided to bring in an experienced CEO to help run the business.

Nine months later my energy was back but I was starting to feel restless. Hey You was now running smoothly with new leadership at the helm. I enjoyed selling the product but I wasn’t needed to drive the business anymore.

On a Wednesday in November I travelled to Melbourne to promote Hey You to a pub group. An ordering app could help them sell more drinks. It was a long day, and on the flight home, asked myself, in a moment of honest reflection, ‘Did I use this Wednesday in the best way possible? Was this very best use of my energy, passion and talent?’ I imagined myself at age 90 looking back on my life. If every day is a gift, how wisely had I spent this one?

Night after night, I found myself reflecting on variations of the same question. On too many nights, I didn’t like the answer. I struggled to sleep and I knew I needed a life change.

My last day at Hey You was 31 March 2017: I had no idea what I’d do next. I had a one-year old in day care 3 days per week, and lots of time to think. I knew I wanted a second baby and that the 9 months before and after child bearing are incredibly hard. I was tempted to take a 9-5 corporate job, a plan I abandoned after a couple of early discussions.

I knew that I needed to go to put my head on the pillow at night and be proud of what I’d worked to achieve that day. I needed to start another business, and, this time, with a mission I cared about. All the entrepreneurs I respected had built long-term businesses that were, definably, their ‘life’s work’.

I asked lots of friends for advice, including Melanie Perkins from Canva who is the wisest person I know. She said, ‘Before you start a business, it’s most important to get the foundations right. The problem you decide to solve and your vision for the company are very hard to change.’ There’s much written about how to launch an MVP, test and pivot for product market fit, but very little about getting the foundations right; finding a problem and developing a vision that’ll continue to drive you for years to come.

I decided to take some time to think about the problem area. I attended the American Australian Young Leadership Dialogue in Melbourne and Washington and joined the NSW Government Innovation and Productivity Council. I read, listened and learned about the biggest challenges facing our generation. I wanted to identify a big and important change to which I’d be well placed to contribute.

The changing workforce will affect all of us. It’s clear that a large proportion of jobs will be displaced in the coming decades; wage growth has stagnated despite growing productivity; soon, more than half of all workers will be sole-preneurs – untethered from an organisation and unable to access employment benefits. Business and government need to work together to transition jobs to the new economy – otherwise the societal impacts will be huge.

It’s hard to predict what the workforce will look like in the future. But, one thing is clear – the rate of change is speeding up and is only going to accelerate further. Businesses and professionals will need to adapt, and learn new skills ever faster. Anyone or any business who stops innovating, even for a short time, will be left behind.

It’s also clear that our approach to education must change. The design of educational institutions – even the most modern training colleges – won’t be able to keep up. Suppose a college creates a ‘digital marketing course’. By the time they’ve built content, designed assessment tasks and trained a facilitator, it’s likely that some aspect of digital marketing will have radically changed. The same in cybersecurity, data, dev-ops, and even leadership. 2019 will bring new challenges and opportunities that need to be addressed. Any course with government accreditation carries an instant obsolescence guarantee, as accredited programs can’t alter their content without 12 months’ notice.

I don’t think we’re about to see an end to university degrees – students still benefit from expanding their minds through further education after high school – but I have noticed the start of a decline in the significance of university qualifications. In 2010, I met with the lead recruiter at Google for some advice on recruiting my first development team. He directed me to only hire engineers with degrees from a certain group of universities and to stay clear of candidates from others. Last year Google, along with Apple and PWC, announced they no longer require candidates to have degrees at all.

These organisations now seek people with skills and a propensity to learn and adapt. And the 50% of the workforce who work for themselves are much more focused on developing the best, leading edge skills, than on promoting themselves with a government approved stamped piece of paper.

This leads me to Zambesi. When I searched deep into my core beliefs and drivers, my primary philosophy is that ‘The world thrives when everyone can do their best work’. This would be the foundation of our new company.

At ‘Hey You’ and my earlier business ‘Scorpio’, my team and I would often run into obstacles that prevented us from doing our best work. I struggled to make the right decisions when I developed software for the first time, I made mistakes in capital raising, our marketing person needed to improve their use of analytics, I didn’t understand how to optimise our app or SEO our content, I wasn’t sure if our designer was using best-practice user interaction techniques. Was our sales team adapting to perform at their best? Were we on top of the latest cybersecurity threats? Were we using agile processes the right way and should our development team be getting more done? Was my board contributing as well as other similar boards? How did our culture and recruitment practices compare with peers? Is my business missing out on the lessons of others? And what about my own leadership?

We designed Zambesi as a structured collaboration network for professionals and business that would enable everyone to do their best work. No MBA program can equip you for the obstacles you’ll come across as you build your company or develop your career. You’ll need to constantly dip in out of learning and, ideally, access the best minds possible to assess and guide your individual situation.

We’re working to curate the best people to help you to do extraordinary work. Our signature programs are face-to-face, full-day intensives in groups of twelve people. Everyone who leads a Zambesi group is an expert with current experience: they create and own their content and adapt it every time they share it. Our ‘growth’ programs are led by Mark Baartse (CMO Showpo), Andrianes Pinantoan (Head of Growth Airtasker, formerly Canva) and Tim Doyle (Head of Growth and Strategy Koala). They teach their techniques and provide feedback and guidance to everyone in the room.

Zambesi programs are current and fluid (like the river), with the best minds in town, in a format that enables support for your individual situation. Zambesi is for people who ‘do’.

The next blog is our business story including the chaotic first months of ‘hard-core hustle’, the coming together of co-founders with a common purpose, refining our strategy and, most importantly, the arrival of a new baby boy!

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