From the Ash's

Marketing is an intrinsic part of any successful venture.  It is the link between the customer and the company - both in learning what the customers want and in promoting both the company to both potential customers and returning customers.  Everybody wants to back a winner, and successful marketing helps give them just that.

But wait... I know how to market!  I mean, I see it all the time on TV and in magazines and newspapers, how hard can it be?

Sorry to take you down a notch, bro, but it's a lot more and a lot harder than that... when it's done it right, it really takes work.  Think about it.  How many advertisements can you remember right now?  I bet you can remember a couple.  What do you remember about them?  Can you name the companies and products associated with the ads?  If you can, that's impressive.  Have you actually bought the product?

That last question's a doozy isn't it?  You see television commercials aren't very useful for most marketing campaigns.  They're expensive and they cover too many audiences.  Most magazines and newspapers are just as bad - static advertisements that are directed at no one in particular in hopes that someone who reads it will be inspired to buy the advertiser's products.  Such marketing campaigns are the product of lazy decisions and following the groupthink that is so common in bureacracies and big companies.

The Five Pillars of Marketing 

Truly innovative marketing encompasses developing products that solve specific needs of specific customers and convincing those customers of their need for the products so much so that they feel a need to purchase those products.  Such marketing encompasses five pillars:

1. Know thy customers
2. Pursue your customers relentlessly
3. Incorporate customer feedback
4. Get referrals
5. Cross-sell

Know thy Customer

Sun Tzu, ancient Chinese wiseman and military advisor, is famous for saying "know thy enemy and know thyself".  However, in this modern world I would say "know thy customer and know thyself".  What I mean by this is that you must understand your customer and their needs and how you can help meet their needs in order to be both a successful marketer and a successful entrepreneur.

Don't listen to silly focus groups.  Get in there and get to know your customers!  Bob Jones, a brilliant marketer who's been leading product development of all sorts of nutrition bars over the last two decades, has a favourite phrase, "so we held some focus groups, but we threw out the moderator and actually asked our customers questions".  It's great!  He means that he actually went into a room with twenty or more of his potential customers, got to know them, and really learned their pain.  He got to know the interesting tidbits that none of his competitors knew.  For instance, with one product he learned that diabetics hate being treated like they're sick.  Therefore, he packaged his product like an energy bar, which gave them both the peace of mind they wanted and treated them like adults!

When you really get to know your customer, you know what keeps them up at night, and you know the tidbits about them that will enable you to hold an advantage over your competition.  I guarantee you that most of your competition is not this meticulous and interested in solving their customer's problems.  That's why startups exist.  That's why you can steal marketshare from big corporations.

Pursue Your Customers Relentlessly

That's right!  Chase them down!  Don't let them get away!  You need to have an integrated approach to reaching your customers, one that both establishes your credibility and fosters their desire to purchase your products.  I know, I know... you're worried that you're going to overwhelm them or seem to aggressive.  I have too, but think about it: is it overwhelming when you see the CEO of GE on CNN talking about his company's new approach to product development, see some advertisements on television touting GE's new products, and then receive some mailers offering you discounted prices if you make a purchase immediately?

Maybe that's aggressive.  However, it seems to me that chances are the only thing you will really take note of is the mailers.  You won't really remember everything else, but you may think that GE is an innovative company with good products.  That's what sets the stage for the mailers.  The mailers seal the deal.  They answer the "why now"... "Honey, if we don't buy it now, we may have to pay more later".  That's ridiculous, but it is how people think.

There are three things to consider in any marketing campaign: Why us?  Why our product?  Why now?

Incorporate Customer Feedback

It's important to always improve your product.  Remember, if you're successful, your competitors will be trying to emulate you as best they can.  That means that you have to stay a step ahead of them by continuing to be the expert on your customer's needs.  Therefore, you need to actively solicit customer feedback on your products and incorporate that feedback into new versions of your products.  Happy customers lead to more customers and to repeat customers, so making extra efforts to look like you're taking their complaints to heart will go a long way to increasing the number of customers you have and through that, your revenues.

Get Referrals

If your customers like your products, they'll refer you to their friends and acquaintances.  That's the marketing you can't buy!  What's more effective than someone's good friend saying "hey, this product works really well for me" and in the reverse "man, I really hate that product, I can't believe I wasted my money on it".  These references are probably the most powerful influencing tools you have access to.

Wait.  How do I have access to that tool?

It's simple: give your customers an incentive for making referrals.  If your products are expensive, you can give a gift certificate or discount a payment.  If they're cheap, you can offer them a free perk or a one-time 20% off card.  It's amazing how quickly people will sell out their friends.  Especially since such referrals are now just a way of life and not considered actually selling out one's friends (that's another topic for another day).

As your marketing campaign matures, be sure to capitalize on those referrals to bring in the easy customers.  It will show in your adoption curve and in your revenues, as well as in the positive review you will generate for the product.

Cross-Sell

The easiest customers you will ever acquire are the ones you already have.  If they bought once from you, they'll buy again... as long as you don't make a lousy product in the first place.  If you do make a lousy product, low numbers of repeat customers may be a signal that your product is lusy and needs to be reworked.

The cost for the average bank to acquire a customer is around $350.  Other industries are similar.  That means that it could easily cost you $350 to acquire each customer you get.  How on earth are you going to make that back?!  It's going to have to be by selling an awful lot to each of your customers.  And that's exactly how you should do it!  People are more likely to buy from a company that they've already bought from because that company's known to them, they know what to expect.  That means that it's easier for you to convince your current customers to buy more products and services from you than it is to convince non-customers to do the same.

In the case of many products you can sell a service to compliment the product.  For example, Dell sells service warranties and installations to its customers.  These services are easy ways to take advantage of customers that are already making a purchase.  How easy is it to install a desktop pc for someone?  How about providing technical support for a service contract?  That money's almost pure profit.  You don't need any extra infrastructure to sell those services.  So remember, integrate services and products to sell more to your current customers.

Posted by ash.dyer at 11:09 PM | Permalink | Comments (0) | TrackBacks (0)

There are a number of disciplines that comprise a mobile robot.  However, it is usually more worthwhile to approach the development of autonomous systems through understanding the basic subsystems that make up an autonomous or mobile robotic system.  I wrote this primer to help bring Aero/Astro students up to speed on autonomy for a class in designing a Mars rover, and I thought it was worth posting here.

Introduction

There are a number of ways to break up the subsystems involved in an automous mobile robot.  One of the easier ways is to break it down by functionality and work up from there:

• Locomotion (Driving/Walking)
• Manipulation
• Sensing
• Localization
• Mapping
• Path Planning (Navigation)
• Decision-making

These seven disciplines are combined in different ways to form the subsystems of a mobile robotic system.  (Note: the entire robot is viewed as the "system" hence all of the major components are called "subsystems" instead of systems.)

Oftentimes one can group these seven functions into two or three major subsystems: hardware control, navigation, decision-making.  The hardware control handles the execution of locomotion and manipulation commands, as well as managing incoming sensor data.  Navigation includes localization and mapping which feed into the path planning that does the actual robot navigation.  Finally, the decision-making chooses the series of actions to pursue in order to complete the goals set for the robot.

Usually the architecture of the system is broken into three subsystems: navigation, visual servoing, and decision-making.  Visual servoing is the use of a video camera to navigate tough terrain and complete mission goals such as picking up or placing objects, taking pictures of interesting features, or navigating narrow or difficult terrain.

After I discuss the three subsystems, I will cover the basics of the disciplines that are not as explicit in the subsystems, such as locomotion and sensing.

Navigation

Mapping

Mapping is creating and managing a map of the robots surroundings.  As the robot collects data on the world around it, it updates the map with this data.  Many robots begin with an a priori map, a pre-made map that's uploaded to the robot to give it a starting place.  Other robots have a complete map that's never updated, and other start with no map at all.

The map is used by the path planner to decide how to get the robot to its goal location.  It can take many different forms, two common ones are a grid or a potential field (where obstacles have virtual forces that increase as the robot nears them).

One of the challenges faced in generating maps is the management of limited data storage resources.  For example, one cannot generate a map with a fidelity of two centimeters square if its supposed to span a square mile - the amount of data storage is gigantic.  To work around this issue, roboticists often use a global map that's comprised of a number of smaller local maps that describe important or dangerous areas in detail.

Localization

Localization is the process of using salient features in the surrounding environment to ensure that the robot has correctly identified its position in its map.  This process can be done using all sorts of methods including beacons or pseudolites, sonar or laser ranging, or visual identification.  The localization procedure is used periodically to correct the errors in the robot's "dead-reckoning" or where it believes itself to be based on measurements of how far each wheel has moved.

SLAM!

SLAM stands for Simultaneous Localization and Mapping and is one of the biggest challenges in modern mobile robotics.  When a robot has to generate its map at the same time that it is trying to find or correct its position in that map the errors can become enormous.  There are now dozens of techniques for conducting SLAM, including using "breadcrumbs" or past sets of sensor data that are compared against the latest dataset to see if they match, thereby indicating the robot has returned to an area it has already been through.

Path Planning

Path Planning is the part of the navigation subsystem that plans a path from the robot's current location to the location it intends to go to (provided by the decision-making subsystem).  The complexity of the Path Planner largely depends on the type of map that is used.  In a grid map, the Planner must compute a cost for each cell of the grid, which can become complex and processor intensive.  In a potential field map, the Planner just has to follow the "path of least resistance" and is very simple.

Visual Servoing

Vision

While vision sometimes will play a role in updating data in the map, it is much more important for visual servoing operations.  In these operations, the vision system must be able to identify an object of interest, classify the position of the object relative to the robot, and provide enough data that the robot can "servo" or move to the object and interact with it.  The vision system will often also serve as the main sensor for interaction with the target.

In some robotic systems, the vision system may be replaced by another system such as a radar system, if say the target were burried underground.

There are many different methods for manipulating data from the camera sensors to extract information that is useful for the robot.  Such methods focus on picking out distinct collorations, detecting motion, and/or detecting edges of objects.

Manipulation

Manipulation is a key feature of many visual servoing subsystems.  Manipulation is the use of a robotic arm to interact with the environment.  Oftentimes the robot will have a set of functions it will call in order to fulfill different roles with the arm. 

Servoing

Servoing is the small movements and adjustments made by the locomotion system in order to properly position the sensor or grappling arm in order to achieve its goal.  This movement is different from the path planning situation, because it requires a lot of small movements or a smaller "loop" from the sensor input to the output of the motors.

Decision-Making

The decision-making plans a series of actions in order to achieve a goal.  This planning includes setting goal locations for the Path Planner and deciding when to switch control of the robot between the Path Planner and the Visual Servo. 

The simplest form of a decision-maker just arbitrates between the Path Planner and the Visual Servo.  However, highly complex systems can do much more, including layout detailed contingency plans and failure modes.

Locomotion

Locomotion systems abstract the low-level movement commands sent to the motors away from the autonomy software.  These systems usually take in a goal location in either an x,y or an r,theta coordinate system to direct it to traverse to the next waypoint set by the path planner.  The locomotion system then uses "dead reckoning" based on odometry data (data on how far each wheel or leg has moved) to traverse to the next waypoint.

Sensing

Sensors are also abstracted from the autonomy software.  Sensor processing is done in the low-level software and the smoothed data is sent to the mapping software in the form of line segments or obstacles.  The advantages to this architecture include the ability to support many different sensors with the same interface and the ability to include a reactive layer (like human reflexes) in the sensing layer of the architecture so that the robot can stop immediately if it bumps into something or detects an object that is too close to the robot.

Posted by ash.dyer at 01:48 PM | Permalink | Comments (0) | TrackBacks (0)

In modern-day distributed companies with employees spread across the globe, it is critical that all of the employees are on the same page.  While many startups still have all of their employees geographically co-located, it is just as critical to make sure everyone is working towards the same goal.  One of the best tools corporate leaders and entrepreneurs have found to bring teams together is a well-defined mission.

The Components

Well gosh, that's simple, I'll just write a sentence to describe my company's mission and we'll be done with it.  Everyone will be on the same page and we'll be good to go.  Eh, not quite.  Does anything good really come that easy?  I'm just going to go out on a limb here and say "no".  There are a number of components that go into formulating a strong mission statement.

These components include your company's mission, it's core values, and the core value proposition.  That is to say it's the what, why, and how of your company. 

For example: Google's mission is to "organize the world's information"; Google values protecting users' privacy, providing value to users through a multitude of services, and making its services free to its users without annoying advertisements (achieved through the more aesthetic Google AdSense); Google provides value to its users by applying its search technology to improve the usefulness many common IT solutions, such as email, instant messaging, and getting directions.

The Purpose

The mission statement is important to everyone involved in the company, from its board of directors and CEO to its customers and vendors to its normal employees.  To each group it means the same thing: a guiding light to aid in making decisions. 

A strong corporate culture focused on a well-stated mission enables senior management to push decision-making down to lower levels of the corporate structure while still trusting that these decisions will be in the best interests of the company.  It expresses to customers the type of services and products they can expect and to vendors the types of behavior that will be tolerated.  It also helps identify potential strategic partners and lay the ground rules for interactions with partners.

Formulating Your Mission Statement

When you sit down to formulate your mission statement, include all of the people I described above in your planning process.  If you already have a team, senior management, employees, customers, partners, or vendors, involve them in the process.  In particular, solicit the opinions of your internal groups (team, employees, management) constantly.  You'll probably only want to run a couple of drafts by your external groups (customers, partners, vendors) to get their input.

Your Mission

The expression of the mission is a few sentences - no more than a paragraph - that sums up the altruistic reason your company exists.  If you don't have an altruistic reason your company exists and you're stuck with "my company exists to make me money", then you might as well just stop now.  Think long and hard about what you're trying to do and why you're doing it.  Remember, Google says their mission is "to organize the world's information" and CASHFLOW Technologies' (run by Robert Kiyosaki, author of Rich Dad, Poor Dad) mission is to "help people become financially independent".

The purpose of this section of the mission statement is to set the broad focus of your company.  It explains why you're putting in the effort to build your own company rather than join a large corporate entity.  This section is critical for your company's public image, motivating your employees, and guiding decisions of senior management, as well as attracting strategic partners.

Your Values

In your mission statement, you should express your corporate values.  These values include both the character traits you demand of your employees, partners, customers, and vendors, as well as your professional values in how you run your business.

You should enumerate five to seven values or traits that embody all of your values.  A great example of a statement of values is the Seven Pillars of Islam.  It might be taboo to cite a religion in this context; however, realize that true practitioners of Islam (not those terrorist types) - spread across the globe - are all unified by their acceptance and observation of these Seven Pillars above all other rules and customs.  What that means is that while leadership is highly fragmented and distributed, a large body of people can accept the same basic principles of life and live together as such (again, I'm talking about the moderate Muslims, not the terrorists).

When you're drafting the statement of your values, think of your five to seven values, then write one to three sentences to describe each.  Of course you'll probably want to review and revise these, but I'll talk about that a bit later.

Your Value Proposition

The final section of your mission statement is the value proposition.  This section, like the others, should be short - just a few sentences or maybe a paragraph - and to the point.  It should be easily memorizable and explain how your altruistic mission is put into action to serve your customers. 

For example, Google's value statement would be "we are the leading provider of search technologies", in Microsoft's case it might be "we are the leading provider of productivity software and operating systems for computing devices".  This proposition is important to help you both convey to your customers and your employees what it is your company does.

Putting It Into Action

Show some of your drafts to all the people in the orbit of your company - your vendors, partners, and customers.  Ask them to comment and critique your draft.  This process will provide you with a lot of additional value, because it will help you connect with your customers more - they may see your value to them differently than how you see it - and get feedback from everyone with whom you work.  It may catch some flaws in your attitude and performance that you hadn't seen before and also show you things that you do well that you don't know about.  I guarantee you that this process, while it may be painful at times, will make your company stronger and improve your opportunity to succeed.

Posted by ash.dyer at 04:31 PM | Permalink | Comments (0) | TrackBacks (0)

Building a competent team is probably the biggest difficulty entrepreneurs face throughout the life of their startups.  Venture capitalists are always quick to explain that they focus first on the entrepreneur and his team and then on other aspects of the business, with very rare exception.

In fact, earlier this evening I attended the MIT $50k Entrepreneurship Competition - the world's foremost university business plan competition - at which Bob Davis as the keynote speaker.  Mr. Davis is currently a general partner in Highland Capital Partners, a Boston VC firm, and he was the CEO of Lycos from its inception in 1995 until a few months after it was acquired by Terra Networks to form TerraLycos.  Mr. Davis made the point that he and the other Highland Capital partners evaluate startups on three criteria:

1. Team
2. Market
3. Product

What does that tell you?  Well, simply put it means that one of the world's foremost entrepreneurs, and the people with which he works, believe that the primary key to success is to have the right team.  In fact, oftentimes team members will only be suitable for a certain phase or phases of the startup and must be swapped out.  Jo Tango, another general partner at Highland Capital, keeps a timeline depicting the phases for which he feels the CEOs of the companies in his portfolio are suited to run the startup company.  Most of the time the lifeline of the CEO is only for two or three phases.  That's not to say that they will not be able to see the company through later phases of its growth, just that they will have to grow along with the company.

So now that you know it's critical to have an A team, How do you field an A team?  This question is actually made up of a number of questions, the larger of which I will go into in this article.  This article will go through how to field a team, establish and maintain a culture, and attract strategic partners.

Tapping your Network

What does networking have to do with this?  Isn't that what you do to build connections, sell products, or get a job?  Well yes, that's definitely some of the uses of networking.  However, there's a lot more power that you can derive from having strong networking skills (check out Dr. Yaneer Bar-Yam and the New England Complexity Science Institute for some cool ideas about network structures).

How YOU Network

Notice the title of this section is not "How TO Network".  I'm not going to prescribe a certain way for you to network.  Everyone does it differently, some people are timid, some are gregarious, many are in between.  In all honesty, it doesn't matter that much aside from understanding certain basic dos and don'ts (to be discussed in a later article).

There's an old Sun Tzu quote from his famous book, The Art of War, it's simply "know thyself".  That's just a small excerpt from the quote but it's important.  In order to understand how to field your team, you need to understand how you meet people.  For example, I go to a lot of networking events and I absolutely love to meet people and talk about everything that each of us is doing.  However, I hate to be asked if I "already have a team" and would never think to ask that question of someone else.  That's just how I operate, and a lot of other people operate differently.

Diane Burton, an Assistant Professor at MIT's Sloan School of Management, who's work I will cite often in this article, likes to ask four questions.  She says, "use one minute for each question and write down up to five names".  The topics are:

1. Who do you do your work with? 
2. Who do you socialize with?
3. Who do you go to when you're grappling with a big decision?
4. Who do you go to for emotional support?

Use only a minute for each question then look at the names you've written down.  How many different names did you write down total?  Five? Twenty?

If you only have a few names written down, then you have a pretty limited network.  Chances are it's a cohesive network where everybody is in touch with everybody else.  If you have a lot of names then it's likely an expansive network where your contacts don't often know each other.  Most people have something in between.

Fielding the Team 

Which type of network do you think is best for building a team?

If you said expansive then you're right.  If you said cohesive, I bet you have a cohesive network.  The reason an expansive network is important in team building is that you want to be able to tap into the largest pool of expertise that you can.  If you can find someone in your expansive network with their own expansive network that knows someone who fits your team then they'll  bring a new and valuable perspective to your team that will improve your startup's chances for success.

There are lots of ways to recruit your teammates, and I won't go into them here, but I will suggest that you be honest with them from the get-go and make sure that they're excited to work with you.  You need to foster that excitement throughout to keep everybody working at it.

Pouring the Foundation

Once you have the team, you should lay a solid foundation to hold the team together.  That means creating a Code of Honor, a Founders Agreement, and, when you incorporate, and Operating Agreement. 

The Code of Honor is a set of basic rules that everyone on the team follows.  Rules such as "never abandon a teammate in need" and "never leave a disagreement unresolved".  Check out Blair Singer's book The ABC's of Building a Business Team that Wins for more info about creating a Code of Honor.  Another book worth checking out is Stephen Covey's The 7 Habits of Highly Effective People, which talks about building your character to improve your performance in team environments.

The Founders Agreement talks about the dynamics of the team - who will do what, who will contribute what goods and capital, and how many of the specifics of company ownership will be handled.  Joe Hadzima, Chairman of the MIT Enterprise Forum, wrote a great piece on the Founders Agreement, which can be found on the MIT Entrepreneurs Club website: http://web.mit.edu/e-club/hadzima/founders-memo.html.

The final document to create is the Operating Agreement.  This document is actually a document used a lot by lawyers in forming and structuring companies, so there are a lot of template documents to help you create your own Operating Agreement.  Just search on Google if you want to create your own, although it may be best to involve a lawyer to help you understand things.

Further Reading

Covey, Stephen.  The 7 Habits of Highly Effective People. 1989. New York: Free Press.

Fisher, Roger, William Ury, and Bruce Patton.  Getting to Yes: Negotiating Agreement without Giving In.  1991.  New York: Penguin Books.

Hadzima, Joseph.  "Considerations for Founders: Issues in Structuring Relationships Among Members of the Founder Team".  1994-2005.  http://web.mit.edu/e-club/hadzima/founders-memo.html. Last visited: 2/11/2006.

Singer, Blair.  The ABC's of Building a Business Team that Wins. 2004. New York: Warner Business Books.

Posted by ash.dyer at 12:09 AM | Permalink | Comments (0) | TrackBacks (0)

Have you ever wondered if we were bound for another dark age?  I have... pretty much everything moves in cycles, so wouldn't dark and enlightenned ages cycle, too?

Well, unfortunately I've found recently that things like the lack of tolerance of self expression is potentially one of the major indicators of an age that is changing for the worse.  The abuse of the Patriot Act and the stacking of the Supreme Court with justices that may overturn Roe v. Wade and other civil liberties is a start for Western religions. 

Check out this article: http://news.yahoo.com/s/nm/20060208/ts_nm/religion_cartoons_dc.  Riots because of somebody portraying another religion's sacred figures in a less-than-holy light is certainly a disturbing fact.  How about the even more disturbing response from Jaques Chirac, president of recently-rent-assunder France: in many more words, "for God's sake, please don't piss them off!"

Just think about it for a while, and also read Steven Levitt's Freakonomics, which might give you some more food for thought.  But at the end of this, I just have to ask, Does the reduction in tolerance of other people (in general, not just religious) indicate the beginning of a declining Age?

In the words of Mike Myers, "There are two kinds of people in the world that I hate: people who are intolerant of other people's cultures and the Dutch."

Posted by ash.dyer at 04:01 PM | Permalink | Comments (0) | TrackBacks (0)

For the past two weeks I have immersed myself in the entrepreneurial gatherings and seminars on MIT's campus.  In particular, I attended The Nuts and Bolts of Business Plans and Starting and Building Successful Tech Companies.  Both are great courses and very educational, comprised of a plethora of guest speakers covering entrepreneurship topics from finance to marketing to team building, and everything in between.  What follows is a multi-part series on the basics of entrepreneurship broken down by discipline.

Team

It's a common phrase - almost a cliche - in the venture capital industry that investors "would rather have a great team and a mediocre idea than a mediocre team and a great idea".  The team is the basic unit of the startup, and while people may come and go as the company develops, a competent, committed team is critical to the success of the venture.  There are a number of elements that contribute to the selection of team members, complementary skill sets, startup experience, industry experience, and common culture being but a few.

Team dynamics are one of the most common reasons startups fail.  When the going gets tough, it's critical that the founders rally the team to make it through the crisis.  Strife and dissention will occur in time of crisis, but by understanding the culture of the company, not sending mixed messages, and rallying around a common mission, good teams can pull through even the toughest of times.  Many managers report spending 90% of their time managing people issues and the rest managing everything else.  Even at MIT, known for its abundance of talented individuals, building lasting teams is a difficult endeavour.

Putting together a strong team with industry experience and a common culture is one of the greatest steps towards success that a founding entrepreneur can take.  Later in this series, I will dive into team building in greater depth and discuss many of the considerations one must make in selecting a team.

Mission

A successful startup venture has a well-defined mission statement that expresses the goal of the company and the team to the world.  This statement provides a rallying cry for the team, the company's champions and customers, and strategic partners.  For example, Google's mission statement is "to organize the world's information" and CASHFLOW Technologies', the producer of Rich Dad, Poor Dad, mission statement is to teach people to become financially independent.  These mission statements provide important guidance for the decisions of everyone involved in the company.

A mission can change over time, and often does, however the critical element is that everyone in the company, from the janitor to the CEO, knows what the mission of the company is.  For example, Bob Jones, in a recent guest lecture at MIT, said that every person in one of his past startup companies had made at least one sale - including the janitor and the receptionist.  He used customer interaction as a tool with which to bring everyone in the company closer in line with its mission statement.

Marketing

Marketing is an important part of any company's success.  A successful company must be able to generate steady, and hopefully steadily increasing, revenues, which requires developing a base of satisfied, returning customers, as well as continuing to win new customers in order to ensure the growth of the company.

A successful marketing campaign is an integrated blitz using a variety of media targeted at a specific customer to achieve a specific goal.  The message in the blitz is continued through ensuing marketing efforts to create a "drip" that reinforces the message and builds an association in customers' minds. 

Intimately knowing one's customer and achieving a specific goal are critical components to a successful marketing campaign.  An understanding of the customer and his needs comes from meeting and getting to know the customers in order to understand their "pain", or what keeps them awake at night.  The specific goal may be something like "our website will be the first place people turn to when they want to know about x" or "we will be the leading provider of office supplies to businesses with between 1 and 10 employees".

By understanding the importance of knowing one's customer and understanding the goal of the marketing campaign, one can construct a solid campaign that achieves its goal and generates returns in spades.

Sales

I have separated sales and marketing because, while related, the act of selling and the act of marketing are two different things.  Good marketing supports sales but the sale itself is still another beast.  One must intimately understand the customer before selecting the method of sales, such as direct sales, mail order, telephone, internet, or retail.  Each method suits a different type of customer, and often one might combine a few methods that work in synergy.  For example, many retailers also maintain an internet presence in order to capture sales from customers who prefer to shop from home.

Thomas Watson, founder of IBM, is famed for the phrase, "nothing happens until somebody sells something".  The phrase is simple but understanding the axiom is a must for entrepreneurs.  In its essence it serves as a reminder that the company serves customers and without the revenue generated from sales to those customers, the company cannot exist.

Cash Flow

Cash flow is the foundation of any business.  The flow of cash through a company - from its receipt as revenue to its spending as expense, investment, or dividend to shareholders - is the lifeblood of any company.  From day one of the enterprise it is important to keep diligent records of all transactions, collect revenues, pay creditors on time, and file tax returns.  Without competent accounting, the foundation of the company will fail and slowly but surely the financial stability of the business will erode.

Examples of companies that suffered from poor accounting include Enron and Worldcom - two of the biggest failures of corporate governance of the last twenty years.  These companies constituted a failure in the entire accounting system in place in the U.S., which includes an independent auditor that is supposed to check the company's books to ensure their accuracy.  These failures led to the creation of Sarbanes-Oxley, which, while only affecting companies that are public or intend to become public, is a major cost to those companies and a large impediment to their ability to competitively conduct business.

Business Systems

Business systems are the underlying systems that govern the functioning of the company and enable it to efficiently provide the goods and services it is supposed to provide.  These systems don't need to be complex - and probably shouldn't be - in order to function, but well thought out processes enable a company to beat its competition without having to cut margins.  Systems reduce the time, effort, and resources required to complete a task.  For example, Thomas Edison's mass-production approach to research and development enabled him to create the light bulb: by developing an efficient method for testing light bulb filaments, Edison was able to test over one thousand different filaments before finding one that burned long enough to be useful to consumers.

While Edison was not the first one to invent the light bulb, he was the first one to apply a system of research and development to the light bulb to improve it enough to make it ready for the consumer market.  In addition, Edison's company developed power systems which enabled him to provide the support structure for his product, something that none of his competitors could offer.  The result of Edison's genius is General Electric, one of the largest companies in the world.

Product

The product is, of course, an important part of the company.  Without a functional product that fulfills the company's value proposition, there won't be anything to sell.  However, that said, perfect is the enemy of good and one must balance the importance of developing a revenue stream with the need to work out the bugs in a product.  For example, the Blue Screen of Death used to be a very common occurence on early Microsoft Windows products, but by the release of Windows XP, these screens have become few and far between.

The early versions of Windows still fulfilled the value proposition of improved productivity.  However, over time Microsoft was able to improve the functionality of the software to reduce the amount it crashes.  In fact, Windows is a great example of the trade-offs between a revenue stream and a perfect product (even now it's not perfect).

Legal

The legal aspects to a company are very important, and are also overlooked.  There are two main categories of law that are most important for an entrepreneur to observe in the early stages of a startup: corporate formalities and intellectual property.

Corporate formalities are things like holding and documenting an annual shareholders meeting, signing contracts using your official company title, and filing annual documents with the federal and state governments that enable the entrepreneur to remain protected from the liabilities of the startup company.  These liabilities include legislative liabilities, such as prosecution for a broken bone due to a fall down a flight of stairs in the company's offices, and debt liabilities, such as loans and credit card bills.  Observing these formalities enables the legal creation of a "corporate veil" that protects the owners and managers from a lot of the risks of running a company.

Intellectual property (IP) drives the competitive advantage of the company.  Whether its the secret recipe for the Chef's Specialty, or it's the patent to a new, world-changing device, intellectual property enables its owners and creators to retain an advantage against their competition by encouraging the creation of new technologies and practices.  IP is especially important to entrepreneurs because they need the leverage granted by IP in order to compete with large companies that have a lot of money to throw into creating competing products.

Financing

There are startup costs for a new company that must be financed before it can take in any revenue.  These costs include things like incorporation fees, stationery, office space, and other costs that you need to set up the business.  This financing can come from a number of places, but usually is derived from the founders, perhaps their friends and family, and bank loans.  Additional funds must often be raised before the company can take in revenue or make a profit and these needs are usually funded through venture capital or bank loans.

There are a number of ways to finance a company and they can be very complex due to multiple strategies and multiple stages of funding.  For example, many tech companies get multiple rounds of venture capital funding based on meeting development milestones.  The exchange is that the amount of the company owned by the founders successively diminishes as the funding rounds progress.  It is important for an entrepreneur to understand various methods of funding in order to choose which one is right for his company.

Suggested Reading

Kiyosaki, Robert and Lechter, Susan.  Rich Dad, Poor Dad.  1998. New York: Warner Books.  

Stevens, Mark. Your Marketing Sucks. 2005. New York: Three Rivers Press.

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