Business Success and Partnerships

I was meeting with a friend the other morning about a new business idea. His idea was awesome and could really change some of the cooperation and communication in his industry. He was having doubts about his idea though because many of his peers kept saying, "Oh that will never work because people won't risk losing profits by working with you."

For clarification I've left my friend's name and the industry out of the post because he hasn't yet got the company off the ground. But he's got a doozy of an idea!

We had a great conversation on how to overcome this problem which made me think about the concepts of launching a new company where partnerships are a must (which is just about any company). Currently my biggest client is because of a reference from a company that offers the same consulting services, but without a portion of very specific expertise that I have. The company is probably losing $30,000 to $50,000 in revenue by referencing me. However, if I can help turn things around then their upside revenue will exceed $2,000,000 with the client. If I can't turn things around the risk is $50,000, but their annual revenues are beyond $800 million so no big risk for them.

The point here is that if you can create an upside with little or no risk for your partner then you really create a win-win scenario. My example is maybe not great because their is no risk for me, but that is beside the point. Here are a few things to think about when creating a partnership that you need.1. What is your motivation in creating the partnership? This is an important question because your motivation MUST be something other than you make money. Is there a bigger benefit that helps you, your partner, and your joint customer. A partner will see right through you if a big motivation is not to help them make money. Guy Kawasaki says a key element of any new business must be "to make meaning", and that is this point. The partnership must help make meaning for all involved.

2. Evaluate the value of each partnership and ensure the returns are balanced for you and the partner. If the upside value is almost all yours, then almost all returns may need to be your partners. If the upside is all your partners, then almost all the returns may need to be yours. Don't not do a partnership because there is little direct profits. There may be indirect profits (see #5)

3. My dad always taught me "Pigs get fat and hogs get slaughtered". It is easy to get caught up in squeezing the partnership for all it's worth. Fight that urge and take what you should versus what you can.

4. Figure out a way to make the partnership low risk. For example, if you want to sell another persons product they will probably not risk losing revenue to your gain. In this situation figure out a minimum sales number before you take profits. This way your potential partner only gives away a portion of the profit when they sell enough to accept it. You can also build in levels of profit sharing here where the more you sell the more profit you get.

5. Recognize that recognized names can bring customers. If you are the little dog in a partnership the big dog may get you leads because they are the big dog. In follow up to point #2 it may be beneficial to just have the partnership and take little (or even no) profit. Rather negotiate an endorsement of some kind. Free press from an influential person and/or company can bring bigger revenues and encourage other partners to join. Creditability for any new business is huge. Acceptance and endorsement from credible sources is priceless.

My final note is don't quit because people don't like your idea. Talk about it with people. You'll be amazed how the idea changes through each conversation. You will turn it into a great idea or realize it probably won't work and scrap it for a better idea.

Extreme Marketing

Marketing is hard. Really. Once you are uber successful I'm guessing it gets much easier, but before that point it's hard. When you don't have a huge customer base all blabbering on about how brilliant you are the only option is to self blabber about brilliance. I've spent the last two work days self marketing. Whether cold calling, emailing, requesting references via LinkedIn, or getting my new hospitality technology blog (to be announced soon) together. This is all pretty much standard new business stuff though and comes with the territory. It's one of those things though before you start you think, "I've got a huge network, I'll get business." (at least that is what I thought). The reality is that it is a long ramp and you have to claw for every opportunity. Nobody starts at the top. People may indirectly reference you but most likely they are not looking for business for you.

I am a true believer that word of mouth marketing is king (especially in my business). But, if you can't tell one great story about yourself no one else will be able to either. To get one big deal someone has to believe that you can be successful with that big deal. And if you have no references for your greatness then you must become your own self reference.
This post was prompted by an absolutely outlandish extreme marketing example I saw in the Starbucks parking lot today. Check out this guys car. He caught me taking pictures of it which was pretty funny. He acted like it was a totally normal occurrence, which was more funny.

Just Be Honest

Lately I've been reflecting on why I've been successful in my career so far. I think it's important to look back and review successes and failures when planning for how to be successful in the future. I also think that it's hard to be realistic with yourself because you may want it to be for reasons that it wasn't or isn't (like you are really smart instead of just really lucky).

After sending the message to my friends and family announcing that I was going out on my own I got some of the most encouraging responses. Every response was encouraging, even if it was advice on my logo or business name. But what struck me were the comments on why people said they knew I would be successful. The thing that stuck out the most was that they said I was honest.

Over my career of 9 (short) years I've made it a point to be honest with customers and co-workers, always. That means when I've screwed up or when it is really bad news for a customer, so be it. Bad news is often hard to deliver and hard to hear, but in my experience every customer was appreciative of the honesty. Sometimes it meant I lost a customer or had a really unhappy customer, but it also meant that person new I would be honest with them the next time. In a world where lies are abundant and facades seem to be the norm honesty is refreshing. And like any refreshing drink you want more of it.

A prospective client that decides on a separate contractor because you are honest about not being able to meet a requirement will come back again for a bid the next time...because you were honest.

Just be honest. Even if you lose a customer, you won't lose your integrity...and nothing is worse to lose.

Don't Go It Alone

Over the past few years I’ve watched colleagues take the plunge to become consultants, and I’m always surprised how many of them want to go it alone. Two of the biggest challenges when starting a new business (specifically consulting) are...

• All your success stories have an asterisk that you did it under the company you used to work for.


• You don’t have the best kind of marketing, which is a direct reference from a personal contact that has experienced your company.

In Tim Sanders’ book Love Is the Killer App he says, “Your network is your networth.” Your ability to generate revenue is directly correlated to the amount of people that are willing to recommend you, assuming they even know what you do. Using your network to create business is something that too few people do. My dad (a long time entrepenuer) always told me, “It’s not what you know, it’s who you know.”

I’ve spent almost every evening of the past week sending out introduction letters to prospective clients, and I’m pretty confident that some business will be generated from that work. But I know that a direct reference from a personal contact will generate more opportunities than I ever can. I say personal versus professional because a professional reference is from someone that doesn’t know you. They know what you do and so they reference you, but they don’t encourage someone to hire you. Personal references enjoy referencing you and passionately encourage someone to hire you.

I sent out the first ping to my personal network-of-success. I’ll keep you updated on what generates more business: the letter to my network or introduction letters to prospective clients. I'm betting on my network.
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Letter to my personal network of success.

Yogi Berra once said, “If you come to a fork in the road, take it.”

It seems almost a dozen times in the past three years my professional life has been at a fork in the road and each time I’ve taken the “safe road”. Three weeks ago I reached another fork in the road.

Just over a month ago InfoGenesis was purchased by Agilysys Inc., the largest hospitality technology company in the world. As many of you know, about four months ago I accepted the role of Director of Professional Services for InfoGenesis, helping recover a department that had gotten somewhat off course. Three weeks ago the new company ownership asked me to move to Las Vegas to manage the professional services group, as that is the new primary services office. Chrystal and I love Santa Barbara and are not yet ready to leave, so I declined the offer. Upon declining the request to relocate the joint decision was made that they would be hiring someone for my position in Las Vegas. Though this sounds like an unfortunate incident I am viewing it as an opportunity.

The new ownership had expressed the sincere desire to keep me on board at the company, and requested I think about what job I would like. It was wonderful to have the blessing of being able to choose what job I really wanted, and even create one if I could justify the value. After much reflection, discussions with Chrystal, wise counsel from my dad and prayer I have made the decision that this time the job I really want is Owner and Principal Consultant for Kevin Sturm Consulting.

At what will be one month short of nine years, my last day with InfoGenesis will be Friday, October 5. I have spent many evenings over the past few weeks working on starting Kevin Sturm Consulting, and will spend many more in the coming weeks. Most of that time has been spent networking with contacts and getting a foundation to start a client base. At this point I would say I have the ground work in place, but I still need to finish my website and a few administrative tasks associated with starting a business. The next step is to land a customer and my first of what I hope will be many consulting jobs.

My biggest challenge in this role will be establishing my own reputation in the industry. For nine years I have been backed by a big well established company. As a private consultant I now have to make a name for myself, but the recommendation from a trusted contact will always be a vital part of my business. All of you know me personally, professionally or both and I hope can be part of my extended network-of-success. I will be providing a few different services, but will specialize in system evaluation and selection for hospitality venues and use case and requirements gathering for hospitality vendors. If you know of any hotels, restaurants, resorts, golf courses, stadiums, corporate cafeterias, or any hospitality related venue that is opening or planning on replacing their technology system(s) and feel confident in referencing my services please do.

As I embark on this new journey I covet your prayers, words of wisdom, criticism and help. Thank you all for your friendship and support. I am hoping that this will be first installment of a regular newsletter, and that with each new installment I will have stories of success and learning experiences to report. If you’re a blog reader you can catch regular updates of how things are going on my blog.

Cheers!

Kevin

New Banner!

We'll, like I said Jeremy Wold was able to do a quicky fix for me to get my banner updated. It's not perfect but he got it to work better than me.

Support Your Network-of-Success

The excitement and anticipation of starting my own company has completely overtaken my thoughts since quitting my job 3 days ago. I gave a 60 day notice to help transition everything, so I won't officially be on my own till October 6th. But all I can think about is planning I need to do and getting my website up. I'm having a tough time not spending bunches of money on a really great website and marketing material, but know that I'll get way more customers through word of mouth marketing than my website. A do want a really solid website still.

On Friday I ordered my new business cards, so they should be here this week. I'm so excited! I am super stoked on the design that Wold Creative Group did. Jeremy Wold is a long time friend and recently started his own marketing and design company, so supporting another entrepreneur feels good, too. I already consider Jeremy part of my network-of-success because I know he helped me create a logo that people will remember. I really like Jeremy's style because he believes in simplicity and pure elements of design. If you need design or marketing assistance, you should check out his website and shoot him an email.

The picture below is what Wold Creative Design put together for me. Below that is what I sent him as an idea...and now the world understands why I desperately needed his help.

Front of card by Wold Creative Group

Back of card by Wold Creative Group









Front of Card that I designed...it's not horrible, but it ain't no Wold creation!








Back of card that I designed. I did come up with the shortened version of "hospitality technology made simple"...which I felt pretty good about.

Get Networked!

"Your network is your net worth."

This is a quote from Tim Sanders book Love is the Killer App, and it's been something on the for front of my mind. I've been working on actively building my network recently, and it takes work. When you see it in a book, and talk to people about it, it seems easy. But what I'm realizing as I go through this process is Tim means more than just getting connected with all the people you know. I've been working on building my network with people I trust, share passions with, and feel that I can help me and that I can help. And that's the escense of the hard part, because the second really has to come before the first.

When adding people into my network, the best way to have them become a part of my network is by first giving of myself in some way...and that takes work. I'm already busy with work, with family, with fixing up the house, and living life in general...so it's hard. But I'm also finding that it's worth it, because it really does generate a return. Recently the people in my network have been sharing new ideas with me, and giving back.

One of the recent examples of this was feedback that was posted on my LinkedIn profile (I was working on my profile this week because of entry on Guy Kawasaki's blog about giving your LinkedIn profile an extremem makover). As I was making over my profile, I asked two people that I respect to leave feedback on me. Not only did they leave feedback within the same day, but the feedback was more than I could have ever expected. Here are both of them:

“Kevin was a senior Systems Engineer and was designated project manager for a major system installation at one of the country's largest indoor arenas. The project was technically complex, and the customer was challenging -- in part because it was really two customers, both a hockey team and an NBA team. Kevin managed a large team that numbered 20 or more at its peak and completed the project on time and within budget. He dealt with all of the extraordinary customer challenges as well as with what was then the largest ASP installation of point of sale in the world. Kevin's success led to his subsequent appointment as Field Services Manager, responsible for a team of nearly 50 people who installed the company's systems throughout the U.S. and the world. In this role he had four to six direct reports whom he had to lead, challenge and mentor. He quickly earned the respect of all who worked for him as well as a large customer base. Kevin is an intelligent, dedicated manager with an extraordinarly strong sense of responsibility. He gets the job done and wins the respect of customers and co-workers in the process. He is a man of exceptional character, and that character quickly becomes apparent to all who work with him.” February 27, 2007
Karl Willig, President & CEO, InfoGenesismanaged Kevin indirectly at InfoGenesis

“Kevin is a true subject matter expert in point-of-sale as it relates to the hospitality and food service systems management market. I have nothing but positive reviews to give in all aspects of our business relationship with Kevin, and would retain his services again at any time, without hesitation. Kevin consistently gets things done, and works well with our customers and clients. He has the experience and knowledge to overcome almost every obstacle that we encountered with client sites and difficult customers. I have never known Kevin to mislead either his customers or clients, nor his employer. He is honest and truthful to a fault, which is rare in today's business climate, and his ethics are beyond reproach.” February 27, 2007
Top qualities: Great Results, Personable, Expert
Ken Davishired Kevin as a Business Consultant in 2004, and hired Kevin more than once

Karl and Ken are two people I respect highly, and value their opinion and insight. So these were both recommendations that I am really grateful for.

Yo, Get Networked!