Internet of Things, Business Edition

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It’s no secret that the Internet of Things has arrived. With the ability to monitor and then fine-tune commercial jet engines an airline can save money on fuel and maintenance, as the author of “Here Comes the Industrial Internet” and editor at VentureBeat, Dylan Tweney, points out.

Think for a moment about the sheer volume of collected data.

GE estimates there will be 50 billion devices attached to the Internet by 2020.

These devices will mostly be invisible. They won’t inspire page after page of glowing commentary from Internet pundits in high-profile tech news sites. But they will make an enormous difference to the way industry works in the modern world.

So who will help industry make sense of the exabytes of industrial data?  That sounds like a business opportunity.

Image: “Hilbert InfoGrowth” by MyworkforwikiOwn work. Licensed under CC BY-SA 3.0 via Wikimedia Commons.

Practice your interview skills in Richmond!

Come check out the Job Club on July 14th at 9:30AM in the Madison County Public Library, Richmond!

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Value Proposition: Discovering Opportunity in The Gulf

By Rick Johnson @mkitky 

One company I worked with had HVAC experience for grey water ships and dive experience in blue water (as an ex Navy Seal). They combined these two areas of expertise to create dive systems for use in blue water in the oil and gas exploration markets. These exploration companies had lots of money but did not know how to effectively service the well heads at the bottom of the sea floor in the Gulf of Mexico. This startup helped them solve their dive problems by coupling their knowledge of diving at extreme depths with their HAVC design to create custom hyperbaric dive chambers. The tag line we developed that best described their value proposition was added to this photo that a remote controlled submarine took of their product 350’ below the surface. “Where your problems meet our solutions” with this picture described just exactly where they helped.

 

How to grow sales with limited resources

Everyone in your company needs to understand that they are all involved in sales. Never lose this customer centric focus.

The key to growing sales with limited resources is to focus. This is actually a problem with most all companies. It is an acute problem with small companies.

To see if you are focused, I would ask you a simple question: what is it that you do that I would be interested in?

In about 15 seconds you need to articulate what it is you do that is unique and why I should be interested.

To do this you need to know two things, your customer and your product.

The starting point is your customer. What specific problem do they have? If you do not know this, you cannot sell. Tell the customer you understand their problem by being able to articulate it.

 The second half of the successful pitch is explaining how your product is a better solution than any alternative they have. Tell them how they can solve their problem with your technology. You are now becoming a part of their business success. It is not about you, it is about them.

The second element you need to be successful in growing sales with limited resources is continuous communication. Everyone needs to help everyone else all the time. Everything should be communicated. These communications should be concise and should be strategic, not tactical in nature.

Communicate customer problems and customer solutions by customer segment. The more you talk about this among the group, the more focused the response will be. Always be trying to divide customer segments to get more specific responses and always be looking to add customer segments.  As I said above, the discussions should be strategic. The more you do this, the better you will get at it. Then, prepare marketing literature, website changes, concepts for white papers, etc.

Once you start down the path of knowing your customer and knowing your product, cost reduce your product. Sales increase as price goes down. Decreasing price is dependent on decreasing costs.

In summary, to increase sales with limited resources, focus on specific customer segments with targeted pitches that show you understand their problem and can help them solve it while you are always cost reducing your product. Visit KY Innovation for more information or to connect with a startup professional. Tweet KY Innovation here

Majority of U.S. Employees “Eager to be Entrepreneurial”

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This recent survey of employees in the United States shows that a majority are “eager to be entrepreneurial.” So why aren’t more innovative products and services emerging from those companies?

That’s a good question. What do you think?

If you’re one of those employees who believes you have what it takes to be an entrepreneur, talk to the Kentucky Innovation Network about starting your business. You’ll find plenty of business expertise, a willing ear and someone who is on your side.

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Secrets of a Turnaround Specialist Retaining Minimum Wage Employees

You want the division to make more money. But, sales are declining, profits have disappeared, morale is low and turnover is the only thing going up.

 I recently worked with a client who had a facility that was only partially utilized. The company had a contract to produce product for the Federal Government and was only producing about 2/3 of the amount due to internal issues. The problem was identified by the client as being the unavailability of a willing and capable local workforce. Outside of a core group of very capable and reliable employees, the company has been unable to hire and retain enough employees to produce the required product that management would like to manufacture at this location. It had been concluded that the local population would rather live off welfare or even do nothing than work. Efforts to recruit and train employees had failed. After a short period of time these employees stop showing up to work. These efforts cost the company both time and money.

 I met with the Plant Manager to understand why the division was having problems attracting and retaining employees. I also evaluated their overall operation to determine if there were any opportunities for increasing productivity.

 It turned out that the owners were the problem. By treating new hires as lazy, stupid and most likely on drugs and then treating them with no respect they created a hostile environment that no one wanted to be in. The employees who had been there for some time stayed as they had nowhere else to go to earn the same compensation with their skills, but the new hires would leave as soon as they could.

 With much hesitation I convinced the Plant Manager to start treating all people including new hires with respect. We profiled the typical hire and then asked the staff what they would want in addition to salary at a place of employment.  Once we got started implementing these changes, things like group lunches, seating people in clusters so they could chat, improving the kitchen and lunchroom, the rumors slowly changed to excited whispers as the changes started becoming recognized as the norm. What kind of changes? In every case, the changes came from within the organization from the people already there.

 If you have an underperforming organization, contact us at the Kentucky Innovation Network at our website and follow us on Twittere

Making a Compelling Business Case for Funding Opportunities

The Kentucky Innovation Network works with many clients helping them get “investment ready”. The example of feedback to a client below is typical. If you see yourself in this discussion, contact us to see if we can help.

While many companies have a detailed plan, the targeted audience will want you to simply state the business you are in, who your target customers are, and what products are intended for each of these customers. In each of these market areas you will need to outline the positive and negative attributes of your products and why you will be able to get customers to convert to your solutions.

For example, you might say “the rapidly growing market relies on materials presently costing $20/kg. Our technology reduces that cost to less than $5/kg while increasing the energy density by 50% resulting in an 8x decrease in cost. Currently, the market is buying $3 billion worth of these materials and the share of this market that we can immediately target is $500 million.”

“The materials we will target include X, Y and Z. We will also license our technology and consult on the design of large scale manufacturing equipment.

“To understand this application, I have included a brief sketch of the components that go into several types of specialized end products for the automotive and large scale energy storage (smart grid) applications.“

I might next discuss the team and your IP before you go further into the market. I would discuss the market and the competition and why you will be able to penetrate these markets. I would also briefly discuss your revenue model (gross margin %, licensing strategy, consulting strategy). Stay away from claims that you cannot support.

People are going to want to know just what kind of business this is. Is it a technology licensing business, a raw material supplier, an equipment supplier, or a consulting business performing R&D? A combination of all of these will scare investors off.

Find your nearest Kentucky Innovation Network office at our websiteand follow us on Twitter.

Tyler Cowen interviews Peter Thiel on the Future of Innovation

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Building a Sales Force – Should I use a Rep Firm or Hire Direct?

For a startup only paying for services when you get paid by the customer is very alluring. A well-chosen Sales Rep firm can provide valuable access to market decision makers and the credibility they give you can be priceless. But in most states an agreement with a Rep Firm is a commitment that has to be honored and is not easily broken. The “deal” you negotiated when you were just starting can look like a cash cow for the Rep firm years later. The alternative, hiring a direct sales force, takes time, money, and industry contacts have to be created from the ground up. But, once operating, a direct sales force will do what the company wants even if that changes over time. And, the client contacts are the property of the company.

It is not easy hiring the right Rep firm. The best ones in your industry may not be interested in working with a small, relatively unknown startup. Rep firms looking to expand into new markets may not have the contacts you would like or need. And, all Rep firms have additional suppliers on their line-card so they never work 100% for you.

Some companies are not good at exciting potential Rep companies and selling the advantages of working with a startup. And, some companies are not good at understanding how to create a direct sales force and how to hire the right people.

An example of a client company who is building a direct sales force is Beyond Zero in Louisville, KY. This startup knows their market and their customer base. They are ramping up their direct sales force and teaching each new hire what it is that is unique with their product and how they are changing the market. The Kentucky Innovation Network worked with them to find a manufacturing partner and to work with them raising capital.

An example of a client company who is dealing with Rep partners is Auto Chem of Kentucky, a supplier of specialty chemicals and systems used in industrial cleaning of paint. This very specialized market requires someone already on the inside to penetrate the market. The Kentucky Innovation Network has worked with this company in a number of areas including strategy development and workforce development as well as introductions to local service suppliers.

At the Kentucky Innovation Network we have found that the smartest choice is a function of many factors and that it is best to sit down one on one with a company and get to really know them before making any recommendation.  Contact us at our website or on Twitter to see if we can help you.

Small Businesses: Stop Ignoring the Whale in the Room

I had a client with the following issues:

  1. A lawsuit that could bankrupt them,
  2. Employees stealing from the company,
  3. Severe cash flow issues.

 Their strategy seemed to be to:

  1. Create new corporate entities, transfer assets and let the existing legal entity go bankrupt,
  2. Ignore the personnel issues,
  3. Keep working for free for a client who was not paying them,
  4. Dream up new ventures,
  5. Ask for money.

After many discussions we convinced them to:

  1. Stop working on the program in dispute; instead work to resolve the issue.
  2. Stop the legal shenanigans.
  3. Focus on the markets where they could sell their expertise.
  4. If it makes sense to bring in an outside investor to help finance one specific new initiative, do it. Otherwise, forget it.
  5. Manage their cash.
  6. Change their culture.

Address the big issues first. Don’t be afraid to wait to ask for help like this company did. Visit our website to learn more. Follow us on Twitter.