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Why Your Company Needs a Mantra

Does your company have a mantra? If not, stop what you are doing and develop one. Like, right now. It’s that important.

What the heck is a mantra? Good question. It’s the core purpose for why your business exists. If you’ve ever seen Simon Sinek’s TED talk, ‘it starts with why’, your mantra is the why.

To catch you up to speed, here’s a quick, (somewhat-bastardized) synopsis of Sinek’s TED talk:

Every business has a what and a why. The what explains what your business does (e.g. sells widgets). The why explains why your company does this (e.g. to create world peace)

Let’s use Acme Electric Wheelchair company as a hypothetical.

What Acme does: sell electric wheelchairs to non-mobile elderly folks.

Why Acme does it: to provide freedom and empowerment through mobility.

Alternatively, here is a real world example. At GiveForward we give people online fundraising pages to raise money for their loved ones’ medical expenses. This is what we do. But our mantra is create unexpected joy. Creating a little bit of unexpected happiness for families during an otherwise dark period in their lives is why we get up and go to work every morning. It’s what makes work fun. It’s the core purpose that is driving us.

Now that we have a basic understanding of a what a mantra is, I suppose the next logical question is why is it important to have a mantra?

Having a mantra is important for many reasons but one of the more practical benefits is that it acts as a filter for business decisions. Once you understand the purpose for which your business exists, it makes it a lot easier to understand which path to take when faced with tough decisions. Once you have a mantra in place you simply ask: is this upcoming opportunity in line with our mantra? If the answer is yes, feel free to proceed. If the answer is no, pass on the opportunity.

For example, here’s a recent scenario where we relied on our mantra to guide our business decision.

At GiveForward, we used to have an email that automatically went out two weeks after someone donated. It would thank them for their donation and then would explicitly ask the reader to refer others to GiveForward. In exchange, we promised to give them a t-shirt if they did this. This email got marked as SPAM all the time and no one ever referred people our way.

One day, a donor named Alan wrote to us and told us how much we sucked and how spammy our email was. And he was right. We did suck. This email was SPAMMY and it wasn’t creating unexpected joy for anyone. So we changed it to fall in line with our mantra. Instead of asking people to spread the word in exchange for a cheap, cotton t-shirt, we changed the email so that it said:

“Thank you for the donation you made a few weeks ago to [Joe's] fundraiser. We hope that your act of generosity filled you with lots of warm-fuzzies. And just in case you are in need of some extra warm fuzzy goodness today, here is the cutest video EVER

After we made the change, I sent our friend Alan a courtesy email to let him know he was right and we were wrong. [here's my actual email]

Dear Alan,

A couple of week ago you let us know how sucky our update email was. And you were absolutely correct. It was spammy and it wasn’t what GiveForward is all about. We’ve since changed it. Thanks again for helping us see the light :-)

Sincerely,

Ethan

Now here’s the best part. Since we changed the email, not only have we stopped getting marked as SPAM, but we’ve actually started getting fan mail from people telling us how much they love the kitten video (duh…everyone loves kittens).

The lesson here is that when you base your business decisions on a core set of values, it resonates with your fans. And if you’re trying to build a brand that is going to last for decades or even centuries, the reality is that your fans are never buying what you do. They’re buying why you do it – they are buying an idea, not a product. On the other hand, when you stray from your values and make decisions based on short term objectives, you end up alienating fans and getting marked as SPAM.

At the end of the day, Mantra > SPAM. Be the mantra. Don’t be the SPAM.

For further reading on these topics, check out Start with Why by Simon Sinek and Art of the Start by Guy Kawasaki.

 

Filed under: Company Blog Post,Status Updates — Tags: — May 25, 2012

Power2Pivot – The story behind Power2Switch

A pivot is a change in strategy, without a change in vision

-  Eric Ries, author or “The Lean Start Up”

What was the initial insight behind the Power2switch idea?

The insight behind Power2Switch was that consumers lacked a mechanism for comparing electricity deals. We wanted to be the “Expedia for electricity” – providing consumers price transparency across providers.

What changed, when and why? What was it that your customers told you or your team discovered that promoted the pivot?

Shortly after entering the Excelerate program, we realized that we couldn’t acquire customers quickly or cheaply enough. We had to rethink our approach to customer acquisition. One of our mentors actually suggested that we work through local property managers and it was this insight that prompted a pivot to a channel strategy. The upside to this approach was that we were able to reach a lot more customers, the downside was we had to share some revenue in the process. Once we expanded our focus beyond residential to include small businesses, we chose the chamber of commerce as our channel partner.

How did you adapt the business plan?

We didn’t have to adapt our business plan in terms of how we made money. However, going forward we do see Power2Switch’s mission evolving. We believe that there’s a lot more scope for empowering and educating consumers around smart energy choices, both insider and outside the home.

What did you ultimately learn about pursuing path B over path A?

I think iterating on our business plan taught us the importance of focus. We quickly realized that you don’t have unlimited time and energy when building a new business. You aren’t all so smart and so talented that you can afford to pursue all paths simultaneously. You really have to pick one or two things to go after and focus on that. If your assumptions prove wrong, you can then pivot to the next phase armed with knowledge from your past missteps.

Could you have done anything else initially to have foreseen the need for this change?

Our decision to focus on partnerships was really an organic outcome of our market research so we probably couldn’t have pre-empted that learning. We tested a marketing approach that ended up confirming a previous intuition of what we thought might work but at the time lacked sufficient evidence to confirm. When you’re resource constrained you oftentimes don’t have an overwhelming reason to pursue something until it becomes blindingly obvious.

What advice would you offer other entrepreneurs facing the need to pivot?

The need to pivot probably emanated from a need to focus so I would say that having a targeted customer acquisition strategy is very important. We initially started out by targeting everyone before realizing the value in building clear partnerships. I’d encourage other entrepreneurs who find themselves at a similar crossroads to identify what they see as the biggest unmet need or challenge in their target market and to go after that.

Secondly, I think you have to look at your team’s strengths and see how those measure up against the market opportunity. For us at Power2Switch, we knew we could deliver on what we were really good at – technology, fast iteration, and partnership development. Those insights can help you qualify your thinking as you reposition your business.

What do you think has enabled you to be successful in making the transition? Anything you would have done differently? More quickly?

The experience at Excelerate was incredibly valuable and probably allowed us to pivot faster when the need arose. Relationships definitely win the day and the mentors provide incredible leverage on that front. We were probably able to avoid some costly mistakes because of the guidance they provided.

Finally, I would caution against “analysis paralysis”! At the beginning, we spent a lot of time planning, modeling and thinking through all possible scenarios. Oftentimes you have to take the plunge and “just do it”. With start-ups there are no certainties, it’s all about daily execution and experimenting until you find something that works.

 

Filed under: Company Blog Post,Status Updates — Tags: — May 12, 2012

Supporting Random Acts of Kindness

 

Our entrepreneurs give amazing speeches every year at our Demo Day. But one of the most incredible is still GiveForward’s from 2010. They were introduced by a young woman who explained:

“GiveForward saved my life.”

As GiveForward grows, they are continuing to make an enormous impact on people’s lives by making it easier for friends and families to send love and financial support to patients during a medical crisis. The latest is a commitment by venture capitalist Brad Feld for Random Acts of Kindness, where he’ll use GiveForward to make generous gifts to patients in need, like Justin Salcedo. You can read more about it on Brad’s blog.

Filed under: Company Blog Post,Status Updates — Tags: — May 10, 2012

Feeling like a proud father

This week GiveForward won the gold in the Edison Awards for social impact.  For those of you not already familiar with the Edison Awards, here is how they are described:

“The Edison Awards have been recognized as America’s innovation awards that take the time-tested characteristics of innovation from earlier visionaries and write a new chapter in American innovation history.”

Write a new chapter in America innovation history” – That is exactly what GiveForward is doing.  They are proving that you can run a profitable business while having significant social impact.  GiveForward empowers friends and family to send love and financial support to patients as they navigate a medical crisis. Desiree and Ethan have been more committed and more passionate about their mission than just about any other entrepreneur I have ever met, and it shows in their results and in the number of people they have helped.  It has been amazing journey to watch, and it has only just begun!

Filed under: Company Blog Post,Status Updates — Tags: — April 28, 2012

How BabbaCo redefined itself – an interview with Jessica Kim

What was the initial insight behind the BabbaCo idea? 

The idea for BabbaCo came about at a pivotal moment in my life – I had left brand management at Kraft and was on maternity leave. So much changes when you become a parent. The huge shift in my own life made me realize that there was this great opportunity serving others adjusting to life with children. I wanted to make fun, educational products for parents to use with their kids.

BabbaCo was also my second entrepreneurial venture. At 19, I started a successful baking business out of my college dorm room at Brown called “Jessica’s Wonders”. It was an amazing experience and taught me that I could be an entrepreneur.

What changed, when and why? What was it that your customers told you or your team discovered that prompted the pivot?

BabbaCo began with me literally experimenting with products in my kitchen. By the time I applied to Excelerate, a few years later, I had built a successful business with a product that worked, and which customers liked, but I knew that something was missing. I ended up having a conversation with one of the mentors on my second day at Excelerate, which shifted my whole perspective. I realized that by altering distribution and going direct to consumers via a subscription- based model, I was able to really drive customer engagement with our product. I had been missing out on how to truly leverage the strength of BabbaCo brand’s. By shifting the business model I could own the dialogue with my customers and engage with them on a deeper level than I had previously.

How did you adapt the business plan? 

Our whole distribution model changed. We had previously sold through physical retailers and Amazon and now we had to become an e-commerce company. With that same mentor’s encouragement, we revamped everything over the next few months – our site, the back end of the business– to become an e-commerce company instead of a traditional manufacturing business.

What did you ultimately learn about pursuing path B over path A?

I think the biggest lesson was discovering the importance of matching your business’ structure to its end goal. For BabbaCo, it was much more about what went into a box, it was about how we built relationships with our customers. Once we had that insight the company grew exponentially faster in the next five months than it had in the preceding few years. A pivot isn’t about changing the entire purpose of your company. It’s about working effectively and matching the best business model to your company’s vision.

Could you have done anything else initially to have foreseen the need for this change? 

Without Excelerate I probably wouldn’t have thought about changing the business model. I had pre-conceived ideas about subscription-based businesses that turned out to be overly simplistic. The pivot gave us a lot more information with which to run the business. Whereas previously we had struggled with inventory management and customer demand, now we could really see what was working and what was not.

What advice would you offer other entrepreneurs facing the need to pivot?

Firstly, you really need to know your business inside and out – what’s working, what needs to change – really break it down into its component parts. You have to be honest with yourself about where the business stands today before deciding to change it. Secondly, you need to be very scientific in understanding how a pivot will impact the entirety of your business – inventory, cash flow, operations, brand message etc. You have to keep that holistic picture in mind while at the same time retaining the vision for where you want it to go as an entrepreneur.

What do you think has enabled you to be successful in making the transition? is there anything you would have done differently? More quickly?

Speed was certainly important. We tested our assumptions and moved as quickly as we could! I also learned the importance of hiring the right team. You want people with the gusto and determination to make things happen. They have to be comfortable with a bit of uncertainty and yet ultimately share in and support your vision.

 

 

Filed under: About the Companies,Company Blog Post,Status Updates — Tags: — April 9, 2012