A business built around a great idea will quickly fall flat if you haven’t gauged the veracity of your potential customers’ demand.
By Kerby Meyers
The 2012 approval of recreational marijuana use in Colorado unleashed a torrent of cannabis-related businesses across the state.
In a Leeds School of Business classroom on the University of Colorado Boulder campus, the wave of excitement swept up graduate students Ron Basak-Smith and James Eichner, who devised a new approach to packaging pot products. As an alternative to the industry norms, the two envisioned containers made out of biodegradable hemp.
After the idea proved popular with classmates, Basak-Smith and Eichner earned a spot in Canopy Boulder, a cannabis-oriented business accelerator, to conduct further diligence. Upon completing the rigorous course — and their MBA studies — they established Sana Packaging and started winning over customers by stressing that their solution wasn’t a novelty but a serious stab at reducing the volume of hazardous plastic waste in the industry.
“Initially, my gut said that there was a niche of people in this market, either owners or people who purchase products, who are environmentally focused,” Basak-Smith says. “But I had to validate that hunch, as the most important thing for any business is getting out and talking to customers and the business owners themselves.
“We could be the most passionate about our idea and sustainability, but when the outside world says ‘Yes, please do this type of thing,’ that’s super helpful.”
Entrepreneurship is built on innovation: Great ideas that spark in the mind of an individual — or a collection of folks — and are pushed through the development arc from concept to the marketplace.
Once there, however, the likelihood of success is driven heavily by validation: Confirmation from a significant number of strangers that the idea is indeed a viable solution and that the underlying issue it resolves is pressing enough to genuinely warrant a solution.
Similar to Basak-Smith, Niyati Kadakia refused to fully invest in her idea for Nulern, a clearinghouse for expert instructors and students of all ages, until she had a sense for its potential market.
So she conducted a survey of roughly 5,000 people at schools, colleges, universities, libraries and community centers to capture a sense of the possible demand.
“I could not possibly just go and build something without knowing if it was actually a pain point for anybody else other than me and my close circle,” Kadakia says.
Conversely, when inspiration struck software developer Chris Martinez, he started building a scheduling app and didn’t stop until he’d launched it. For months, he was frustrated by its inability to capture users, until a different type of inspiration hit.
“I came to realize that I wasn’t even using it to schedule my meetings,” he says. “If I don’t like my own product, how can I expect anyone else to use it?
“The failure to validate that idea properly was a big struggle that I had to overcome.”
Admittedly, those who are great at generating ideas can sometimes struggle to effectively convey new concepts and how they work. Plus, a propensity for perfection can inhibit the development of a prototype or minimum viable product (MVP).
For Beau Bergman and Brantley Pace, the initial founders of the travel planning and budgeting app Tripcents.com, the first step to validation involved acknowledging shortcomings. And then working around them.
“Neither Brantley nor I are technical, so we put together a PowerPoint to show what the app would look and feel like,” Bergman says. “Then we went to friends and random people at bars asking, ‘Does this make sense to you?’ ‘What does this look like to you?’ ‘Is this a product you would use?’”
From that clunky MVP, Tripcents has grown into a service with thousands of downloads. Meanwhile, customer validation has been an essential part of every enhancement and product modification since launch.
To be fair, the process of validation requires vulnerability and a willingness to accept that your idea may be great, but isn’t ready for prime time, according to Ryan Egan. The co-founder and CEO of Stackhouse, a developer of modular high-rise communities based in Tucson, Ariz., spent much of the company’s first year begging anyone he met with to tell him why the new approach to downtown living wouldn’t work.
“The most surprising thing about success is how terrifying it is,” he says. “Once someone validates your idea, it’s no longer a dream. It’s a plan, and you have something to lose.”
If you truly believe in the idea that’s been bouncing around in your head for a stretch, do yourself a favor and expose it to the world. The validation — or lack thereof — will prove invaluable.
To go deeper on the entrepreneurial experience of these founders — and 12 others — check out “Persistent Grit: Candid insights into the startup journey” on Amazon.
The 1 Step That Took My Company From An $8 Million Series A to a $55 Million Series B
When you’re raising your seed round, and often your Series A, you spend a lot of time explaining your company and product to investors.
By the time you reach a Series B, investors usually know most of the background information and don’t ask as many questions. For my co-founder Dave and I, that meant our Series B came together quickly — it closed in under two weeks.
In addition to the success we’ve had over the past few years, there was one overriding factor that allowed us to raise $55 million so quickly.
Every single person who invested in the round was part of our network or was introduced to us by a close connection.
I can’t stress how important your network is when it comes to fundraising.
It doesn’t matter whether you met a potential investor back in business school or just last year when a friend introduced you. People you meet at any stage in your career can impact you in ways you never initially imagine.
For instance, one of our investors, Tim Armstrong, was Dave’s boss at Google. Dave and I bumped into him at a conference, and he told us he wanted to be a part of our next round. But he also knew us Nancy Peretsman from Allen & Co — who ended up investing after meeting with me and Dave and learning more about the company.
You have to use opportune moments to introduce yourself.
I met another one of our investors, Anne Wojcicki, at a different conference where we had both been invited to speak. During a break in the conference, I saw her sitting in the hallway and decided to say hello.
I told her who I was, and after we chatted for a while, I mentioned we might be doing a round soon. She told me she’d love to be involved. When I emailed her later on, she introduced me to her sister Susan Wojcicki, who also ended up investing in the round.
There are so many little moments like this where you can either stand around and keep to yourself, or you can step outside your comfort zone and introduce yourself.
Choosing the latter and having a conversation — even a short one — is unbelievably important.
You never know who you’ll become connected with.
In 2018, Erica Keswin published her book Bring Your Human to Work, which happened to feature ThirdLove as an example. So, when Erica was in San Francisco, I invited her to come by the office and speak to our team about the book.
Afterward, we found out we’d be in Colorado skiing at the same time, and she invited us over to her house for cocktails one night. It turns out, Erica and her husband happen to be close friends with Katie Couric and her husband, John.
Now, to be honest, I was absolutely obsessed with Katie Couric when I was a kid. I had to write a report in middle school on what I wanted to be when I grew up, and even though the paper was ostensibly on being a broadcast journalist, it was really all about Katie Couric.
Meeting her, getting to know her, and finally having her invest in our company has been somewhat surreal. But none of it would have happened without the connection to Erica and the simple decision to Build a relationship.
Do what it takes to get yourself out there and tell your company story.
When initially getting ThirdLove off the ground, I spent most of my time with my head down to completely focus on building the company.
I think that’s the natural inclination of most founders. There’s a finite amount of time in the day, and it’s hard to show up and be social at a happy hour when you know you have an anxiety-inducing amount of emails to answer. But looking back, I could have done more to put myself out there and share the company story.
So, in 2018, I made a commitment to doing just that. I decided I’d be more proactive about attending speaking events and talking about the company. I started writing every week, building my own social profiles, and sharing the brand story. Truthfully, I do think it played a part in the success of our Series B round.
It takes time and energy to build your network. It isn’t easy. But if you devote a certain amount of time to meeting others, your network will become stronger and wider — and will eventually help you secure the funding you need to take your company to the next level.
If you’re considering getting an MBA, you’ve probably read and heard plenty of opinions from both sides of this contentious debate.
Some people think it’s a waste of time for entrepreneurs, while others will tell you business school launched their career.
I got my MBA because I wanted to change industries.
I specifically planned to move from a service industry — investment banking — to a more operational role in retail.
Personally, I have no regrets.
When making your decision, you have to remember that business school is not a silver bullet for your career or your life. It should be taken seriously, so my advice is to have a specific goal in mind that you want to achieve. Something that would be very difficult without an MBA.
Here’s why I’m glad I went to business school, and why it may not be a waste of time for you, either:
It’s a great way to make a career change.
When I started exploring a move from banking to retail, I had the same realization everyone does when they try switching careers: it’s really difficult.
It’s very easy to get pegged in one specific industry, even early on in your career. An MBA is a great way to make a dramatic career change because it lets you reset. It’s a fairly general degree, and you’ll have access to summer internships you can use to explore a new direction while you’re still in school.
Getting a degree doesn’t mean your dream career will suddenly land in your lap, but it does give you an opportunity to pursue that career if you’ve been working in a completely different industry.
It establishes a basic level of credibility.
An MBA alone is never going to get you a job — it’s not the magic bullet some people make it out to be.
But it is the type of credential that can get your foot in the door because it establishes a certain level of credibility in many people’s eyes. They assume you’re hard-working, ambitious, and intelligent.
You’ll make choices in your career that give people a sense of who you are, and business school is one that provides an added signal of dependability.
It can give you the confidence to start your own company.
I’m not saying that you need an MBA to start a company.
That said, almost all the female founders I know have MBAs. I think that’s partly because women tend to wait until they’re more confident in their ability to execute and run a business. They’re not usually trying to set up shop at 22 years old.
If you do get your MBA, you’ll definitely feel more prepared to start your own business, but it’s not as though you can’t fail now that you have those credentials.
You’re still going to have to learn fast and work hard to be successful.
It expands your network.
The network you leave business school with is invaluable. Both your classmates and alumni constitute a lifelong network that you can have a solid connection with.
It’s also a great time to reach out to people and solicit advice from them in a way that doesn’t feel as sales-y as it does when you’re working full-time.
When I was in my second year at MIT Sloan School of Management, I actually cold called Mickey Drexler, the CEO of J. Crew at the time, to ask if he could come to campus and speak. I honestly didn’t expect to get him on the line, so I was pretty flustered when he eventually picked up the phone. Although I didn’t make the most compelling case, he was extremely kind while turning down the invitation.
Business school is a unique platform, and it can give you opportunities to do things you’d never be able to otherwise.
An MBA makes sense only if you have a specific goal in mind.
I went into my program with a defined goal, and I didn’t let the pressures of business school distract me from it.
In fact, I was one of the last people in my class to get a summer internship because most of the recruiters/companies who came to campus were in consulting or finance. I was trying to leave finance, not get sucked back into it.
Plenty of people go to business school without much of a plan.
Their personal statements are about whatever they think will get them in the door, and once they’re in school, they’re pulled in a million different directions. Some of them end up doing the same thing they were doing before, only now they’re $150,000 in debt.
If you do choose to go, have a clear goal of what you want to do — and don’t let anything stop you from achieving it.
Thanks for reading.
For more insight into entrepreneurship, retail, and how to help women feel confident every day,follow me on Instagram @heidi.
Here’s the team you need, their roles, and bill rates
Every business that wants to launch an online ad campaign faces the same tough questions. How do I find ideas? What type of promotional channels should I use? How much does it cost? You can always find answers by searching on Google, but there are more than a million pieces of advice on how to successfully promote a business online. The challenge is how to implement these tips and use them for the specific, unique business.
This is the problem a digital agency solves.
If you’re looking to start a digital advertising agency, the most important asset of the company is the people, their skills, and how they work together.
Below is the blueprint and breakdown of the critical roles you’ll need, what they do, and how they work together.
Basic formulaProject Manager (PM)
The manager is a link between the client and the agency. $10 - $80/hr
Speaking figuratively, we can say that she translates ideas, thoughts and business metrics into the format that is the most effective for further work.
Also, the manager analyses the emotions and expectations from the client and breaks everything down, plans a budget, and creates a detailed brief. One of the challenges for a manager is to estimate deadlines for the creative department and make sure all expectations are met. Sometimes it is not that easy!
Quite often future creative ideas ignite exactly during the dialogue between manager and client.
Key responsibilities: - Communicate with the client (represents client and advertising agency to each other) - Define goals and metrics - Create a brief - Assess the budget and identify promotion channels - Estimate turnaround - Supervise the project
Strategy Analyst (SA)
Strategy Analyst is the voice of reason in an advertising agency. $25 - $120/hr
Their main role is to set the evaluated goals and objectives. A strategist makes sure that the creative team does not stray from the intended course. All their actions are based on in-depth market research and analyses of competitors. They aim to create a well-defined image of the target audience. Based on the realities of the present and the future, a strategist harshly cuts off the unbelievable and impossible. In other words, this is an image of a knowledgeable detective with a desire to find the most unexpected outcome of the investigation.
A Strategy Analyst grounds the creative team and guides them to maximize originality in approaching a specific client/task/campaign with the correct angle.
The most splendid ideas emerge exactly at the strategy stage. The strategist finds the beginning of a very unknown path to uniqueness, which has not yet been laid by any competitor. It’s important to bear with the process to ensure proper extraction of the idea.
Most of the known digital companies start their research with surveys and statistics.
Xfinity Mobile Operator launched the campaign “Data into Dollars” based on analytical data converted into money equivalent. Do you know how much it costs to watch a tutorial video?
It is incredible. It all starts with a creative idea.
Or, Pedigree brand launched a campaign called “Dogs for dogs”:
Pedigree conducted research and found the most popular Instagram accounts with pictures of dogs and puppies. Using this data the company replaced all these pictures with images of dogs from shelters for just one day. The campaign success was mind-blowing. Thousands of dogs found a new home. It all started with a creative idea.
Key responsibilities: -Phrase the problem highlighted in a brief - Conduct market and competitors analysis - Develop media strategy - Develop methods of a brand positioning - Do planning - Implement predictive modeling
Art Director + Copywriter (AD+CW)
This is the place where the best ideas are born! $25 - $90/hr
The art director and copywriter usually work together, like Bonnie and Clyde, Mulder and Scully or Fish and Chips. This couple is called the creative department, which is the heart of an advertising agency. Often the creative department becomes the main driver for small agencies and helps them to find the right place in the advertising industry.
Working on the campaigns’ brief means endless brainstorming to create insights and sketches. Eventually, these creations turn into complete concepts for ad campaigns and unique brand stories.
If we talk about numbers, it is very hard to assess the effectiveness of creativity or its ROI. However, long-term goals like building an emotional connection with consumers require creative work.
Let’s look at the example of a strong visual impression. Creative company “Destination Pride” uses data from all over the world to show how people in different countries feel about LGBT. All data is displayed through colors. It is simple and visual. To change the world you just need an idea.
Outstanding copywriters can extract the right insight and verbalize it using their word power. Here is another example. The ad campaign with hashtag #Runlikeagirl has become an outstanding success in the advertising industry today.
It was created by “Always” with the purpose to change how people view women when saying “you run like a girl.” It’s simple and genius.
Key responsibilities: - Produce a set of creative concepts based on research findings and strategic insights - Create content for TV commercials, billboards, website pop-up windows, direct mail or mixed media combination
AD - Supervise visual aesthetics - Create ad campaign image - Work on translating idea into visual
COPY - Content QA - Translate idea into story - Work on translating idea into copy
Design studio (D)
$8 - $50/hr
After the creative team finishes work, it is designers turn to get involved. They polish ideas, add details and finalize concepts. Teamwork between the creative department and designers can be called symbiosis. To make sure that idea development is on the right path, art director and copywriter have to be involved in the design process.
Key responsibilities: - Turn creative concepts into visual, keeping the original idea - Work with marketing materials and any types of layouts - Prepare material at the final stage
Media producer (P)
Media producer prepares idea to go out there like a jeweler that cuts a diamond. $25 - $120/hr
This role makes sure that only the best independent specialists, who are not from the agency, are working on the idea. Animators, directors, screenwriters, recording studios, translators, musicians, cameramen, and developers get together to bring the idea to life.
The Media Producer and their team are responsible for launching the project. They clearly understand the real market and its demand. During the development stage, the producer works with the creative department, consulting on the process and determining all the “to be or not to be” things.
He or she also makes sure that the cost of implementing these ideas comply with the budget.
Key responsibilities: - Follow the implementation of the project after the idea is approved - Hire a team of professionals to implement the project - Monitor budget compliance
Chiefs are knights in shiny armor. They make the hardest decisions and choices. If the idea is approved the chiefs like superheroes will do anything for its implementation!
The chiefs know if “the game is worth the candle,” which means that the idea has potential. They decide at what point it is better to push back or conversely rush forward and fight for the idea. The chiefs also liaise with the client when necessary to improve the potency of the project without losing its creative part.
The chiefs are the engine and navigation system of the agency. They monitor the work of the wards in each department to increase productivity. These guys are the ones who are responsible for the result.
CEO is the personality of the agency. This person is responsible for the image of the business and its communication with the outside world. The CEO analyzes, envisions the future, and has a clear understanding of what product and ad campaign will go viral. He or she has a decisive and most weighty opinion.
Key responsibilities: - Select and refine the ideas that best support the strategy and creative brief - work directly with the client - control the process at all stages - be responsible for the workflow - represent the image of the agency
As you can see, assembling a digital ad agency can be a complex and multistage process. An integrated approach and professional team is one of the keys to success. Using the following formula, you can calculate a working budget, both for a large advertising agency or for a small shop.
If you’re a smaller advertising agency, it won’t be uncommon for the chiefs’ and media producers’ role to fall on the shoulders of the client. Although, the art-director / copywriter, design studio, strategist and manager duties will be your agency’s responsibility:
Are you starting at the very beginning of the journey? No problem. You should find individual freelancers (FL) to flex-scale. Be aware that with this approach much more involvement in the process is needed:
Do you want to create an ad for your client that will go viral? Is your goal to make your client’s product stand out from competitors? Is your dream to participate in advertising awards? If so, we need to add one more very important factor to our formula.
The greatest value an agency can provide is a winning idea.
The secret to success for most advertising campaigns is their access to high-quality data and creative ideas. However, you should always keep in mind that there is a limit to the number of creative ideas that can be generated and tested, due to cost. Finding creative insights requires large resources and involves a team of professionals. Your challenge is to generate and highlight the “winning idea” from all the rest within the established time and budget framework.
Creative = effective
Today, more creative advertising means better results. The old-school safe approach to marketing is not viable anymore. Most marketers have an ultimate goal to overcome competitors. The most sustainable and reliable way to do this is creativity.
The real-world experience shows that the most effective solution for achieving virality is not necessarily the most expensive, on the contrary, if there is a good idea, it can be free.
“KFC” tweeted a unique recipe for its wings during the campaign “11 Herbs & Spices”.
The company created a quest and posted it on its profile. As a result, brand loyalty has greatly increased, KFC had thousands of publications and millions of likes without spending a penny.
Good business ideas can convert likes and views into a real product. For example, an ad campaign from Opel “Pay With Views” offers to pay for a test drive by the number of views you get on YouTube.
The right idea sets the growth vector for the advertising campaign. Even with a small budget, a strong business idea can deliver phenomenal results, as depicted by the following formula:
Effectiveness = (all efforts used to develop ad campaign) x (idea)
Using an integrated approach, the creative team determines a “very core marketing message,” filters out unnecessary ideas, and highlights the most authentic and high-quality insight that is intended to resonate with its target audience.
Your goal as a digital agency founder is to create innovative advertising concepts that help businesses become more interesting and recognizable.