It is a wide ranging interview covering many of the issues Startups all over the world face. It is a three part series starting with this segment, part one: http://youtu.be/BI2f2d76VKo

The companies that attended this year were:  8 Shot International, Australian Survey Research, Aviator, Evanscorp, iAsset, inference Communications, Jasondb, Red Lizard Software and X-Ped.  Mick Johnson Whereoscope and Bardia Housman Business Catalyst (both of whom we interviewed previously) were also there as guest speakers.  Whereoscope looks pretty interesting as it is focused on using an iPhone App to find out where your kids are.  Putting the obvious big brother implications aside and being a parent myself I’m confident there is a market for it, if it is properly positioned and marketed.

The speech by Andrew Lacy (Tapulous / now owned by Walt Disney) was especially entertaining as he provided the entrepreneurial audience with some sage advice (at least from my perspective).  He didn’t come out and say this but the theme was don’t let your business plan get in the way of success.  Tapulous’s business plan was not focused on “Tap Tap” but Andrew saw an opportunity when an Engineer / inventor he was looking at hiring came in and although he knew he wouldn’t be a good fit as an employee, he bought the App and 40 million downloads later he “guessed” right.  The other item he brought up which I also though was prescient was the element of luck.

Many times you have the right idea but the timing is wrong, the team is wrong or something just doesn’t click the way it should.  In his case the App was a bit of luck and Disney coming in was also lucky as they were looking to raise capital rather than “exit”.  Having created a site for selling photography back in the late 90′s I completely get the timing thing as I had the right “idea” but it was too soon, (internet speed for most consumers, was not ready for buying photo’s on line).  Today there are many successful photography sites; RedBubble, Art.com etc.,.

The other take away I had was savvy.  For many CEO’s it is much easier to stay the course than to jump on something in midstream, especially when you’re playing with Venture Capitalist money.  The VC’s bought into Andrew’s idea (meaning the CEO “sold it” ) and the rest is a bit of Aussie history.

My take away from last night was “don’t let a business plan get in the way of success”!

Lets provide an example to provide some clarity.  Imagine that the Buffalo Bills have been scouting the Indianapolis Colts and have broken down their strengths and weaknesses preparing a game plan to exploit what the Bills do better than the Colts.  The Colts meanwhile say “the Bills haven’t been to the playoffs in a decade, why bother, let’s take it easy this week and just play – their powder puffs, no competition for us.”  First of all the Bills have been a bad team for about the same amount of time the Colts have been outstanding put that aside and I guarantee you that the Bills would win.  Not because they are a better team (they aren’t) but because the Bills put the time and effort into their competitive analysis and went in with a game plan knowing what they could do better and faster than their opponent.

Today’s NFL teams spend millions of dollars on their competitor analysis employing coaches that are completely focused on what their opponents are doing as well as scouting their own team for tendencies a competitor could exploit.  In fact, they are scouting their competitors year round looking for potential kinks in their proverbial armor knowing that one play will often make the difference between success and failure.  On game day guys on the field report back after every series to their coaches – this is what I think they are trying to do, I think we should counter with a deep post because the right cornerback is nursing a sore hammy and I think I can get by him.  The famous warrior cum author Sun Tzu would say that you need to plan but also be prepared for a changing battle field environment and be able to rapidly react to your competitor(s) in order to succeed.  Whether it is the sports arena or the battlefield knowing your opponent is critical first step to winning.

The business world is no different.  With the best run companies there are known competitors, up and coming competitors and companies that are on the radar but not real competition yet.  Whenever I interact with a potential new client I always ask; what differentiates your product i.e., what do you do better, cheaper or faster than your competition and most importantly – how much does it matter to your current or potential customers?

A competitive analysis starts with the basics:

Who are your competitors?

What products or services do they offer?

How does their product compare to yours (features & benefits)?

How is their product priced, delivered and serviced compared to yours?

What differences between your products and your competitors “matter to the client”?

How are they doing (Company wise)?

What is your USP – Unique Selling Point?

Obviously this is just a start but hopefully you’re getting the picture.  You need to arm your sales force with as much knowledge as possible prior to the battle.  Cold calling today rarely works in the US (in other countries it does – people actually pick up the phone, rather than hiding behind voicemail!) and every new sales opportunity is a precious opportunity that must be maximized.  By understanding what your competitors will say and how they position their product your sales team will know how to counter and properly set up your product for the sale prior to the call.

It is also critical from a long term strategic perspective.  What features and benefits will you need to add in order to gain greater market share or combat a pesky competitor that constantly trumps you?  Should you be competing on said features or developing something completely novel to leap frog your competitors?  A competitive analysis is not a static document and must be added to by your field sales force on a regular basis to ensure timely opportunities are not missed.

At the end of the day, a competitive analysis usually comes down to “what can you do better, cheaper and faster than your competitors.”  I guarantee you that the best companies in the world; GE, Microsoft, Oracle, IBM, Toyota, Cisco, McKinsey Consulting etc., all put major dollars into it because they know they have to.  If you don’t, you don’t understand your business, your competitors or your customers as well as you should and you’re not doing as well as you could!

Bill was a bit taken aback when I told him I would try to set up some meetings (I was able to) but could not guarantee anything due to the short notice, the need to get up to speed on his product as well as needing to know a bit about his competitors.  His next shock was when I asked him who his competitors were?  He said he didn’t have any and within 10 minutes I showed him five (95% of the time when someone tells me they don’t have any competitors I know they haven’t done any research).  I then asked him how he was going to price his product, deliver it and service it after the sale.  He replied “She’ll be right mate, no worries”.

Well, I was worried.  I was putting my neck on the line to get Bill meetings from my business network based on my reputation and he needed to be ready or I was not willing to put him in front of anyone.  Long story short I spent quite a bit of time with him that first day and after going through the fundamentals of international market entry strategy planning, he bought into it, starting mapping out a strategy and ended up setting up US operations a couple of years later.

I have seen similar scenarios many times and I should no longer be surprised but there are always a number of aspiring exporters that jump on a plane fly over and land with their proverbial sales “six guns” shooting expecting to make big money.  I liken it to the “Fire, Ready, Aim” scenario which often leads to disappointment not only for the exporter but often for any purchasers who were unlucky enough to buy from them.

Preparing for market entry requires a pre entry plan that includes a solid reality check.  How does your product stack up against the potential competition in your entry country of choice?  And, what do you do better, cheaper and faster than said competition?  If you can’t clearly articulate what makes your product / service better or it isn’t different then you’ll need to compete on price and service (which then becomes what you differentiate by).

On my next post, we will dive into what a competitive analysis should look like and what the objectives are.

The first and most critical step is commitment.  By that I mean is your company committed to an export strategy rather than trying to get a quick hit to unload extra product or help during a downturn?  Many companies will not make money in the first year or two of a new market entry and they need to be prepared for it, ready to ride out the bumps as part of a longer term strategy.  With commitment comes the next most important stage which is planning.

Developing an international marketing plan starts with the basics.  What is your company selling?  Who is buying it in your current market and how does it compare to your current in country competitors?  This is often skipped but I believe it is a critical first step.  If you don’t know what you do better, cheaper or faster than your competitors in your current environment why, would you think you could do it in another, that you know even less about?  I also think if you’re currently working in a small market and if you’re not one of the leaders there with your product / service you’re probably not ready for a larger market like the United States – which is often the goal of many aspiring exporters.

Now that we understand what we do well in our current environment, its time to look at the chosen market a company thinks they can export into.  My next blog will revolve around the next step, what a market entry analysis should include and how to go about developing one.

2009

Purpose

The purpose of the International Business Plan Event is to provide an opportunity for the participants to

• apply marketing skills in an international setting

• prepare a written proposal for a new business venture (a new business or a new product or service of an existing business)

Procedure

• The project consists of two major parts: the written document and the oral presentation. The written document will account for 60 points and the oral presentation will account for the remaining 40 of the total 100 points.

• Each event entry will be composed of one to three members of the DECA chapter. All participants must present the project to the judge. All participants must respond to questions.

• The body of the written entry must be limited to 30 numbered pages, including the appendix (if an appendix is attached), but excluding the title page and the table of contents.

• The Written Event Statement of Assurances must be signed and submitted with the entry. Do not include it in the page numbering.

• The participants will bring all visual aids to the event briefing. Only approved visual aids may be used during the presentation.

• The oral presentation may be a maximum 15 minutes in length. The first 10 minutes will include an explanation and description of the project followed by 5 minutes for the judge’s questions.

• The judge will evaluate the presentation, focusing on the effectiveness of public speaking and presentation skills and how well the participants respond to questions that the judge may ask during the 5 minutes following the presentation.

SkUs Peveoped

The participants will demonstrate skills described by the performance indicators for general marketing as well as learn/understand the importance of

• communications skills—the ability to exchange information and ideas with others through writing, speaking, reading or listening

• analytical skills—the ability to derive facts from data, findings from facts, conclusions from findings, and recommendations from conclusions

• critical thinking/problem-solving skills

• production skills—the ability to take a concept from an idea and make it real

• teamwork—the ability to be an effective member of a productive group

• the ability to evaluate group presentations

• priorities/time management—the ability to determine priorities and manage time commitments and deadlines

• the basic steps involved in starting a business in an international setting

• the ability to interpret financial statements

• customer needs

• the impact of global cultural differences

Complete lists of performance indicators are available from DECA’s Web site, wwwdeca. org/celisting. html.

Format GuideIine for the Written entry

Your written entry must follow these specifications. Refer also to the Written Entry Checklist and the Written Entry Evaluation Form.

Title page. The first page of the written entry is the title page. It must include in any order, but is not limited to, the following:

INTERNATIONAL BUSINESS PLAN EVENT

Type of business proposed

Name of DECA chapter

Name of high school

School address

City, State/Province, ZIP/Postal Code

Names of the participants

E-mail address

Date

The title page will not be numbered.

Table of contents. The table of contents should follow the title page. The table of contents may be single- spaced and may be one or more pages long. The table of contents page(s) will not be numbered.

Body of the written entry. The body of the written entry begins with Section I, Executive Summary and continues in the sequence outlined here. The first page of the body is numbered 1 and all following pages are numbered in sequence. Page numbers continue through the bibliography (required) and the appendix (optional).

Follow this outline when you write your entry Points for each section are shown on the Written Entry

Evaluation Form Each section must be titled, including the bibliography and the appendix

I EXECUTIVE SUMMARY

One-page description of the project

II INTRODUCTION

The type of business, product or service proposed and a brief description. A brief description of the country proposed for trade, the rationale for selecting the country, identification of existing trade barriers, identification of sources of information (research sources and interviews).

III. ANALYSIS OF THE INTERNATIONAL BUSINESS SITUATION

A. Economic, political and legal analysis of the trading country

1. Describe the trading country’s economic system, economic information important to your proposed business/product/service, the level of foreign investment in that country

2. Describe the trading country’s governmental structure and stability, how the government controls trade and private business

3. Describe laws and/or governmental agencies that affect your business/product/service [i.e., labor laws, trade laws (U.S.A. and/or Canada and foreign)]

B. Trade area and cultural analysis

1. Geographic and demographic information, important customs and traditions, other pertinent cultural information, competitive advantages and disadvantages of the proposed product and/or service

2. Market segment analysis target market (age, income level, population estimate, other specific demographic and economic information) customer buying behavior related to the proposed product and or service

3. Analysis of the potential location—importance and requirements of each trade document required by the U.S .A. and/or Canada and the country of choice

IV. PLANNED OPERATION OF THE PROPOSED BUSINESS/PRODUCT/SERVICE

A. Proposed organization

Type of ownership and rationale; advantages/disadvantages of the type of ownership selected; start-up steps to form the business; planned personnel (or functional) needs; proposed staffing to handle managerial, financial, marketing, legal, production (if applicable) functions; proposed organization chart, brief job descriptions, if necessary

B. Proposed product/service

1. Details of the product(s)/service(s) to be offered; include potential suppliers, manufacturing plans, inventory policies, if applicable. If the business is a service business, appropriate information about plans to provide the service, including necessary supplies

2. How the product/supplies will be transported to/from the home country; costs, benefits, risks of the transportation method; documents needed to transport the product/supplies

C. Proposed strategies

1. Proposed pricing policies, what currency will be used, costs, markups, markdowns, relation to competition, factors that could affect the price of the product (e.g., competition, political conditions, taxes, tariffs, transportation costs)

2. Proposed promotional program, promotional activity(ies), media availability, costs, one-year promotiollal plan outline

V. PLANNED FINANCING

Projected income and expenses (The following are recommended items to be included. You

may select the appropriate items for your business.)

A. Projected income statements for first year’s operation (sales, expenses, profit/loss)

B. Projected balance sheet for the end of the first year

C. A brief narrative description of the planned growth of the proposed business, including financial resources, needs and a brief three-year plan projection

VI. BIBLIOGRAPHY

VII. APPENDIX

An appendix is optional. Include in the appendix any exhibits appropriate to the written entry, but not important enough to include in the body; these might include sample questionnaires used, letters sent and received, general background data, etc.

CheckHt standards

In addition to following the outline above, when preparing your written entry you must observe all of the

following rules. The purpose of these rules is to make competition as fair as possible among participants.

Refer also to the Written Entry Checklist.

1. The Written Event Statement of Assurances must be signed and submitted with the entry or the entry will receive 15 penalty points.

2. The entry must be submitted in an official DECA written event folio. Folios are available from DECA IMAGES (WEF000). No markings, tape or other material should be attached to the folio. One photocopy or the original typed document must be submitted. Participants may keep a copy for use in the presentation.

3. Sheet protectors may not be used.

4. The body of the written entry must be limited to 30 numbered pages, including the appendix (if an appendix is attached), but excluding the title page and the table of contents page.

5. The pages must be numbered in sequence, starting with the executive summary and ending with the final page of the appendix Do not ue separate sheets between sections or as title paec fOr ections.

6. Major content of the written entry must be at least double-spaced (not space-and-a-half). The title page, table of contents, executive summary, bibliography, appendix, footnotes, long quotes (more than three typed lines), material in tables, figures, exhibits, lists, headings, sample letters, forms, etc., may be single-spaced.

7. Entry must be typed/word processed. Handwritten corrections will be penalized. Charts and graphs may be handwritten. (Judges will be instructed to ignore attempts to achieve a competitive advantage due to the quality of word-processing equipment available.)

8. All material must be shown on 81/2-inch x 11-inch paper. Pages may not fold out to a larger size. No extraneous information may be attached to the pages and tabs may not be used.

9. Decorative artwork, pictures, illustrations and desktop publishing techniques may be used throughout the manual, including the title page and table of contents. Photographs in the manual must be scanned and placed as digital files.

10. The entry must follow the sequence outlined. Additional subsections are permitted.

11. The table of contents should follow the title page.

Presentation Gudeflne

• Prior to the presentation, the judge will evaluate the written portion of the entry. The major emphasis of the written entry is on the content. Drawings, illustrations and graphic presentations (where allowed) will be judged for clarity, not artistic value.

• The participants have assumed the roles of trainees for a multinational company. The participants have been assigned the task of investigating and developing a plan to begin a new business venture to either import or export a product and/or service to or from a country of their choice.

• Playing the role of a multinational business executive, the judge will evaluate the written document and then interview the participants, as if he/she were actually going to approve (or disapprove) the proposal.

• The participants will present the plan to the judge in a 15-minute presentation worth 40 points. (See Presentation Judging.)

• The presentation begins immediately after the introduction of the participants to the judge by the adult assistant. Each participant must take part in the presentation.

• The participants will spend not more than 10 minutes, at the beginning of the presentation, describing the plan. Each participant may bring a copy of the written entry or note cards pertaining to the written entry and use as reference during the presentation.

• The judge will spend the remaining 5 minutes questioning the participants. (See Presentation Evaluation Form.) Each participant must respond to at least one question posed by the judge.

• The participants may use as visual aids only display material mounted on not more than three (3) standard-sized posters 22 inches by 30 inches each (variable by 1/2 inch) and/or one (1) standard-sized presentation display board 36 inches by 48 inches (variable by /2 inch). Participants may use both sides of the posters, but all attachments must fit within the poster dimensions. Only visual aids that can be easily carried to the presentation by the actual participants will be permitted, and the participants themselves must set up the visuals. Participants are allowed to make use of a desktop flip chart presentation easel 12 inches by 10 inches (dimensions of the page). Participants are also allowed to make use of a personal laptop computer and/or a hand-held digital organizer they provide. No set-up time will be allowed. No sound may be used. If participants use a personal computer, they must bring their own battery power pack, as electrical power will NOT be supplied. No other materials may be brought to or used during the presentation by the participants.

• No material of any kind may be passed to the judge.

• If any of these rules are violated, the adult assistant must be notified by the judge.

Written entry Judging

Please familiarize yourself with all of the event guidelines before starting to evaluate the written entry. Penalty points (see Written Event Checklist) have already been assessed. The Written Entry Evaluation Form follows the outline shown in the section entitled Guidelines for the Format of the Written Entry, which explains in greater detail what should be discussed in each section. As you read, ask yourself, “Will this work? Is it realistic? Does the writer sound knowledgeable? Is the writer comniunicating clearly?” Ultimately, you must decide, “Would I lend money to or invest in this person and this proposal?”

You should complete the Written Entry Evaluation Form, making sure to

• place the name and identification number label on the Scantron sheet (unless it has been done).

• fill in the appropriate score for each section.

• write the score given in the space provided at the right. No score filled in or extended means that the participants will receive a zero for that area.

• ignore attempts to achieve a competitive advantage due to the quality of word-processing equipment available.

• double-check to ensure you have scored every category.

• total your score. The series director will double-check all addition.

A maximum score of “Exceeds Expectations” in any category means that, in your opinion, the information is presented effectively and creatively; nothing more could be expected of an applicant.

A “Meets Expectations” rating means that the information is presented well. Though there may be a few

minor problems or omissions, they are not significant. Creativity, however, is not shown to any great degree.

A combined total score of 70 or better on the written and presentation sections will earn the participant team

DECA’s Certificate of Excellence at the international conference.

A “Below Expectations” score means that the information presented does not meet minimum standards of acceptability.

A “Little/No Value” score means either that some major flaw has been noted that damages the effectiveness of the proposal (this may be a major omission, a serious misstatement, poor writing or any other major flaw) or that the information presented is of no value (does not help the proposal at all).

It may help to go through several entries before actually starting to score the entries. Take notes on a separate sheet of paper if you wish to ask the participant about specific areas of the written entry during the presentation.

Presentation Judging

Participants will make a 15-minute presentation to you. You are role-playing a multinational business executive. You may refer to the written entry, or to your notes, during the presentation.

During the first 10 minutes of the presentation (after introductions), the participants will describe the proposal and make the request for approval. Allow the participants to complete this portion without interruption, unless you are asked to respond. Each participant must take part in the presentation.

During the final 5 minutes, you may question the participants. At least one question must be addressed to each participant. To ensure fairness, you must ask each participant or group of participants the same three questions (based on the Presentation Evaluation Form):

1. one question on analyiing thc international bu3incv 5ituation

2. one question on planning the operation of tho propod biicincc

3. one question on planning thc financing and projecting income and expenses

You should prepare these thrce qucstion aftcr you have evaluated the written entries but before the preen tation hrginc.

After asking the three questions, you may ask additional questions that seem appropriate, based on your notes or on the written entry itself (to which you may refer during the preseiltation).

At the conclusion of the presentation, thank the participants. Then complete the Presentation Evaluation Form, making sure to record a score for all categories. Maximum score for the presentation is 40 points.

We hope you are impressed by the quality of the work of these participants. If you have any suggestions for improving this event, please mention them to your series director.

We thank you for your help.