Boom StartSuper Laws of Successful

Entrepreneurs

Gary RhoadsS

tephen Mack Covey Professor of Marketing/Entrepreneurship

Lessons Learned from 10 years of

research with Entrepreneurs

Sharpen The Angle

How smart entrepreneurs quickly go from good idea to great idea and to profitability.

Good Idea

Great Idea

Profitability

How Does David Beat Goliath

The Audit ChecklistSharpen the Angle Need to Believe

Reason to Believe Blows Away

Expectations Quantifiable Support Unique Product

Claim

Ride Horses Do you have powerful help Benefactors Beta customers Anchor customers Rabbits and elephants Heroes Positive mojo culture

Play Big Feed a frenzy Underdog

benefits Catch phrase Touch points Web of

advisors

Do an Event Experiential events Love fest Compelling product

demonstrations

Reap the Rewards Sell, sell, sell Lower barriers Value price Right channel Augment core

Successful BYU Student Entrepreneurs

My Entrepreneurial Experiences

Lifestyle Happiness

Occupation Overall well-being

Source: Gallup-Healthways Well-Being Index 2009Note: Scores are based on respondents’answers to six categories of questions about work and life quality

• Business Owner 72.5Business Owner 72.5• Professional 71.5Professional 71.5• Manager/Executive 70.9Manager/Executive 70.9• Farming/Forestry 67.8Farming/Forestry 67.8• Sales 67.6Sales 67.6• Clerical 66.1Clerical 66.1• Construction 65.0Construction 65.0• Installation 64.4Installation 64.4• Service 64.0Service 64.0• Transportation 62.6Transportation 62.6• Manufacturing 62.1Manufacturing 62.1

Motivation to Write the Book!

Lessons LearnedEntrepreneurs are Tactical (botton-up)

not Strategic (top-down)

Incremental InnovationsCreativity Loves ConstraintsKey to Success is Developing Angles

Must Be Tactical not Strategic

Corporations are obsessed with “what they want to do.” Companies set the strategy first and when if fails, they try to figure out what they need to do is adjust the tactic.

Entrepreneurs win or lose at the tactical level, not at the strategic level

Incremental Innovations

“Entrepreneurs seldom invent and market radically distinct products; rather, they build their ventures around incremental innovations and modifications.” --HBR 1998

Entrepreneurial R&D

Rip-off... identify a good idea from your neighbor where there is significant pain or opportunity

Design... modify, add to, take away, make it harder, use it differently, or completely change the product by sharpening the angle

Creativity Loves Constraints!

Plumber

Truck

Creativity Loves Constraints!

Let’s Test Your Creativity to find a New Product or Angle using the Process of

Constraints!

New Umbrell

a

New Hot Dog

New Watermelon

Proprietary idea Exceptional qualifications Significant capital

What You Don’t Need

What You Do Need!

Angle

MethodMethod

1.1. Take something outTake something outof your productof your product

2.2. Put something inPut something inyour productyour product

3.3. Answer to consumerAnswer to consumergripesgripes

4.4. Visible differenceVisible difference

5.5. Make the taskMake the taskeasiereasier

6.6. Use products in aUse products in anew waynew way

7.7. ProductProductsubstitutabilitysubstitutability

8.8. Don’t be literal,Don’t be literal,be creativebe creative

9.9. Look overseasLook overseas

ExampleExample

Royal Crown removedRoyal Crown removedcaffeinecaffeine

Adding fruit juice toAdding fruit juice tosodasoda

““Locked my keys inLocked my keys inmy car”my car”

““Same old cereal”Same old cereal”

Time-consumingTime-consumingoven cookingoven cooking

Wine mixed withWine mixed withseltzerseltzer

Cereal substitute forCereal substitute forcereal-avoiding teenscereal-avoiding teens

A healthy PopsicleA healthy Popsicle

Healthy BreakfastHealthy Breakfast

ResultResult

First decaffeinated colaFirst decaffeinated cola

SliceSlice

Warning bellWarning bell

Adding X’s to the O’s in CheeriosAdding X’s to the O’s in Cheerios

Jet Stream OvenJet Stream Oven

Wine coolersWine coolers

Total Breakfast BarsTotal Breakfast Bars

Dole Fruit Juice BarsDole Fruit Juice Bars

Yoplait YogurtYoplait Yogurt

Nine methods for Developing New Angles/CategoriesNine methods for Developing New Angles/Categories

Super Law #1:Sharpen The Angle

Five Dimensions of an Angle

1.Need to Believe

2.Reason to Believe

3.Blows-Away Expectations

4.Quantifiable Support

•Unique Product Claim

Big Problem = Big Opportunity

Nobody will pay you to

solve a non-problem!

Sharpen the Angle - NTB

1. Need to Believe - Is there a large, addressable market for the large, addressable pain?

The Right Question: Quotes to Live By

•The question is not what you look at but what you see. Henry David Thoreau

•If I had asked my customers what they wanted, they’d have asked for a faster horse. Henry Ford

Never ask a consumer what they want, ask them what problems they are trying to

solve!

Klymit Solves the Problem

Klymit

Five Dimensions of an Angle

1. Need to Believe - Is there enough pain or opportunity to make people pull out their credit card?

2. Reason to Believe - Are the benefits easy to demonstrate not just describe?

My mama always said, “seeing is believing!”

Which has the better RTB?

Golfers want to putt the

ball straight... so which putter

has the strongest reason to believe?

A B

Strong RTB = Strong $ale$

GOLD (EDITOR'S CHOICE)ODYSSEY WHITE HOT XG 2-BALL SRTSTREET PRICE: $200.SPECS: Eight Versions (White Steel, White Hot and regular 2-Ball).KEY TECHNOLOGY: The 2-Ball uses golf-ball-size discs on the top of the putter to help the user align square to the target. The SRT has an alloy ring that pushes weight away from the center of gravity in the aluminum head, providing support and increasing moment of inertia.PANELIST COMMENTS: "It has become the standard others are measured against. . . . This well-worn design just keeps getting better every time they redo it. . . . The insert is an improvement over the White Steel in terms of feel."JUDGES' VERDICT: It's almost impossible to remember what putting was like before the 2-Ball. It's not a gimmick, certainly not in its latest technological form. The ring improved moment of inertia last year, and the White Hot XG insert creates a favorite feel this year.

Golf Digest - Hot List Again

Develop a Reason to Believe!

Invent a new soap for parents that will “make them believe” children really are washing their hands!

Squid Soap

Teaches Proper Handwashing!• Press pump & get "inked" (non-toxic, child safe ink)• wash for 15 to 20 seconds• Ink's gone - hands are clean and healthy!

Cleaner hands. Healthier kids.™

Five Dimensions of an Angle1. Need to Believe - Is there a large,

addressable market for the large, addressable pain?

2. Reason to Believe - Are the benefits easy to demonstrate not just describe?

3. Blows-Away Expectations - Is there a specific usage situation or consumption experience being targeted?

Dominate the situation to nail the need!

Dominate a Usage Situation

Singleworkingadults

Marriedno

children

Marriedwith

children

Quickgut fill

Too tiredto cook

Weekendreward

Time to celebrate

Person

Situation

Five Dimensions of an Angle

1. Need to Believe - Is there a large, addressable market for the large, addressable pain?

2. Reason to Believe - Are the benefits easy to demonstrate not just describe?

3. Blows-Away Expectations - Is there a specific usage situation or consumption experience being targeted?

4. Quantifiable Support - What are the numbers supporting the relative advantage?

5. Unique Product Claim - How is this unique compared to the closest competition?

How do you compete with...

Coca-Cola and Pepsi?

Create a new category and dominate a

situation--extreme sports!

Sharpen the Angle - UPC

UniqueProduct

Valued by Customers

Flop

LowPrice

Your unique claim must be valued by the customer.

Mini Case: Aprons

Make Them Unique!

Flirty Aprons

Believing in Yourself and Working Hard:Is the Key to Entrepreneur Success, Right?

All things come to those who hustle while they wait. Thomas Edison

Super Law # 2: Ride Horses

Best Practices:

•Benefactors•Beta Customers•Anchor Customers•Rabbits and Elephants•Heroes•Positive Mojo culture

The key to success in life is learning to believe in and rely on others

Find the sort of horses that you can ride to the bank

A fast set of horses increases your speed to market

It’s not about “what you know” ...it’s about “who you know”

A good horse will be a champion for your “blue ocean” angle

Ride Horses!

Horses and Endorsers are not the Same!

Power to make choices

Recognition for contribution

Credibility among peers

Stock to increase wealth

Being part of a winning team

A-List Horses cost...

A-List Endorsers cost...

Hard cash

Long green

Scratch

Wampum

Mucho dinero

Entrepreneurs must earn passion and make heroes because they can’t afford to do otherwise!

But I Can’t Afford a Horse!

Want a Horse?Why would a Horse want to be associated with a new angle in the market?

2 Trade Association President

3 Local expert in your State

Looking smart and up-to-date1 Industry Guru

Angles with “wow factors” put them on the cutting edge

Looking credible because he/she is a “thought leader.” Experts love to jump on a winning bandwagon

Good angles attract powerful horses!

Student Gets a Horse

Super Law # 3: Play Big

Best Practices:

•Feed a Frenzy•Be an Underdog•Hatch a Catch Phrase•Reach out with Touch Points•Build a Spider Web

Play Big--Be a Puffer Fish

Perception is Reality

Uninflated Spiny Puffer Fish

Inflated Spiny Puffer Fish

Why Puffer?Customers want to see a stable

company, but you are not established

Advisors want to work with a viable company, but you are not proven

Suppliers want to partner with the industry standard, but you are a niche player

Partners want to team up with a reputation-builder, but you don’t qualify

So Play Big even though You’re Not

Super Law #4: Throw an Event

Best Practices:

Get ExperientialHave a Love Fest

Make Demonstrations Compelling

Marketing Events

Marketing tactics are really marketing events

Events can be activities, exhibitions, hoopla, happenings, gatherings, tournaments, competitions, matches, races, games, etc

Having a focus on throwing Marketing Events reminds us that we are selling a consumption experience and not just a product

Will It Blend

Gary RhoadsS

tephen Mack Covey Professor of Marketing/Entrepreneurship

kendallhunt.com

Thank you

Marriott SchoolBrigham Young University