startups Archives - Page 12 of 117

The 1 question we must ask before we ever send a business proposal

Posted on September 15, 2015 by Steve Sammartino

If you’re in the business of selling, and you’re in the business to business game there is no doubt you’ve had someone ask you this:

Can you send me a proposal?

Happy days, right? No. In fact, this is the time that we must ask the question before we send them anything. And in case you’re are wondering, this is the question:

Sure. What has to be in it for it to be a ‘Yes‘?

The reason we have to ask this, is that the proposal question is very often a friendly way of saying, go away, not right now, or we don’t have the budget. It is a nice way to say ‘No’. But let’s be honest that it is just a waste of time and resources for both sides. But if we ask the question instead, we can circumvent a lot of pain for both parties. After the question is asked, one of two things generally happens:

Situation 1: ‘Well, we can’t promise anything…..’ or any other number of excuses arrive. This tells us if they are serious about doing business with us. It forces them to tell the truth now. This is a good thing, very quickly we know where we are at. It informs the work to be done, or it cuts down a dead lead. Any good sales dog or startup entrepreneur hates wasting time on a false positive.

Situation 2: They open up with their real needs, tells us about some internal constraints, disclose budget parameters, or that there is a lot of work to be done to get their boss to approve it. It creates forward momentum, and a collaborative approach. It builds truth and trust which leads to transactions.

Time is our most precious resource. It’s better to live in the real world and have the courage to uncover the truth early.

Worried your job might disappear? This taxi driver isn't.

Posted on September 8, 2015 by Steve Sammartino

I spend my fair share of time in taxis and Ubers in order to get to the airport. One of the topics I find interesting is to ask the drivers what they think about changes in the taxi / private driver industry. Sometimes I ask them, but I’m also finding they bring up the topic before I do. So here is the tale of 3 drivers in the same industry.

Driver 1 – A taxi driver

A driver in a taxi told me that allowing Uber on the road was a travesty given he had paid so much money for his taxi license plate. One taxi licence plate currently sells for over $200,000, but has declined in value recently. It is unfair in many ways, but technology often does that – it creates change without notice. He thought the government should protect taxi drivers and that Uber should not be allowed to operate. I agree that Uber should be regulated for safety reasons, but I also think innovations should not be stifled by them. His final statement was that he thought he’d go broke or leave the industry. He said that very soon no one will be able to make a living driving a car.

Driver 2 – An Uber & limo driver

This gentleman, who drives his car for both Uber and a limousine company, said that Uber was good to provide extra revenue between jobs. But he then went onto say that he thought Uber, on the whole was good for now, but in the next few years, self-drive cars would put every driver out of business and that he would just make as much money as he could until that next coming disruption put him out of business.

Driver 3 – An Uber & limo driver

This gentleman was enthusiastic about life. Within 10 minutes in the car, he’d really been positive about everything we were talking about regarding life and business. As usual we got onto the topic of the taxi / private car industry. He told me that Uber was really working for him, but then he mentioned something I didn’t expect. He went on to say that the biggest opportunity for drivers was just around the corner, he said; “I can’t wait for self-drive cars to arrive!” So I asked him what that excited him and this is what he told me:

“For the first time in my working life as a driver, I’ll be able to make money when I’m not in the car. I’ll buy a number of self drive cars as quick as I can. I’ll invest my time in generating business and serving loyal customers. Instead of me just driving, I’ll be at the airport every morning to great my best customers, I’ll have their favourite coffee ready, and an umbrella if it is raining. I’ll be able to build a business around the edges of the new self drive technology. I’ll be a millionaire within a year.”

Three drivers, same industry, challenges and opportunities – one very different attitude.

You should totally read my book – The Great Fragmentation.

3 reasons global adoption of bitcoin is inevitable

Posted on August 23, 2015 by Steve Sammartino

Before we start here’s a fact which is easy to forget: Currency is a form of technology.

Just like all technology, if an improved method comes along, there is a very good chance it will substitute what people where using beforehand. While it might not replace the alternatives entirely, at a minimum it will sit atop what is already being used. Another layer of technology. It is also worth remembering that new forms of currency have often arrived during a new economic age.

Commodity money such as Cowry Shells arrived with Barter Economies.
Grain Receipts during the Agricultural Era.
Ferris Coins during the Iron Age.
Bills of Exchange during the Age of Discovery.
Fiat Currency during the Industrial Revolution.

Now that we’ve entered the digital age, it is inevitable that a digital currency will emerge and gain mass adoption. But people make bitcoin sound more complicated than it really is. There are only 3 things you need to know as to why it (or a crypto currency) will eventually dominate global commerce.

Nobody controls bitcoin. Not one person, not one organisation and not one country. It is a thing. And it is open for anyone to use it, yet nobody can change it, or alter it. It is fully distributed, via its public ledger (the block chain) and this is very unique to bitcoin. It’s also anonymous.
There will never be more than 21 million bitcoins. This creates a level of scarcity and value protection that no other currency has had before. Even gold. (Gold has had a 2% extraction rate per year on average). To have enough currency, we simply divide by another decimal point.
Bitcoins can be sent to anybody, in the world, in real time and for free. Up until now, this has been impossible. All forms of currency exchange up until now always needed physical transport or to trust some third party, such as a clearing house, a credit operation, a settlement house or a bank, who also skim margin. They are all inefficient and relatively expensive. Bitcoin is peer to peer.

In short bitcoin has all the things a successful currency requires. It has scarcity, durability, divisibility, portability, acceptance and it is quickly gaining trust. Though the last two points are where the currency needs to make some gains. It might take 10 or more years, (think back to what the internet mean to you in 1995), but it is going to do for money, what the internet did for information.

But if you’re still not convinced, here is some things worth considering: Currently 5 billion of the people on earth rely solely on cash economically and 3 billion do not even have bank accounts. A little over 1 billion people have access to credit cards, and less than 1 million merchants globally accept credit cards for payment. Most of the worlds population can’t participate in the internet economically, because of the money they use. In fact, the poor of the world are the worst effected by having cash as their primary currency. Bitcoin can reduce the risks of operating in a cash world, yet have all the benefits of cash. Close to 5 billion people will be using cell phones by the end of 2015 and in the developing world you’re more likely to have a cell phone, than a toothbrush, electricity or indoor plumbing. All anyone needs to use bitcoin is that cell phone…. this tells us what the possibilities are.

Bitcoin has a serious chance of playing Industrial Leapfrog and becoming a primary form of currency around the world – lead ironically, by the developing world. I’m not saying your should go and convert your land holdings, greenbacks, or gold bars into bitcoin, but at a minimum, anyone interested in the future, should at least pay attention, and maybe even hold some.

You should totally read my book – The Great Fragmentation.

Two simple ways to grow your startup

Posted on August 16, 2015 by Steve Sammartino

The two ways to grow your startup are the same two ways to grow any business no matter how established or formative it is.

Same product sold to wider range of customers.
New products sold to the current customer base.

Either of these two options provide a simple strategy for growth. In addition they provide a succinct feedback loop of where our problems and opportunities are. They inform us of our Product – Market fit and tells us if it is right. The most important thing to remember though, is that it is pretty hard to do both at the same time. Trying both will just confuse us as to what is working and what isn’t.

You should totally read my book – The Great Fragmentation.

One thing we must learn from Tinder to create a successful app

Posted on August 6, 2015 by Steve Sammartino

The reason Tinder works is simple. It replicates human behaviour in the real world. The moment someone walks into a night club they look around at the faces of people and say to themselves, Yes, No, No ,Yes, No, No, No, No Yes, Yes. And the people they are looking at are doing the same thing back at them – assuming of course they are both looking to meet someone. But in the actual nightclub there is that awkward discovery process of trying to work out if the other party feels the same way. Which then becomes the business model of the nightclub – Sell people drinks for that few hours of the discovery process.

Tinder circumvents all of this. It takes what we do anyway, but makes it happen faster and on the couch, instead of at the bar. What tinder doesn’t do, is expect us to behave any differently. After all, the Human Operating System, or H-OS as I call it, is a very old one, 200,000 years plus since its most recent update. Which means that the best use of technology will be leveraging existing behaviour, not trying to change it.

Yet, another reminder that the digital world ‘is‘ the real world.

You should totally read my book – The Great Fragmentation.

Why petrol cars will not exist in 10 years

Posted on July 3, 2015 by Steve Sammartino

If you haven’t already realised, cars are no longer machines, but rolling computers. This also means that cars will move from being powered by fossil fuel engines to electric motors. It’s already started, and it is going to happen much more quickly than we anticipate. I’d go as far to predict that there will hardly be a petrol car on the road in 10 years. Here’s why:

When cars transition to rolling computers, the Law of Accelerating Returns applies. Innovation goes from incremental and factory-based to curve-jumping and technology-driven. You’ve probably heard of Moore’s Law – the maxim that states that computing power will double roughly every 18 months while prices halve. This maxim and many other accelerating technology laws will apply to the production of cars, laws which make the end product better and cheaper by significant degrees. The revolution which transformed smart phones, cameras, laptops, solar panels and flat screen TVs is about impact the auto industry. Let’s take the pricing example of the Tesla Electric car range:

1st car – Tesla Roadster: $109,000 (released 2006)

2nd car – Tesla Model S: $75,000 (released 2012)

3rd car – Tesla Model 3: $35,000 (projected – release due 2016)

Not only has each model been progressively cheaper, but also far better in terms of range (distance per battery charge), safety and features.

It’s the same pricing pattern we saw during the personal computing revolution. Here is where we get an entire curve jump. The Tesla model 3 is so cheap that an electric car is no longer a plaything for Silicon Valley types, but a viable new car option for everyone. This is because the switching costs get very close to zero. Why? Because the running costs of having a Tesla Electric car does not include the cost of petrol. (Tesla already have 453 free super charging stations and the cost to fully charge the battery at home is around $3). This means the average consumer can use their saved petrol money towards acquiring a brand new car without increasing their weekly expenditure. For example:

Model 3 Tesla

Cost to buy = $35,000
Avg petrol p.a. = $3,120
New funds available = 8.9% of purchase price.
Avg Cost new car finance = 6-7% unsecured interest rate.

When the Model 3 arrives, it only takes some creative financiers to change the landscape of the auto industry virtually overnight.

Want a new car at no cost?*

*Just give us your weekly petrol bill and drive away in a sexy new high tech Tesla!

It’s when this happens that we transition to an all-electric car world. The transition will be as swift as the smart phone – in a few short years, non-electric cars will be a lot like feature phones.

This is exactly how disruption happens. It’s not the product itself, but often the change in the business model around it which leaves industry incumbents blindsided. When there’s an opportunity for consumers to get into a superior product with low or no switching costs, they will always take it.

Buckle your seat belt.

Australia's top rated TV show – Do you know it?

Posted on June 29, 2015 by Steve Sammartino

This is Troye. He is the host of Australia’s top rated TV show. He gets more than a million viewers every week. He has been around for a few years now and yet I never see him featured in the Nielsen ratings. I find it curious.

Sure Troye isn’t on channel 7, 9, 10, ABC, SBS or even on Foxtel. He’s on Youtube. But tell his 4.3 million subscribers that he isn’t on TV and you’ll get a dumbfounded look. They might even tell you they already watch it in their lounge room, stream it from their phone to the family flat screen, watch it on their laptop or on any audio visual enabled device. And that’s exactly the point, what is TV? A screen in a lounge room, or something which serves up audio visual content?

The easiest way for any company to get disrupted is to define the market by traditional infrastructure instead of how needs get met.

New Book – The Great Fragmentation – out now.