“A unica, realamente, razão para empreender é impactar”

“The ONLY real reason to be an entrepreneur is to create impact”

In Spanish and Portuguese, there is not only a noun for entrepreneur (empre(e)ndedor) but a verb (empre(e)nder). To empre(e)nder in Latin countries and Brazil is a verb, meaning an action needs to occur. And according to this video, that action is creating impact.

‘Vai que Da’ is a new video developed by Endeavor Brazil that tells the story of six entrepreneurs in Brazil who are using their actions and entrepreneurial abilities to create scalable change. When we talk about the ‘new-era business,’ as we have for the last several months, this is what we are talking about.

The new-era business is hybrid between a social enterprise and traditional business, a combination between old-school principles and new-school technologies. It’s designed to help reinvent the way businesses create value for society and repurpose the actions of the individuals within the company, all the while earning a profit.

And a few of the entrepreneurs from this movie are leading by example. As a sample, here are two of those with innovative offerings who are profiled in the preview:

QMagico

The QMagico dream is to live in a Brazil where everyone has access to education. The company was started by four co-founders in 2011, and recently won Brazil’s Startup World in 2012. The idea came from co-founder Thiago Feijão, who felt inspired to bring a new experience in education to Brazil.

QMagico is a blended-learning platform for K – 12 that combines both online and offline learning, which according to many studies is the optimal way for kids to learn in today’s world. It is an innovative way of teaching that leverages the power of technology to deliver students a more individualized and interactive learning experience.

+ www.qmagico.com.br

Minha Vida

Entrepreneur Daniel Wjunski started Minha Vida (My Life) in 2004 with the goal to create a community of consumers linked together in an online health and well-being portal. By delivering informative content, health services and community tools, Minha Vida has become the top health and wellness portal in Brazil.

Their mission is to democratize information about health and well-being, thus making life better for the people. They have more than 10 million registered users and the founder was selected as Entrepreneur of the Year in the Emerging category in 2011.

+ www.minhavida.com.br

The other entrepreneurs in the preview have developed different businesses to varying levels of innovation, with some being more impactful than others (Solidarium > We Do Logos). But the general theme of the series (yet to be released) is simple – to be an entrepreneur, your focus needs to be on creating an impact in your market.

The key is to start thinking about the purpose of the company and aligning the activities of the business BEFORE entering the market. Not running a business that churns out profits in whatever way it can and then starts to slice a few slivers off to donate to charity (ie. the North-American business model). Whether big or small, the business itself doesn’t need to be revolutionary or reinvent the wheel, but it should stand for something that benefits humanity if it is successfully executed.

For all-intensive purposes, the concept of what an entrepreneur SHOULD do has been lost in our (Western) society. Maybe that has something to do with the fact that we don’t have a verb in English for being an entrepreneur?

The action of being an entrepreneur should be defined and measured by the direct impact of the CORE business – and that’s the message in the ‘Vai que Da’ preview delivered by entrepreneur Horacio Poblete:

“The ONLY real reason to be an entrepreneur is to create impact”

And remember, we are not talking about charities or non-profits here, these are real businesses. They have a scalable business model, high-level teams behind them and are built using innovative business strategies. That’s what the New Era of Business is all about.

What do you think?

Have you seen any innovative businesses in your country that fit this profile?

+ Business Model Breakdown – ASTA
+ ReImagine. ReDesign. ReConnect.

Crowdfunding Strategy – Summary

Building Blocks – PLAN – the Business Model

What we can offer

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The third post about the PLAN phase of the Building Blocks for the New-Era Business revolves around strategy. In the previous posts (listed below), we took a look at tools to develop a business model and a financial model in order to help define the market and financial viability of your ventures. In this post, we will look at the basics of strategy and talk about our own Strategy Kit that we developed to facilitate strategic thinking.

+ Building Blocks for the New-Era Business

If this is the first post that you have read in regards to the new-era business, then it’s important to explain what the new-era business is all about – shaking things up. Rather than operating businesses on old-world principles that lead to the same disastrous results (on a societal level), we are focused on reinventing the way businesses are formed and building brands that matter (see post #BBTM Build Brands that Matter). The Strategy Kit is an experimental tool, created to help formulate strategies in a creative and collaborative manner.

While the business model will help you define what you want your venture to become, and the financial model will help forecast its financial viability, the strategy is the how. How do you intend to move your venture into the market? That’s the fundamental question we want to answer.

The theory that underpins our Strategy Kit is taken from the book Blue Ocean Strategy. The Blue Ocean Strategy was introduced in B-School, along with several other strategy theories. The problem with strategy theories is that like economic models, it is very difficult to prove their validity, meaning that the majority tend to fall out of favor over time (ie. Porter’s Five Forces). But the Blue Ocean Strategy, while theoretical and academic in certain ways, does take a fundamental approach to strategy that is hard to argue with – find blue oceans.

‘Blue oceans’ is a metaphor that represents uncontested market space where the competition is somewhere between minimal and non-existent. The people who developed Blue Ocean Strategy analyzed the strategies of many big companies over the course of several years and found that the most successful companies moved into uncontested ‘blue oceans’ and stayed away from the bloody and highly-competitive ‘red oceans.’

What we like about this theory is that it encourages entrepreneurs and companies to focus themselves directly on the market rather than the competition. Dictating a strategy based on the competition is a fatal practice, which is why Blue Ocean Strategy is so useful. We incorporated aspects from Blue Ocean Strategy with our own strategic principles to create the following strategy process:

1) Map your Environment

Look at your external environment and identify the most important external factors that shape it.

2) Take a Direction

Boldly move in the direction that feels right (based on a mix of factors). It’s better to put your energy into one strategic move rather than diluting yourself across many different paths.

3) Look at Scenarios

Despite your best efforts to map out the environment, take a direction and put a plan in place, there will always be unforeseen events or variables that throw the whole plan out of whack. Therefore, it is essential to conduct a scenario analysis.

Along with briefly explaining each of these principles, we also created a set of seven key questions. We developed these key questions because we think the best approach is to analyze the assumptions that underpin the strategy rather than the strategy itself. It is purely a judgment call as to whether a strategy will work or not, as one could argue that many of the best business strategies are intuitive. But someone can very quickly breakdown a strategy’s chance at effectiveness if they can take a look at the assumptions the ‘strategist’ has made.

Additionally, the key questions will also help you analyze your own strategy if you are accustomed to making your strategic decisions solo. They provide a certain level of perspective, forcing you to ask yourself questions that you might not otherwise be asking. The beauty is that if you need help with your strategy, you can easily share the answers to your questions and solicit feedback in any areas you are unsure about. We are all about collaboration : )

Overall, the Strategy Kit is an experiment. Essentially, it was created with two ideas in mind:

• that businesses need to redefine the value curve and find uncharted waters
• that the best way to analyze a strategy is by asking key questions

The other tools for the PLAN phase, the business model and the financial model, have been tested and are known to be effective. The business model canvas (developed by Alex Osterwalder) can be downloaded from our site (click here), while the financial model is available on a donation basis. The Strategy Kit, on the other hand, is completely new and experimental. You can get a copy for free (limited supply) by emailing us.

+ Building Blocks – PLAN – the Financial Model

+ Building Blocks – PLAN – the Business Model

+ Building Blocks – PLAN – the Toolkit

+ Building Blocks – TEST – demand via Crowdfunding

+ Building Blocks – SPREAD – the Social Media pipelines

Ultimately, we are hoping to send out a few of these kits over the course of the year and test their effectiveness, get feedback and talk with other entrepreneurs about the tools they use. Additionally, we hope to see some collaboration and will share any major findings via our blog. So strut your strategic stuff, email us and get a copy of the kit today!

+ Strategy Sessions : BB10 Launch
+ Strategy Study : RIM Playbook Launch

Crowdfunding Strategy – Summary

Business Model Breakdown

What we can offer

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As the crowdfunding movement continues to gain momentum worldwide, you may be starting to ask yourself if its time to start putting together your very own crowdfunding campaign. Whether you are the artsy type with a creative project you need funded, a social entrepreneur who needs some money to get started, or even a startup looking to raise some seed capital (in the US and the UK), crowdfunding gives you the opportunity to kickstart your project or idea. But raising money on a crowdfunding platform is not as simple as putting a up a brief video and letting the rest take care of itself, you need a strategy for your crowdfunding campaign. That’s why we’ve put together a five-step strategy for your first crowdfunding campaign.

Last month, I returned from a six-week trip down to South America where I researched the new crowdfunding movement (MyCrowfundingStudy.com). Throughout the six weeks I spent in Argentina and Brazil, I got a chance to chat with several people who had projects that were successfully funded on a crowdfunding platform. Through these conversations, and several others, I was able to come up with a few tips for successfully funding a crowdfunding campaign.

So here it is:

1) Build the community:

The first step, before you even launch your crowdfunding campaign, is to build the community around the idea. People need to know what you are doing, why you are doing it and understand the principle of it on a basic level before they will ‘invest,’ or donate to your project. Start a blog, create a Facebook page, have a weekly meetup, or use any other creative means to build the community around your project.

2) Make a Kick@ss video:

It can’t be stated enough how important the video is in the creation of the project. People identify with visual media much more than text or images, so creating a compelling video is essential for getting your campaign funded. The key is communicating your idea in a straightforward way and giving the video a personal touch, so that people know the people behind the project. The odds of getting fully funded increase exponentially if you create a kick@ss video.

Here is a campaign that I really liked from last year!

3) Create a Communication Plan:

Once you have the video and the content that you will communicate with your audience, the next step is to create a communication strategy. Contrary to popular belief, the work doesn’t stop once the project goes up on the platform, in fact it really only begins. During that time you need to be in communication with the donors through the platform, actively promoting the project through your networks, and leveraging social media to get people further involved. Plan on an intense month or two when you launch your crowdfunding campaign.

4) Set a Timeframe:

Most crowdfunding websites let you select the timeframe for your project. The range is generally between 15-90 days, with the norm being about 60 days. From my research, I learned that 40 days was generally accepted to be the ideal timeframe for a crowdfunding project. I believe that the shorter the better and if you have a strong community already behind you, go for a 30 day time period. The reason is that the timeframe has a big impact on donor psychology, as people will tend to either procrastinate on donating or wait until other people are doing it. A shorter time frame combined with a well-executed communication plan can push people to get involved early and make the whole process smoother.

5) Offer Unique Rewards and Incentives:

Because crowdfunding is based on donations, you must offer some sort of a reward or incentive in return. Structure your incentives in a way that people will see an increasingly greater benefit at every level of donation, and create rewards that are unique and interesting. If people see that they can become a part of a great project and get a one-of-a-kind social reward in return, they won’t be able to resist getting involved.

Overall, the best way to get your crowdfunding campaign funded is to have a project or idea that will get people excited. The combination of an exciting project and a well-executed strategy will be sure to capture the attention of your community, and allow you to raise the funds you need to move forward!

+ Building Blocks for the New-Era Business
+ New Finance: Funding the Niche

Crowdfunding Strategy – Summary

Trends and Research – Summary

Read about our collaborative Process

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A lot of the information from this blog post came from an article in the October issue of Wired. The following is a condensed version of the full story; it’s worth it to read the whole thing.

There is perhaps no company that has experienced the bumps on the road that come with building a new venture better than Tesla Motors, the company trying to reinvent the auto industry with its high-performance electric vehicles. When you look at the company’s roadmap to reach its current position, you realize those bumps are actually big potholes. Despite it all, they have persevered thanks to the ballsy maneuvering of the founder and CEO, Elon Musk, who has positioned this high-octane start-up to make the combustion engine a thing of the past.

Tesla was founded in 2004 by Mr. Musk, the former co-founder of PayPal. After he cashed out his interest in the PayPal fortune, which equated to over $200-million according to the New York Times, he wanted to build something that would change the world. He focused his energy on three areas where he believed he could make the most impact and have the most fun: cars, rockets and energy. The result was Tesla, SpaceX and Solar City, which were all funded and built using Musk’s cash and connections.

The business plan for Tesla was a simple three-step process. First, build a high-performance electric vehicle with a large price tag. Then, roll out a luxury sedan to compete with the BMWs of the world. Finally, produce an affordable electric car for the masses.

Initially, the plan looked like it was perfectly on track. In 2007, when the economy was scorching hot and the environmental movement was in full force, people were buying both Tesla’s story and their cars. The likes of George Clooney, Leonardo Dicaprio and other stars were lining up with cash in hand to be among the first to ride around in the stylish Tesla Roadster (referred to as the Signature 100), for the cool price of $109,000.

The problem for the company came after they had taken orders for the Roadster, and Musk and his fellow investors had poured in over $100 million. They realized that they had essentially been snowballed by the car’s manufacturers; originally the car was supposed to cost $65,000 to produce, but an internal audit revealed that the cost was actually $140,000. The essence of the problem was that they had to literally ship in all the parts and assemble the cars behind the company’s showroom in California. The result: a car so problem-laden it couldn’t be sold. By mid-2007 the company was in a state of disarray, which required Musk to shake up the executive team and inject another $20 million into the company.

To get back on solid financial footing, the company changed its strategy. Their creation of a lithium-ion battery, which provided the juice to get the Roadster from 0 to 60 in less than four seconds, was a landmark achievement in the auto industry. The company knew that the major car companies, Daimler, GM and Toyota, were trying to build their own fleet of electric vehicles. To get some much needed cash, they focused on trying to sell Daimler on the benefits of their battery.

In order to convince the Daimler execs their battery was the real deal, Musk took a page out of Preston Tucker’s playbook (there are some astounding similarities between the Tucker story and Tesla’s), asking his engineering team to rebuild the Tesla engine and put it into a Smart car. With just a six-week timeframe, the engineers worked around the clock to get the job done – and the Daimler execs were impressed.

By 2008, the company appeared to be on solid footing. The design problems were worked out, production cost was $95,000 and the major players of the auto industry were warming up to the company’s achievements. Just when the company looked poised to raise a major round of capital from investors, the financial tsunami hit. Despite all its progress, the company was, again, in dire financial straits.

For both Tesla and Musk, the moment of truth came in the fall of 2008. Musk had just $20-million left of his original PayPal fortune. He knew that much more was on the line than his own financial security; the birth of an electrical car revolution, which he believed the world desperately needed, hung in the balance. Despite the dire financial picture, Musk believed the company was inches away from securing a major contract with Daimler. With it all on line, the audacious entrepreneur made the bold decision to pump in his last $20-million as well as another $20-million from other investors.

The move paid off. In 2009, the company secured a $40-million contract and $50-million investment (for 10 per cent of the company) from Daimler. Next, a $465-million dollar loan was secured with the U.S. government and later a $50-million dollar investment came from Toyota.

By mid-2009, the company found themselves on solid footing once again. To bring the company a step closer to its goal of mass production, Musk arranged to purchase a sprawling 200-acre car factory in Fremont, California, off of Toyota for a bargain price of $42-million (the factory was valued at $1-billion pre-financial crisis). In 2010, the company went public on the Nasdaq and raised another $238-million.

Despite the turnaround, it is obvious that the road ahead for Tesla will include more than a few hills to climb. But no matter what happens, the Tesla story provides enough inspiration for aspiring entrepreneurs around the world to make it all worthwhile. Every entrepreneur will have to dig deep and find another gear at some point during his or her journey, but it’s all worth it in the long run when you’re building something that has the potential to electrify the world. Literally.

Elon Musk’s story is PayPal and Tesla, what’s yours? Read about our collaborative process or contact joel at lumosforbusiness dot com to see how Lumos For Business can help you shape your story.

+ Business Model Breakdown: Crowdfunding
“+ Strategy Sessions

Crowdfunding Strategy – Summary

Trends and Research – Summary

Read about our collaborative Process

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+ Pinterest : Visualize Trends

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