All posts by Brian Dorricott

4 Ways to Test a Business Angel

He’s on board. He’s interested. Should you be interested in him? Have you found a Unicorn Investor? The one who has the knowledge, experience and time enhance your business as well as money? How can you find out? Read on…

Have you ever heard that the right investor can accelerate your business through start-up to profit making? Yes, it is true, the right investor can. However they are extremely rare. If you draw a Venn diagram the intersect of those with money AND those with relevant experience is very small so, as an entrepreneur, you have choices. Find money from one source and experience from another or find one person who can do everything. Sure, when you talk to any Business Angel they’ll talk about all the time they will spend with you, the connections they have, the amazing future you’ll have together, etc. but if you don’t ask the right questions, how can you know how serious they are?  Perhaps what you need are some simple questions you can ask that will help you decide if they really are an accountant or your future advisor. Here are four you might like to think about using…

How many exits have your investments had?

Note the key word here: “exit”. You are not asking about all the investments they have made but how many they have received a return from. It is easy to invest in companies, much harder to recover that money with growth. Once you know about the successes find out how much impact their activity had on the return? Did they sit in the background and watch it happen? Or did they take on the role of CFO and drive through some amazing deals?

Can I speak to CEOs of companies you’ve invested in?

Once you have the names of people, look them up and see how their company has progressed. Call them and speak to them. See how your prospective investor has helped them – did they really introduce the company to lots of amazing contacts?

Why is he doing it?

Ask the investor why they have chosen to invest in early stage companies. It is terrifically difficult for investors to beat the stock market growth through early stage investment so what other reasons are there? When I was running an Angel Network I heard many answer to this question including “I am using it to shelter Tax”, “I retired and got fed up of golf all day. My wife complained about me moping around the house so I thought I used some of my knowledge from running a $500M division of Shell to give something back to the community.”, and the best one I heard “because it’s fun to talk about and I just got this great bonus…”.

How many hours per month do you expect to work with me?

Your expectation may well be quite different from the investor so it best to see what time they are allocating. I’ve heard of an entrepreneur who was expecting a day a week from the investor. The same investor was expecting to spend an hour a month with them!

Once you have the answers to these questions you will have a better understanding of the proposition that the Investor is selling to you. This proposition may not match the profile you need. This cuts down your list of potential finance sources. You have three options:

  1. Abandon the search for the Unicorn Investor and go for the money.
  2. Spend a large amount of time interviewing people – perhaps you will need to do this full time to be successful. Do you have that time? Or inclination?
  3. Approach an intermediary who knows a large number of investors. Their role is to match the proposition to the person’s desires more effectively and make personal introductions.

What would you do?

[Original article published on 4-Aug-15 by Brian Dorricott, Principal consultant at Meteorical]

6 Networking Secrets Revealed

[This article was originally published on www.meteorical.com]

For some people networking seems to come very easily. They enter a room and start talking to people and walk out with a bunch of useful embryonic relationships. Why? Over a period of time they have learnt how to network and they improve their performance each time they go to any event – wedding, pub, supermarket, etc. You know some people who are good at this personally and read about them all the time in the media: Tony Abott, Bill Shorten, Sir Richard Branson, Nelson Mandela, Warren Buffett to name a few.

To be brilliant you only need to be 50% as good as them, so start with some simple principles and work on improving one thing each time. To get you started, here are six ideas to start with.

  1. Prepare for the event. Find out if there are people you want to see. Have something to say for twenty seconds which describes why the person in front of your should talk to you. Think of some uncommon questions to ask. For example, asking “What is the best thing that happened to you today?” can change the flavor of the conversation. Networking is all about building relationships which means knowing more than just the business of someone else so be prepared to talk about other subjects (but be careful not to rant)!
  2. Research the events to attend. Decide which events are worth attending – generally paid are better than free. Be positive. Dress well.
  3. Take material to give people – Business Cards are enough. While I’m thinking about it, make your Business Card easy to use. Leave space (on the back perhaps) for people to write on and choose something that everyone can write on. How else will people remember what you asked them to do for you?
  4. Find out how you can help them and do so (perhaps write it on the back of their Business Card). Be attentive and focused (i.e. don’t answer your phone, check the time, look over their shoulder, etc.)
  5. Send thank you note. If they help you, acknowledge them in your social media.
  6. Keep good records. Identify benefit of the contact to you and rate them so you can decide how often to contact them later. A simple rating system may be: Introducer, Might be helpful, Unlikely to be helpful, Dangerous. Follow up with an invite to coffee or simply send a reminder email.

So there you have it… let me know how your networking goes when you try this!

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The 5th P of marketing is…

I’m sure you’ve heard of the 4 P’s of Marketing: Price, Promotion, Place, Product.  And you may have heard of the 7 P’s: Proper Prior Planning Prevents Piss Poor Performance. So if the 5th P isn’t Piss, what is it?

On the 13th March I attended the Growth Facility’s National Business Summit in Sydney. They had some good speakers who brought disparate ideas together and showed real insight. One of those was Rick Kash. Kash introduced something that I had long suspected – that we have moved from a demand led world to a supply led world. By this he meant that rather than consumers having to hunt for products to solve a problem (demanding a solution) there were many of products that could solve the problem (large supply of solutions). Further the introduction of the internet gives consumers even more power: they can research their problem, find out about multiple solutions (from strangers rather than sales people), evaluate the results and once a solution has been found search for the lowest price provider. The power has shifted from the supplier to the consumer. Or has it?

That’s where Precision Marketing (the 5th P is Precision) comes in: first establish the “Demand Landscape”, group the customer demands in pools (Demand Pools), establish the profit and size of each pool then align the company to chase those Demand Pools with the highest profit potential.

Kash uses an example of dog food. Traditionally divided into wet food, dry food, drinks, etc. this can be divided into Pools depending upon the relationship of the dog with the customer (i.e. the person with the money): dog as a child, dog as a pet, dog as a worker, etc. The size of each Pool can be determined along with the desirability of the customer to pay for the product (i.e. a customer would not buy “dog worker” food for a dog who is considered one of the family even if it was the same). Now the dog food company can precisely align their products with the customer and increase their sales (and profit margins) by targeting the most profitable pools.

So there is Precision Marketing in a nut shell. How are you going to use it to improve your sales and profitability? Can’t work it out? Give me a call or drop me an email.

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[First published on Meteorical.Com on 6-May-14.]