The Time to Invest is NOW!

This article was originally published at Inside Indiana Business and can be accessed at http://www.insideindianabusiness.com/contributors.asp?id=1643

I was at the monthly meeting of the Venture Club of Indiana recently. The organizers had invited respected entrepreneurs, angel invertors and venture capitalists from around the country to comment on the Top Trends Impacting Midwest & Indiana Business in the Upcoming Year. The panelists accepted questions from the audience and seemed very open and passionate in their responses.

One topic that came up repeatedly was that a recession is a great time for buying companies. The reason is that there are lots of good ideas to pick from and valuations of many companies are relatively low when compared to a booming economy. To prove a point one of the members of the panel asked the audience how many individuals in the audience were looking for money? About 75 hands went up from the group of about 400 individuals. When asked how many people were ready to invest today only about 10 volunteers raised their hands.

I think it is human nature that when times are bad many of us hide in our “box” where it is safe until we are convinced it is safe to come out. However if you look at history a lot of winners did just the opposite and invested in times of turmoil. I read an article recently that stated 16 of the 30 companies that make up the Dow Jones Industrial Average were started during a recession or down economy. These include Procter & Gamble, Disney, Alcoa, McDonald's, General Electric and Johnson & Johnson. Some other companies that made their start when many were pulling back are Hyatt Corporation, Burger King, IHOP, FedEx, LexisNexis, CNN, and Microsoft. Why did these companies succeed? The founders knew their customers, understood their needs, understood the changing environment they were operating in, and created new products and services to meet the needs. They identified a solution and were not afraid to move forward.

In a recession the reservoir of business is drained to critical levels exposing the rocks on the bottom. Companies set in their ways with aging policies/mindsets are like ships that were able to succeed in good times but are now too bulky and crash into the rocks. This creates opportunities for nimble, flexible companies (visualize a speedboat) to take advantage of the situation and change.

In the climate today here are a few investments to consider to achieve a sustainable competitive advantage.

1. Market your existing products aggressively. As others decrease marketing and promotional spending keeping your level of spending the same or even increasing it will help you build share of voice in the marketplace. This increased share will give you an incredible advantage over your competition now and once the economy begins to grow again.


2. Innovate your product line. Has your market changed? Can you come up with a better mousetrap that will allow you to meet your customer’s needs at a lower price point.


3. Improve your production process. Can you produce more for less allowing you to lower your price and buy market share?


4. Fill a new market vacuum. How are your competitors responding to the recession? Are they pulling back creating a vacuum that you can fill?


5. Talk to your existing customers? Are they happy? What are their needs? Identify things your company can do to increase sales to them. A satisfied customer is much easier to sell than a new one.

Entrepreneurs willing to take risks with their time and/or financial resources understand that this is a time to invest rather than pull back. It is what makes them entrepreneurs. This is what separates them from all others.

In summary don’t be afraid to invest now. When the economy improves and your competition climbs out of their box you will be several steps ahead.

Until next time - all the best!

RolandB

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A Venture Idol Experience

I recently competed in a very interesting, educational and fun contest called Venture Idol. I wrote a article about the experience which was published recently in Inside Indiana Business, a daily newsletter on events of interest.

The following is the full version of the article.

Until next time - all the best!

RolandB

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A Venture Idol experience
By Roland Bydlon - Director of Marketing, ParaPRO LLC

Many of us have heard the term “elevator pitch”. You get on an elevator with Bill Gates and you proceed to explain your company’s big idea or reason for existence before he gets off in 60 seconds or less. Think you can do it? I had the opportunity recently to make that pitch in a public forum. The event was the Indiana Venture Idol competition and the audience was over 200 investors and business owners tasked with evaluating and voting for a winner.

I survived the first round and made it to the finals but unfortunately ParaPRO did not win the $10,000 grand prize. What I did “win” was renewed confidence in our message, invaluable exposure for our company and, most importantly, renewed faith in the ability of teamwork to create a result that is greater than the sum of its parts.

Life teaches us that successful businesses are built by people that are passionate about what they do. Research has found that in the best companies the owners, and individuals in sales and marketing, customer service, even the back office are able to distinctly communicate what their company does and how their job fits in with investors, customers, vendors and other employees.

Venture Idol was hosted by the Venture Club of Indiana and the Indiana Economic Development Corporation (IEDC). It was advertised as a unique, exciting competition that enables young entrepreneurial companies to compete for a $10,000 grand prize – plus the chance to showcase their innovation, market opportunity, and passion before a live audience of leading Angels, venture capitalists and entrepreneurs. Venture Idol was designed to allow Indiana companies to shine in front of a national audience.

The risk was you could also fail in front of a national audience.

As part of process for getting participants ready for the competition Bruce Kidd and the IEDC paired each entrant with a coach to initially critique the presentation on a one on one basis and then provided a forum where individuals could “dry run” their presentations in a friendly, controlled environment.

When I found out ParaPRO had been selected to compete. I wrote my 60 second and 5 minute presentations. Participants would present an expanded 5 minute presentation if they made it past the initial round. I practiced it numerous times, on my own. Even gave it to my dog, Sadie as we walked around the neighborhood. She was very appreciative. I was confident and ready.

My coach stopped by for our initial meeting. I gave my pitch. He told me I had a great speech. Too bad it was 3 minutes long. My 5 minute talk came in at about 10. My slides were confusing. My talk was missing the mark.

I went back to the drawing board simplified, rewrote, and practiced – now it was on to present to a group of 6 observers most from different backgrounds than health care.

ParaPRO is developing a product to treat head lice. A key benefit we hope to prove is that the product will kill lice and eggs. Parents will no longer have to comb out nits. I went into my story about nits and combing and time and frustration.

One of my coaches commented, after telling me I was way over the time limit, why don’t you just say that ParaPRO will eliminate nitpicking! BINGO! Here was an interesting way to summarize a benefit and get audience participation in a very short period of time. I was comfortable, had a tested message and had weathered the storm. Now I was ready.

The actual event was fun. I enjoyed having the opportunity to spread the word about our product, our company and how we were creating value in Indiana. It was a great day.

It never would have happened without a few individuals (you know who you are) that had the time and the patience to coach a passionate and nervous individual (me) to concisely tell a story that I knew very well but did not have the experience “performing”.

The event was a win for ParaPRO, a win for the attendees and a win for Indiana.

Here are my take aways from the experience:

• Develop a message
• Practice it in front of smart people
• Listen to their feedback
• Take risks, spread the word about what you do
• Have fun & enjoy the ride

The following are some selected lines from a poem I copied many years ago and have carried with me (author unknown)
To laugh is to risk appearing the fool.
To reach out is to risk involvement.
To expose feelings is to risk exposing your true self.
To try is to risk failure.
But the greatest hazard in life is to risk nothing.
The one who risks nothing, does nothing and has nothing.
Only the one who risks is free.

Roland J. Bydlon is Director of Marketing at ParaPRO LLC. ParaPRO is a privately held, specialty pharmaceutical company. Their first product, a promising new medicine for the treatment of head lice, is currently under review by the FDA. More information can be found at ParaPRO website