Decoding the new economy

ABC Nightlife: The Spare Room Tycoon

How you can set up a world beating business from your home

Our retailers, the media and many other industries are struggling as a new generation of entrepreneurs are springing up from home and changing the way we shop, work and socialise.

Whether you’re looking at starting your own business or looking to grow an existing business, you need to understand how these free or cheap online social media, local search and cloud computing services can help you.

Join Paul Wallbank and Tony Delroy on ABC Nightlife to discuss how our work and business is changing and how you can use these powerful online social media, local search and cloud computing tools.

Aspects we’ll discuss include;

How can someone take on the big boys from their spare room?
What sort of costs are involved?
How difficult is it to setup an online business?
Are juggling home and business demands likely to cause problems?
What are the challenges of keeping the kids off your home systems?
How do you stop hackers and security risks?
How can existing businesses adapt to this new world?

If you’d like to add to the list or join the conversation with your on-air questions or comments are welcome, phone in on 1300 800 222 within Australia or +61 2 8333 1000 from outside Australia.

Tune in on your local ABC radio station or listen online at www.abc.net.au/nightlife.

You can SMS Nightlife’s talkback on 19922702, twitter @paulwallbank using the #abcnightlife hashtag or visit the Nightlife Facebook page.

So you want a freebie?

If you want something for free, you’ll need to ask nicely. Here’s some tips on making a polite request.

It’s human nature to want something for free and in these days where consumers and businesses don’t expect to pay for information and skills it often doesn’t seem unreasonable to think contributors to your project – be it an event, publication or a start up business – wouldn’t be prepared to do help for free.

That might be how it seems, but you’re asking someone to contribute their most valuable and scarce asset, their time. So what should you be doing to make it easier for someone to donate their time to your project?

What’s in it for the giver?

Your cause could be great or you could be offering some great exposure, either way you need to make the proposition compelling to those you want to do a freebie.

Keep in mind if you’re an employee of a industry group, university or private business and you’re expecting others to donate their time for free. If your organisation is such a noble enterprise, why aren’t you and your managers donating time?

Be prepared for rejection

People have a right to value their time and skills and may be offended at a request for doing something gratis. Unfortunately that’s something you’ll have to deal with as the cost of asking for a free service.

Just be thankful you aren’t asking author and scriptwriter Harlan Ellison for some work or permission to use some of his work.

Tell the truth

Respect those you’re asking to contribute by being up front about your event and the other speakers. It’s absolutely unforgivable to lie about your project when you expect people to donate their time and skills.

Be discrete

If someone agrees to participate for free, don’t blurt it to the entire world. That person has made a donation to your project and they deserve respect.

For a professional, particularly speakers and writers, that lack of discretion could cost them money for future event fees and devalue their brand. Show respect.

Don’t nickel and dime people

Again, those who agree to do something for free deserve your respect. Don’t screw them around on parking fees, taxi, or trivial charges, they’ve done you a favour and the least you can do is make it easier for them to get there and home, even if you are too darned cheap to buy them lunch or dinner.

Don’t get contractual

Even with paid contributors or speakers things can go wrong as misunderstandings happen, people get sick and volcanos disrupt airline schedules. If something goes wrong, threatening a damages suit against someone who has done you a favour is a bad look.

Expect to be stood up

While most professionals will honour their obligations, paid assignments have to take priority. As a freeloader, you have to accept your project will not have the same priority as those the contributor will get paid for.

Say thank you

After the event, show some appreciation. It’s good manners to at least send a card and maybe a small gift. For many professional writers and speakers a written testimonial or a LinkedIn recommendation is a nice way of saying thank you.

Should you be asking for a freebie?

There’s no shortage of third rate events, webinars and magazines on this Earth you have to ask if you can’t afford to pay for talent, then is your project really adding value? The fact that attendees or customers won’t pay could be an indicator that you aren’t adding value.

Similarly with the contributors, they may be free because they don’t add a great deal of value. You may want to consider a smaller project where you can pay your speakers, writers or other creatives for higher quality work.

There’s many good reasons for organisers to run free events or participants to donate their time, probably more than the excuses not to do so. Unfortunately in the Internet age, free is being abused and many creatives aren’t getting paid for their time and skills

For free to work, there has to be respect and some mutual obligation. Someone who does something for free to help your project deserves your respect and support.

Binary thinking in a digital world

Thinking you have to use one tool at the expense of others or make a choice between being wholly online or ignoring the Internet totally is a false, dangerous choice.

In a time when the retail industry, like the music and newspaper industries before it, is going through major changes thanks to the Internet there’s a tendency to think in black and white – that you’re either online or you aren’t.

This is a mistake as the choice between going online or not isn’t a black and white issue, it’s a matter of degrees.

A good example of flawed thinking was the announcement that Just Jeans would close 50 stores and move to online selling. This idea ignores that Just Jeans’ management has little online retail experience they would be better to be using an online presence to compliment their existing strengths and drive traffic into their stores.

A bricks and mortar store still needs online presence, even if there’s no intention to sell online. A shop or café needs a website that at least tells customers who they are, what they sell, where they are and when they are open.

For many businesses, online is a new channel and opportunity that complements existing channels. The web, and particularly social media tools, offer an opportunity to connect to customers, build loyalty and spread the word about the business.

Even the online tools themselves suffer this where we have arguments about whether a business should use one social media tool like Twitter, Facebook or LinkedIn. The real answer is you should have a presence in all of them, even though most businesses will find one channel is more effective than others.

Similarly an online business needs a credible physical presence such as real call centres, phone numbers and office contact details. Indeed the lack of customer service is the Achilles Heel of many online retailers.

A lack of understanding that there is little real difference between the online and physical worlds is shared by many in the community; the idea that what someone does online is not related to their reputation or legal responsibilities in the real world persists despite it being constantly proved wrong.

In the online world the answer isn’t usually one choice or another, it’s a matter of how one channel will help you more than others.

Thinking you have to use one tool at the expense of others or make a choice between being wholly online or ignoring the Internet totally is a false, dangerous choice.

A more sensible way of dealing with the online world for established retailers, or any existing business is to experiment with what works for their customers and markets.

It may well be that shutting down physical stores and moving online is the solution for some, but for many others it will make more sense to use what the online world does well to build on existing advantages.

For the retail industry, salvation is probably going to lie in providing service. It’s those managers and business owners that see qualified, helpful staff as an asset rather than a cost who will thrive in the next decade.

Why hide your address?

If you have an online address, be it a web site, social media account, Google or Facebook Place page you need to tell your customers about it.

There’s a lot of concern about businesses not having a website with estimates that between 40 and 60% of all enterprises simply don’t have a website and most aren’t using social media.

Businesses who haven’t bothered setting up a site, or at least a free Facebook or Google Places listing are missing out on customers, but even many organisations with an online presence aren’t publicising them well.

A recent walk down my local shopping strip went past nearly 200 businesses. Of them only four had a reference to their website or preferred social media platform.

Even businesses do have a website didn’t choose to display them where customers or passers by could see them.

Worse, some of the fast food chains that are running social media campaigns had no indication that checking in or liking could win a customer a deal which makes you wonder just how committed those business are to these channels.

It could be that businesses are afraid that referring to their online presence will encourage customers to move away from their physical store, if that’s the case most business owners are wrong.

Customers are expecting to find our websites even if they intend to visit our stores or hire us. Our sites – even if they are only a free page from Google or Facebook – should be telling propective customers who we are, what we do, why are we great and what hours we’re open.

Just as time is money to the typical business person, shoppers want to make sure they are going to the right place for the right product and won’t be wasting their time if they show up on a Sunday afternoon or after 6pm.

There’s no reason not to have your web page, social media addresses and other online contact details somewhere prominent where customers can see them so they can see how great you are. Should your competitors be telling their story, they are going to be getting the customers.

In a noisy, busy world we need to telling our stories both online and offline, peoples’ attention and time is too scarce to let an opportunity go by.

The web’s big weakness

How a hands-off customer model may doom many of today’s social media and web services

There’s a fundamental flaw in the way the tech industry does business, that weakness could be what ultimately kills many of today’s new media, web and social media services.

AirBnB, an online home share service, is one of the darlings of the booming Silicon Valley start up sector, having recently being valued at $1.2 billion after a successful capital raising.

Like most Web 2.0 and social media businesses, AirBnB’s advantage is in the low operating costs where customer support is left to the service’s peer review and social media communities while AirBnB pockets a commission for simply making the connection between the landlord and tenant.

The flaws in this “all care, no responsibility” model became apparent last month when a lady posted a description of her house being ransacked by an errant housesitter she found through AirBnB.

AirBnB’s management responded to the article with assurances they were helping and working with their affected customer, claims which were promptly contradicted by the original victim.

To make matters worse, certain prominent members of the Silicon Valley investment and blogging communities alluded she was lying or was “batshit crazy.” Now that other stories of bad AirBnB tenants are appearing, the view this is simply the untrustworthy word of a deranged customer affected by their first such incident is looking hollow.

Failing to deal with customer problems is not unique to AirBnB, hiding behind impenetrable layers of “support” backed up by user hostile terms and conditions is familiar to anyone who has had to deal with an online service gone wrong.

Last month Thomas Monopoly found he was locked out of his Google account and had it not been for the intervention of a senior Google employee, Thomas’ problem would probably still be stuck in an endless feedback loop.

Exactly the same problem has been encountered thousands of times by other users of web mail, social media, online auction and matchmaking sites.

Many of the people running these services retort their products are free so users get the support the support they pay for – an argument conveniently overlooking that most “free” web services are based around selling customer data – but even this does not justify delivering the basic services users have been lead to expect, regardless of what a 5,000 word user agreement states.

Today’s tech startups, and many of their big established cousins in the IT industry, have the idea that customer support is an optional extra and an expense to minimised or outsourced.

In this respect they are not too far removed from dinosaur car manufacturers or some of today’s less dynamic retailers offering little in the way of customer service or after sales support.

That way of working has died as consumers have been able to go online to vent their dissatisfaction, strangely today’s hot tech start ups seem to have missed this aspect of the revolution they have helped start.

Ignoring consumer problems is exactly what’s bringing traditional businesses unstuck in the online world. The funny thing is it might bring many of the online business undone as well.

A question of respect

Do we give our business partners the respect we’d like to receive?

All too often a discussion of business leadership descends into a series of homilies and recycled stories equating corporate warriors to ancient Chinese generals.

In a time where we’re obsessed with the shiny toys of technology, we often forget that all business is social and leadership and respect are the keys to growing a successful enterprise.

Last week’s final session of the 2011 Let’s Talk Business series was refreshingly different with David James of Sydney’s Brasserie Bread, Mike Cannon-Brookes of software company Atlassian and business mentor Chris Witt telling their stories of leading growing enterprises.

Mike and David showed how real business leadership is about entrenching values within in an organisation that fosters consistently good service and great products.

David told how Brasserie Bread treat their retail partners with generous commissions and services that encourage cross selling illustrated the key difference between smaller businesses taking the long view and the short term views taken by corporate managers.

The cross selling and commission models work well for Brasserie Bread’s retailers, the customer comes into a shop to pick up their bread order, buys a coffee while they are there and – as they discover more about the business – they become a regular.

While there’s a great difference between a bakery and software company, Mike Cannon-Brookes had a similar view about values, telling how Atlassian has the “beer test” where they ask if a prospective employee would be interesting when talking over an after work drink.

Atlassian’s main mantra though is “don’t f*** the customer”, which is notable in a business world largely dominated by the belief you give the customer the minimum you can get away with.

Both Brasserie Bread’s and Atlassian’s philosophies can be boiled down to one word: Respect.

Respecting customers, suppliers, staff and resellers is something that’s forgotten by many larger businesses obsessed with short term gains at the expense of anyone foolish or unfortunate enough to do business with them.

The current problems of big retailers can be put down to that lack of respect; for suppliers as they screwed the last cent out of their supply chains, for staff as they crudely cut numbers to achieve their performance targets and for customers who found service had become a word with little meaning in their stores.

It would be unfair to pick on the retailers though as most large organisations share that attitude of disrespecting everyone who doesn’t sit on the same floor as the CEO.

Much of these beliefs on blindly cutting costs, outsourcing service and focusing on short term KPIs came out of 1980s thinking at consulting firms and management schools.

Although the schools and consultants have updated their thinking, many business leaders are stuck in that short term model which worked well during the two decades of easy credit we’ve went through up to 2008.

Chris Witt summed this short term thinking up well with his closing comment; “Neanderthal man’s survival strategy was short term, it didn’t do him much good.”

Respecting your business relationships is the key to long term survival in these uncertain times, we need to be insuring we show the respect to our staff, supplier, customers and partners we hope they would give us.

Category: business advice

ABC Nightlife: The Spare Room Tycoon

Similar posts:

So you want a freebie?

What’s in it for the giver?

Be prepared for rejection

Tell the truth

Be discrete

Don’t nickel and dime people

Don’t get contractual

Expect to be stood up

Say thank you

Should you be asking for a freebie?

Similar posts:

Binary thinking in a digital world

Similar posts:

Why hide your address?

Similar posts:

A question of respect

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