One of the challenges I most consistently face in sales is how to address a customer’s preconceived notions about a product. On a very basic level, this materializes in the following way:

  • Me: Have you ever considered trying X?
  • Customer: X? Oh no, not X. I’ve heard X doesn’t do Y.
  • Me:   Well,  actually…
  • Customer: *not listening*

This happens every single day. 10 minutes on Wikipedia and suddenly you’re an expert. When I first began in sales this was incredibly frustrating and difficult to deal with. I would  nod and smile as I listened to the customer’s reasoning, but inside I would be screaming, “You have no idea what you’re talking about! Why won’t you just listen to me you dolt?!?” In case you we’rent sure, actually telling your customer this is not a great way to close a sale. This is:

1. Identify the source

Listening to your customer is a basic component to the sales process regardless, but make sure you turn your ears up a notch when they’re telling you what they “know”. With a little bit of practice you can determine not only what their opinion is, but also how and why they think it. If you’re going to have any chance at all to change their mind, you have to understand where they’re coming from. For example; if a customer’s preconceived notion stems from something granny taught them as she tucked them in at night,  you wouldn’t want to say “X doesn’t do Y? Whoever told you that is completely off their rocker!” Never insult someone’s sweet old grandmother, no matter how wrong she is.

2. Agree with them

Yes, agree with them. You don’t want to completely validate their misinformation, but at least concede something. If you’ve been selling the same stuff for any length of time, you’ve probably heard your customer’s argument before. Let them know that their are others who share their same feelings. The goal here is to a) take the customer off the defensive and b) provide a data point for change.

3. Educate

So now you know where the customer is coming from and they’re feeling pretty good about themselves. Now its your time to shine. Flex your product knowledge, offering a clear and convincing argument in favor of what you’re selling. The approach here varies wildly based on industry, target market, etc., so I’ll leave that for another day. The important part is that you’ve created a tiny window of opportunity to bring the customer into your way of thinking. This window is always fleeting though so make it count!

Conclusion

A responsible customer will almost always have their own opinions about your product–don’t be disheartened. Changing a person’s mind is an incredibly difficult thing to do, but never impossible. Although customer’s are naturally wary of what a salesman tells them, you still have one key advantage. You’re the expert. As long as you’re careful not to step on too many toes, you’ll be collecting your commission in no time.

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Yes, the established music industry is in a total state of flux. Startups certainly aren’t immune to the madness either. Dalton Caldwell, founder of now defunct imeem, says startups should stay the hell away (my words, not his). Then you have the CEO of MOG, David Hyman, who retorts that the proof is in the pudding and it can be done. Now Caldwell got burnt and Hyman hasn’t (yet), so one might erroneously conclude that their different opinions are just a result of their different experiences. This may be somewhat true. But really I think they’re both right.

You could, but you really shouldn’t

The fact is they really aren’t saying anything contradictory to each other. They both recognize its an  incredibly complex industry thats difficult for newcomers to navigate. Oh but you’re an expert? Because your CD/mp3/Vinyl/whatever collection is bigger than all your friends’? Yea, thats probably not going to help you deal with the business development departments at the Big 4 labels. Its just plain hard, okay? Both Dalton and David really drive home one key point; its a numbers game. If you’re selling downloads of label music, you’re going to have slim margins (lots of hands in lots of pockets). If you’re selling tools for musicians, you’re going to have slim conversions (they’re not called starving artists for nothing). To be profitable in this space, you must walk a very fine line when it comes to your financials.

So what?

So just do it. There has been a growing sentiment among startup folks these past few months that doing anything music related is just plain suicide. Maybe. The music is an oligopoly; controlling power rests with Universal, Sony, EMI, and Warner Records. The startup’s job is to poke and prod, trying to expose their weaknesses. Once a significant enough weakness is exposed and leveraged in one of the labels, the rest will ultimately follow suit. But without the nuisance of innovation, the Big 4 machine will not and cannot change its course.

IANAL, but the US legal system is a mess. Thanks to the common law system we’ve inherited from Her Majesty’s Kingdom, US laws are so convoluted you have to be a lawyer to know whats going on half the time (and even then you’re only slightly better off). And to top it all off, our trial courts are so clogged up it could be 5+ years before you even see a judge. Sorry folks, you have to be a criminal to reap the full benefits of the sixth amendment.

Insert the Federal Arbitration Act. Passed in 1925, this legislation offers you and I an alternative to the outrageous costs and obstacles involved with formal litigation–arbitration. Theres two types of arbitration. Mandatory–many states have laws that force small claims into arbitration because of the clogged court system–and then theres Voluntary–no matter what the dispute is if you want to arbitrate, go for it. For those who are unfamiliar with ADR, arbitration is basically a streamlined form of a standard trial. Two parties have a disagreement (plaintiff and defendant), present their cases (hearing and evidence), and an arbitrator(judge) issues the ruling.

Now with mandatory arbitration, this process is almost indistinguishable from a formal trial–theres just not a jury. Voluntary arbitration, on the other hand, is a whole new ballgame. As long as you have two people pissed off at each other and a third party to arbitrate, you’re good to go. Rules of law and evidence? If you want. Or how about a detailed explanation of the reasoning for a ruling? If you pay the arbitrator appropriately. The point is that its actually a very informal process with very formal implications. The arbitrator’s ruling is (9 times out of 10) binding in a court of law.

And businesses love it. Its private, quick, and relatively cheap [insert lame joke]. A few $1k should do the trick.

So what can be improved? Last time I checked, most bootstrapped startups don’t exactly write checks with 3 zeros in them without taking a hit. Thats potentially months of runway they’re losing just to arbitrate. Less runway equals less time to find a repeatable and scalable business model. Not a good thing.

The solution? Crowdsource it (but of course!). In most cases of voluntary arbitration, the arbitrator is basically just an industry expert who likes to help people solve their differences. And guess what? There just so happens to be a place stocked full of these experts online–LinkedIn.

The arbitration  community

Here’s how the whole thing works. On one side, you have a community of arbitrators who sign up to hear disputes. These people connect their LinkedIn profiles to the site so everyone knows what industry they’re in. Then on the other side of the equation, you have users who come to the site with an unsettled dispute. Lets look at an example.

The tale of Jack and Jill

Jack and Jill are two great friends in college who decide to start a business together. They’re so excited about their super revolutionary idea and start building immediately. Its an overnight smashing success (because this happens so very often). There’s money on the table now and things start to get a little tense; Jack and Jill (shockingly) never formalized their ownership agreement.

To decide who owns what, the pair turn to online arbitration. They submit a claim (which legally locks you into arbitration) and a list of recommended arbitrators is generated. To promote fairness, each party ranks the arbitrators and once again an algorithm is used to determine the final man for the job. Jack and Jill submit all of their documents/evidence to the website. Emails, business plans, etc etc. The arbitrator reviews everything and reaches his fair and unbiased verdict. Problem solved and no feelings hurt–Jack and Jill forge on in harmony.

Does this sound like a legitimate business to you? Or do you think it’d be just one big legal nightmare? I’d love to hear any and all thoughts.

In any conversation about “hubs” that involves startups, there is but one undisputed champion. Silicon Valley. Its got the technological roots (microwaves, etc), education system (Stanford, etc), and lots of capital (rich people love places like California). Sure you have your New York Citys and Denvers, but SV in unrivaled on just about all of those criteria (For arguments sake, of course. I have my own reservations about the SV gospel).

Here’s how this logic works. Silicon Valley had the technical background and military research to first get the furnace burning. Then you start throwing top-notch engineering grads from Stanford to keep the innovation moving everything further. Finally you throw in huge investments to sustain the natural growth and voila–tech city.

One aspect of this model that I’ve yet to see explored in depth, however, is the echo effect. There’s often talk about SV being an echo chamber that distorts peoples perceptions of reality (“What do you mean you don’t check in every time you buy a coffee?!”).  But what I’m referring to is related to the educational component.

You see, where I go to school is also hub–albeit a drastically different one. Its a distinguished and expensive University thats heavily recruited from. This is a good thing for many students. The problem is, this University is surrounded by remote farming communities. And among these farms are large industrial farming equipment manufacturers (the aforementioned recruiters). While Silicon Valley has Google, the Central Mid-West has Caterpillar.

And since a University and its surrounding community of corporations has a vested interest in one another, they are often closely related. Here in Peoria, Illinois, it is commonplace to apply business teachings to industrial manufacturing and diesel engineering. This is what those who teach the classes know best. Learning about international business? Well lets talk about the budding heavy-equipment manufacturing industry of China.

On the other hand at Stanford you’re lectured by titans of the startup world. Sergey Brin may give a guest presentation one day, and then the next you go sit in Steve Blanks class. The education–regardless of subject–is deeply woven into a technological context, and thus best prepares any new graduate to take on those similar challenges. Instead of Chinese manufacturing, perhaps Indian computer science is more appropriate.

I admit that much of what I’ve written about Stanford is speculative. It is merely an extrapolation of what I’ve personally experienced in my own education. But the implications of all of this can be far-reaching for both graduating students such as myself, and prospective students of the future. If you want to start a business selling rib eye steak, do you think its wise to spend four years of education surrounded by vegetarians?

Theres no denying that online retail is huge. When you think of the web titans that survived the dot com era–I’m looking at you Amazon and eBay–they’re predominantly retailers. We’re talking about probably a $100 billion market at this point. With that being said, the potential for growth is even greater. Milo, the hyper-local retail search engine, recently did a study that concluded less than a whopping 5% of retail sales is conducted online. 5%. That figure alone is pretty interesting, but the best part is how they drilled down on individual industries. The result? A pretty clear picture of the kinds of goods that aren’t suited (yet) for online sale. For example, Food and Beverage online sales are at a measly 0.2%.

Okay that may be obvious, but that got me thinking about other goods that haven’t quite translated to the interwebs yet.

Sunglasses.

As a social case study, sunglasses are a very interesting product. From aviators, to oakleys, to the giant wrap arounds 80 year old men wear, there’s a pair for everyone. Think back to when you last bought some. You go to the store, throw on the first pair that looks good, and do that ridiculous little jig trying to see yourself in the mirror. And there lies the problem. According to market researcher Mintel,only 27% of luxury accessories (RayBans, Maui Jim’s, etc.) are purchased online. The people want a way to try on sunglasses…so give it to them.

Scenario 1: The social way

One way to achieve this would be to do a transparent hook in with Facebook. Theres at least 500 million faces on there dying to try on a pair of sunglasses. First, you connect through the Graph API to grab a users pictures. Allow them to select the best straight on shot for best results. Then, do a little image magic and superimpose their choice of sunglasses on their face. There ya have it. Bonus points for creating a viral loop and posting to Facebook what pair they picked.

Scenario 2: The over-engineered way (for fun).

I think motion tracking with webcams is pretty cool, so how about we apply it to this use case. Have customers shop through sunglasses as before, but one click on the “Try ’em on” button and activate their webcam. Superimpose the sunglasses on their face. Bonus points on this one for doing some fancy facial recognition and allowing the customer to check out different angles with them on.

From here the possibilities are endless. I know personally I never buy sunglasses without someone there to tell me when I look stupid or not. This could be duplicated with more Facebook integration as well.

So Oakley, what are you waiting for?

Well, I have to hand it to you guys. You programmers and your secret handshakes, ridiculous jargon, and inside jokes–it had me fooled for quite some time.

At long last, I’ve peeked behind the curtain. I half expected to find the large green head of an omnipotent being. What I found was a whole lot of logic and some clever little workarounds. It turns out programming is accessible to us mere mortals after all. Classes? A bunch of data variables and functions. Objects? A single instance of a Class. Making stuff happen? Pass the method on the object. Rinse and repeat.
I’ve got a long ways to go. I’ve only written a few simple programs in…java. But its a start. And for me, its an awesome start. Full blown web development is the goal so I’ve got Ant running, and the incredible Play! framework ready to go. One Hello World down, one future in development to go.

WARNING: I’m a sleazy, immoral, dishonest “business guy”.

My world centers around marketing copy, focus groups, cash flow etc etc. Basically everything thats not necessary in building a startup (in the web app sense). You know, that thing that requires coding and design. Obviously business types have a place in startups when a product exists, but what about during those slightly earlier stages? (Spencer Fry, a well known non-techie in tech, wrote the definitive guide on what to do as a non-programmer in a startup with a product…btw).
If you spend any amount of time around tech startups, you’ve probably came across hoards of “biz dev” guys looking for a technical co-founder (HINT: a lot of them are just looking for some monkey programmer to shove in a closet). Some of us have some base knowledge of coding. For others, java is a funny name for coffee, pythons are scary as shit, and lisp isn’t necessarily something to brag about.
 
Regardless, we simply don’t program. So how can a non-techie start a startup?
 

 
Hustle.
 
In the words of Jay-Z, “it ain’t where you been, but where you’re bout to go (on top of the world)”. A startup hustle isn’t just about world domination though. Unlike in a typical 9-5, work at startups often don’t have any kind of direction. It hasn’t been done 1000x before by another employee, and there certainly isn’t a manual. Guess what though? You have to JFDI and GTD.
 
If you can’t commit code, you damn well better be able to hustle. So your idea is going to revolutionize an industry, eh? And you’re…searching for someone else to build it for you (spending countless hours while you’re at it)? You’re not a hustler.
 
Don’t get me wrong, finding a good co-founder is astronomically important and there’s plenty of people smarter than I who will tell you that. But what pains me is the “if only I had a finished product, I’d be rich” mentality many business folk possess. Damn you semicolons of death standing between me and my millions!
 

Yea, I’ve actually thought that at one point in time.

 

It’s idiotic.

 

Do you know what’s not idiotic? Actually doing something productive. I’m not talking about the standard feasibility analysis stuff (market research, crunching numbers, talking to potential customers). Thats important and all, however, how about…

 

*GASP*

 

 

Building something. For real.

 

Wait, didn’t I just make a ridiculously sweeping statement that biz dev specialists don’t program? Yes. But if you got the hustle, you’ll make it happen anyways. Real code may look like goobledygook, but theres hope for you yet. It has gotten way too easy to ship something for you to be doing nothing.

 

My personal weapon of choice: Drupal, a very powerful CMS that can do everything and more. So you want to create a new marketplace for buyers and sellers? Theres a module for that. How about integrating Facebook’s OpenGraph API? Theres a module for that too. The point is, one can create a web service that actually does something without writing a single line of code. It certainly isn’t the easiest thing to do, but at least you can create your minimum viable product (however ugly it may be).

 

You’re not a pitiful, helpless, business douche. You’re a hustler.

 

UP NEXT – Life after the streets (Or, I have a product and I’m still not rich)