As a market, they don’t respond to a well-thought out strategy. No amount of research will reveal any hot buttons. And tactics that seem to be working at any point in time are really simply a matter of luck.
They’re like fingerprints, every one a unique identity. No matter their age, capitalization, ownership structure, industry, revenue, or profitability, there’s no way to build typical customer profiles. Executive titles and experience levels often don’t matter. And sometimes they do. Continue reading
The ambitions may have changed but reality hasn’t.
More first-time entrepreneurs have grander plans than those of the past. Gone is the desire to simply create a job for themselves or a small business that employs a few people. Today’s first-timers believe they can build the next Facebook, Starbucks, or Subway, and that’s good. Entrepreneurs need vision, ambition, and BHAGs. There’s nothing we can do – or should do – to temper their energy and enthusiasm. Continue reading
It used to be that an entrepreneur came up with an idea that he was passionate about, turned it into a product or service, then went out and tried to sell it. Over time, he would learn whether or not customers would buy it, but the passion kept him going through the ups and downs, twists and turns. To make the business take off required a great deal of creativity, ingenuity, and luck, which helped explain why so many of us used to call entrepreneurship a work of art. Continue reading
I love hearing that. I heard it three times this week and each time, it made me smile.
“I’m looking forward” makes it personal. It puts humanity into the equation, making the exchange less of a transaction and more of a relationship. It becomes more about them and less about us, and we know that if we nail it, they’ll come back for more. Look forward to more. Continue reading
Talking with a former student of mine yesterday who is involved with a startup got me thinking: can something as simple as a sales cycle cause failure for a startup? Continue reading
The following is a re-post of my January 21, 2011 column for Crain’s Chicago Business’ Enterprise City blog.
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I recently sat down with Eric Hsueh, who along with partners Erikka Wang and Jon Cotax, founded AKIRA, the high-fashion retail chain, in 2002.
Then in their mid-20s, the three friends from the University of Illinois at Urbana-Champaign were inspired by Erikka’s vision for a women’s clothing boutique. With no outside capital and their collective life savings on the line, Eric remembers that, “My biggest fear was disgrace: can we pay our bills and not embarrass ourselves? I knew we would not fail but at the same time, I didn’t know.”
It was that open-eyed ignorance and blind ambition that drove them to open the first store in Bucktown, on Chicago’s Northwest Side. For six months, it was just the three of them with no additional employees. By 2008, they had six stores. In 2009, they added three more and a robust online presence. Last year, four additional Akira locations opened, including their first suburban ones at Woodfield Mall in Schaumburg and Old Orchard Mall in Skokie.
Seven new stores amidst the “Great Recession”? With no access to outside capital? To fuel that growth, Akira relied on strong inventory turnover and a loyal customer base for ever-important cash flows, and also benefited from a soft real estate market.
“Two [stores] were planned and two were low-risk, good real estate deals. In terms of expansion, you have to be prepared but also opportunistic. We leveraged our reputation which we worked hard to build, positioning ourselves as a desired tenant, Our reputation is important with customers, but it’s also important on the vendor side: we keep our promises and pay bills on time.”
Today, the 13 brick-and-mortar stores, the online store, and its corporate headquarters support 224 employees, 95 of which are full-time. In eight years, Akira has put its stamp on Chicago’s fashion scene and become a force in the retail apparel marketplace.
Eric believes that the company’s success has been driven by a combination of its unrelenting focus on sales (“selling, selling, selling, selling…and then more selling”), a dedication to customer service, a talent to manage cash flows, and its unusual culture.
He says he can’t go to bed at night unless every store manager texts him and business partner, Jon, with that day’s sales. Store managers are encouraged to communicate with customers via text and Facebook messages to build long-term relationships and take orders when customers aren’t in the store.
When the recession hit, “we didn’t just wake up and cut costs; [we have been] looking for ways to reduce expenses since day one. And in retail, your biggest risk is inventory so you have to be able to turn it fast.”
Eric describes Akira’s culture as “nuts, disorganized, fanatical. But we have an insanely high level of trust among all of us, a lot of passion, a lot of creativity, a lot of customer-centric stuff. It works and it works well.”
Akira’s suburban expansion was the subject of a Crain’s story and news video earlier this week. Check them out for even more insights on the challenges ahead for this fashion-forward company:
The following is a re-post of my January 14, 2011 column for Crain’s Chicago Business’ Enterprise City blog.
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Lyons Consulting Group (LyonsCG) was bootstrapped in 2003 by Rich Lyons and Dave Barr, with a focus on information technology consulting. The firm doubled in 2010, with revenue approaching $10 million as it completed a shift toward e-commerce development. It expects to double again this year, aggressively hiring IT and sales talent for its Chicago headquarters and a new office in Rockford.
Rich Lyons, president, has attributes common to many successful entrepreneurs: focus, tenacity, opportunity recognition and goal-orientation.
His hero is Eric Liddell, the runner in the movie “Chariots of Fire.” Like Liddell, who was knocked down in a race but still won, Rich believes in having the “determination to get up after being knocked down, using your God-given talents to maximize your potential. No one can stop us to reach our limits except ourselves. I love that challenge as a business owner and employer.”
It’s that determination that helped LyonsCG survive the recession, during which it experienced a typical story – from steady growth to a sudden need for cuts. “To let someone go strictly because of market conditions – not because of their performance – is among the worst things I’ve had to do,” Rich explains.
As a typical IT consulting firm that was project-based, LyonsCG “never had any recurring revenue,” Rich said. “We were on the expense side, and our kinds of projects got cut” in late 2008 and 2009.
To survive and become more resilient, the company re-invented its business model to focus on e-commerce development. “We saw a burgeoning market with brands that weren’t being sold online. We saw an opportunity to shift to the revenue side of the conversation where the CEO or director of marketing is saying, ‘I need to generate revenue and I need to do it now.’” Today, the company builds e-commerce technology for clients like Warner Bros., Maui Jim sunglasses and Oneida.
Because of the recurring revenue stream, “this is the first year with over $1 million of revenue we know we’ll book,” says Rich. Add to that the trend of firms increasingly investing in digital commerce, and the company sees tremendous promise. “The paradigm is shifting and broadening. Companies want to do pop-up stores, allow customers to find products on phones and use their e-commerce platform as their point-of-sale system.”
The company’s goal is to reach $50 million in sales by 2016 through organic growth, acquisitions and new market expansion. Rich knows that such growth brings challenges – scaling delivery to keep up with sales, finding experienced people and maintaining the firm’s culture, which he describes as “collaborative, collegial and customer-focused.”
In addition to changing its business model, the company has become totally focused on customers, putting its money where its proverbial mouth is. “We unconditionally guarantee our work. If our customer isn’t satisfied, we give them their money back.”
To lower the likelihood of that happening, LyonsCG looks for “people who are committed to the customer experience (and) the long-term relationships we build with customers,” says Rich, explaining a major driver behind the recurring revenue model, as well as a major driver of his own joy.
“I love the fact that we have a collaborative culture where we might argue vehemently but leave with an agreement of what is best for the customer.”