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tv   Your Business  MSNBC  March 21, 2015 2:30am-3:01am PDT

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. their initial business idea flopped. so how did they pivot to a winning concept? and they take us step by step through the process of getting your product onto the market. coming up next on "your business." small businesses are revitalizing the economy. american express is proud to
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help. hi everyone. i'm j.j. ramberg. welcome to "your business" where we give you information and add vees to help your small business grow. every spring tech sbre-- in the nick of time they pivoted and ended upturning it into a business that's disrupting the job hunting industry. ♪ >> when you guys were last here we were getting ready to go to
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south by and we entered that competition. we did well. >> two years ago when we first met tom, he was polishing the push for yabbly. >> and i am going to go right now. i'm tom from yabbli. >> he and his partner had just been invited to the south by southwest pitch contest. and they were riding in the fast track. >> right now we have the team from yabbly. and they are changing the way people shop for products. >> i'm tom from yabbly. >> fast forward two years and a lot has changed. >> the current name of the company is poachable. and it wasn't always named that.
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>> from yabbly to poachable. the name wasn't just the start. they actually changed the entire company. they shifted from providing a service and product for consumers to job hunters. >> it allows people to explore new opportunities without revealing their identity. >> shifting because huge change but it's not as random as it seems because the core function connecting people with common interests is still the focus. >> a pivot is some fundamental assumption about the business is wrong, but we're going to repurpose some of the work we've done and try something kind of slightly different, but still has a lot of the dna of the original idea. >> tom and ian knew they had to
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pivot. >> we can't change now. clearly we're onto something. look, we're on tv right? it delayed the realization that the initial business was flawed. >> when they returned to austin they faced flaws to ugly that they considered shutting down the company. >> your job is to move onto something that is going to grow. >> tom says his advisors were generous with their tough love. >> like he's not afraid to tell you, the baby's kind of ugly. he's been awesome. >> that is what you owe to your vefs investors, employees and yourself. >> ryan managing director of seattle based fell swoop also worked with tom to help him find a way to meet the demands of the marketplace. >> with a start up it's all
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about trying to find the market fit. >> with their funding all butt gone tom and ian were running on empty. >> there were some dark times. we were trying to sell the company. we were getting close but we weren't getting any offers. we knew the clock was ticking down. the original idea was not working. >> finally they made a deal to sell the original business and take what they could get for their investors and employees. >> we were plan wlag people call a soft landing, which is kind of a mercy killing for a start-up. we said look it's july 4th weekend, we're not going to close a deal until july 25th. let's use this time to throw a couple hail mary's. >> that's when they hit on the idea of poachable. to everyone's surprise it got traction even before they completed the website. >> it was a single landed page and a form that any high school
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kid could build honestly. and the matching algorithm at the time was me sitting at my desk trying to match members and companies. >> ryan noticed it and right away he went from being an advisor to becoming a client. >> when this poachable thing came out, i was like this is something we need. it's a couple hundred bucks to post a job and we get people that are on the open market. it's been hugely valuable for us. >> tom took a long hard look at numbers on poachable and reevaluated the sell. >> we bought the domain and the next thing you know people started signing up. it was almost instant. it was crazy. i remember sitting in this office saying to the team well this has never happened before. >> his back against the wall he kept calm, made the right rational decisions and was able to spot the opportunity when
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there was one and got excited about it. >> today, seven months in and with a new round of investment they now have companies actively recruiting. >> with previous businesses we felt like we were pushing a string. we would do everything we can and nothing would happen. with this one we feel like the wind is at our backs and now our job is to not screw up this opportunity. many successful small businesses started out as one thing and then pivots into something more successful. mike is the ceo of profit first professionals, a group of accountants bookkeepers and coaches that drive profitability globally. he is author of the book "profit first." and jennifer hill is an
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attorney. she is also the coworker of 60 60vocab. pivot started out as something entirely different the it was a shopping app. and you have to have a good team. you cannot pivot unless you have a team that can pivot with you. >> absolutely. and you have to give them direction of where you want to go. i tell you where there's a flaw to pivot. pivot is such a popular term right now. and people are interpreting it as adjusting to what the customer wants. but then we neglect our own values and we get out of alignment. i suggest don't pivot. align. stay true to what your organization wants to achieve. i've seen people pivot into businesses that they hate and
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doesn't serve what they intended to do. >> we might have started here and now we've moved here because we found this was working. >> that's actually what groupon did. they started out as a platform for advocacy campaigns and one of the products was a daily deal site. and they realizes that was actually where the momentum was. they had a team that was really good at activating big groups of people. >> you're not changing the entire company. you're still useing some of the resources, the back end, the values. >> that is the greatest lesson. pivoting doesn't mean turning 180 degrees or 360. it's usually a 5% change. they adjusted a little bit and a little bit and found what clicked and then they pushed
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forward. pick the small things to exploit and grow on. >> and give the original products time for product market fit. pivoting is not just constantly iterateing for the sake of iterating. >> great guys. i loved that piece. it was fun to follow those guys over the last couple of years. once you've developed an app for your small business it is far from the last step. you then need to get it accepted into apple's ap store. here are five tips to keep in mind in order to avoid being reject rejected. one, detail. one of the main reasons apple rejects an app is because of a lack after information. be sure to include instructions on how it works, what it's designed for and how it's supposed to be used. two, bugs. double and triple check your
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software. if apple encounters any hiccups, there's a high probability you'll be rejected. three, rates. make sure your app complies with the proper rules. apple will automatically reject a test ap.p. and five meta data. the screen shot should be relevant or you'll most likely be turned down. here's something we hear from our viewers all the time. i've got a great product but how do i bring it to market? there are a lot of steps. we followed the makers of a product called locker looks and they walked us through the ups and downs 069 ss of the process. right at the start these two
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dallas mothers joanne and christie sterling didn't even seem like players. >> this was the first time we ever did this. it was a completely new adventure for us. it was born out of our own experience with our daughters. >> they were going through sixth grade and wanted to decorate their locker. and there wasn't a lot of cute stuff out there. christie went to work and came up with some concepts and here we are. >> their daughters loved these home made school locker decorations and so did their friends. >> on the first day of school the phone started ringing from other parents saying where did you get that stuff? and we realized there's a market for this. >> their first step was to get some help 37. they met with marketing consultant kyle priest. >> we worked on the tenants of the business and the goals and
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then put those into a plan structure. i think sometimes people make the mistake of frabing a template and completing it to create a business plan and they forget the human side of things and the realities of structuring a plan that they can live with. it was immediately time for them to get into sales mode. >> their next move was to head to the dallas market center. >> if you create a product and you want to take it to market there's several ways. but the age-old way of bringing it to a trade show and finding someone to help you sell it that's what goes on here ten times a year. >> when we came to the dallas market, we were overwhelmed by how much stuff was here. >> we were pretty clueless but the advice that we did get was try to find a manufacturing represent or a sales represent that can distribute your products and that has relationships with retailers. >> as they walked through the trade show they found a manufacturer's represent listed
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on the fourth floor. without an appointment, they took their chances and asked to speak to the owner of dallas based diverse marketing greg harden. >> they came up to my door and asked to speak with me. they said they had a great idea on this little box they were carrying. we had some initial meetings and we had a retailer come in that we have good relationships with hastings out of amarillo. and showed it to her and she says i think it's just great . i want to do an order. i said we haven't made it yet. she said i still want to give you an order. >> the next step was manufacturing the products. they contacted ray sun, a chinese manufacturing broker and the owner of china advantage. >> we are the bridge between idea and the product. so if we turn the idea to real production, the first stage is you have to give us a design.
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you have to give us a toy. >> we had to decide how much of the product we wanted to get made. then he put his team together to source all the components of the product and came back with a price. >> the factories in china were all lined up while tremendous tailers were waiting to receive their orders. the next step select a fulfillment company. that's where they landed in serious trouble. >> unfortunately it was a complete disaster and they shipped about 80% of our product incorrectly in that first year. it was a very tough year for us. >> those shipping errors nearly cost them the business. they got back in the game when they reconnected with another shipper. craig clay of total fulfillment. >> your customers could receive the wrong merchandise. they might not receive it in a
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timely manner. the way they receive it may just look like it's thrown in a box and it's damaged by the time it gets to you. >> with their new fulfillment service in place, joanne and christie landed on their first goal. their products now hang on retail store racks across the country. and the two are ready for their next move. did you know that companies in nearly any industry from home contractors to florists can build subscriptions into their business models? if you think you're in a sector where it you think it will not work, our next guest is going to tell you how to do it. john is the founder of the value builder system where he advises business owners on how to increase the value of their company. he is also author of the new book "the automatic customer
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creating a subscription business in any industry." there's always been wine of the month and beer of the month and fruit of the month. i get that. but a home contractor? what kind of subscription service do you have there? >> has sell free homes is a good example of that a washington, d.c. based company. they go in and on a subscription basis will manage your home for you, fix the lights change the pool filter. they do it on a subscription basis so they get recurring revenue. >> how do they price it out? how do they figure out the right amount to charge someone? presumably they might make money on someone one month and lose money another month. >> well yeah. you've got to look at the lifetime value of a customer. you're going to price out your
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services based on how much it's going to cost over the lifetime of their subscription with you. >> what is the downside? >> you know what? in some industries your employees may be the biggest impediment. they may be clinging to the old industry way of doing business. sometimes your employees don't necessarily see that. you've got to paint the picture for them of how it's going to benefit them. how much easier of a business it's going to be a run based on knowing how many customers you've got coming up. >> give me some examples of ones that i would not expect. >> you mentioned flowers in the beginning. flowers is a tough business to be in. you've got inventory that rots. it's difficult to get customers other than mother's day and valentine's day. there's a company called h bloom that's created a subscription
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business for flowers. their niche is going after hotels and spas. >> give me another one. >> amc theaters has launched something where you could watch movie subscriptions. they say, great, we'll allow you to come in as many times superintendent in aas you want in a month. you've got to pay a fee to do that. netflix is one that we all know. the all you can eat model. there's nine examples in the book. that's one of them. new master's academy where they teach on a subscription basis how to do art, how to do water color painting sculpture and so forth. you pay your $30 a month and you get access to these tutorials.
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and learn how to do art as a hobby. >> give me just a couple best practices when you are thinking about having a subscription model. >> sure. when you're thinking about your subscription model i think you want to think about 10 x versus 10%. nobody's going to buy your service just to save 10%. for example, netflix, you could make an argument that netflix is a 10 x value proposition. you go back to new master's academy, the art class folks, the comparative set is having to go to a college and spend 600 or $800 on a live class. that's one of the biggest things to think through your subscription, how to make it ten times better than buying a
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a la cart. >> next we answer your questions on preventing and discussing employ theft. and is there such a thing as a pricing formula? . american express for travel and entertainment worldwide. just show them this - the american express card. don't leave home without it! and someday, i may even use it on the moon. it's a marvelous thing! oh! haha! so you can replace plane tickets, traveler's cheques, a lost card. really? that worked? american express' timeless safety and security are now available on apple pay. the next evolution of membership is here.
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>> this week's selfie comes from erin blakely. get out your phone, take a selfie of yourself and your business and send it to us at or tweet it to us. please don't forget to use the hashtag your biz selfie. time to answer some questions. the first one is about getting more customers in the door. >> we're seeing a pretty significant drop-off in traffic in craft stores all over america. my question would be what can we do as independent retailers or as an organization to reestablish that traffic pattern for all of our stores?
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>> retailers have been doing a lot of neat stuff to get people in the door. with craft stores i think there's a lot of opportunity. >> there's a fundamental lesson you have to understand about human behavior. we as a customer see the same things online. it's human nature to go the easiest path. the way to stand out is by always being different. don't try to be better. it doesn't make it stand out in the customer's mind. they'll still follow the easier path. you have to be radically different. home depo is an example. you can come and build a birdhouse at the store. and then you're inside buying stuff. they do small events. do something that can't be acquired online and customers will come. >> independent retailers also need to be aware of that more customers are looking online because they want to go offline. they want to be able to find
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you. it's as simple as getting a high rank in a google search. pinterest is a fantastic way for a business to differentiate itself. it can be a really compelling way for people to know about you and want to make that evident to go to your store. >> there's a big opportunity for people to build a community. give people information they want to know about, here's a new craft that you can build and have events. >> and get out and participate with them. the advantage a store has is real face to facetime. exploit that. don't just have events at your store. >> and also make sure that your customers understand that it is that face to face connection that makes things so important. you have an ability to have your employees be a differentiateor. >> we obviously are still having some issues with shift or shrinkage. i'm looking for ways and tips on how to have better security
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measures in our store without alienating our customers. >> the first thing of course is to train your employees to spot things so they understand where products are traditionally stolen from how do you walk around the floor and make customers feel nor comfortable. but particularly understand that something as simple as just going up to a customer and saying may i help you, talking about a product, asking are you ready to pay for that yet, can be really simple ways to diffuse the situation. >> you should know this one. remember that bagel shop we went to? mirrors are a great way to prevent theft. the reason we don't want to see ourselves committing a bad behavior. >> also people can see you from this way and that way, right? >> yep. he wrote about a study where there was a candy jar or pot put out during halloween and there
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was a sign that said please take one. they put handfuls. they put a mirror behind it and kids started taking one. put mirrors in your store. >> great idea. finally, we have a question about pricing. >> i design and import new products for the craft and event industries. they're totally innovative, never been seen before. and i have no idea how to price them. i've heard that there was a formula out there, but no one has been able pinpoint that formula . >> how do you figure something out like this when you don't have good comps? >> profit is everything. the most critical person in existence about the price is you, the owner. if you're selling direct to consumer, a two times mark up to four times mark up is ideal. if you go to distribution, a two
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times mark up on your costs. >> if you wanted to be seen as high end you've got to charge more. if you want it to be more mass, you've got to charge less. >> exactly. does she understand who her customer is and what else are they buying in they're that range? it's the product itself but also the sales process. think about how you're actually going to get this product into the hand of the consumer and why it's so valuable for them to get it. >> there are some comps that she could look at. >> there are indeed. even if it's a newly innovative product, what else does it compare to. look further afield if it's crafts. is it another luxury item. is it something for the family. look for other things that those people might buy and that can be a helpful guide. >> see dollars spent as appreciation points spent. when a customer gives you $100
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they give you 100 appreciation points. sometimes as you're pointing to luxury products higher price, people put more value into it. >> so good to see both of you guys. thank you both for stopping by. >> thank you. >> remember that we answer your questions every week here on the show. so if you have one for our experts, send us an e-mail. the address is yourbusiness dzhokhar tsarnaev -- you'll find some web exclusive content to help your business grow. you can find us on twitter and facebook and instagram too. next week when we got the call from this capacitiery er cancer survivor business owner we brought in the make over expert who is
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volunteered their help. >> it's bringing tears to my eyes. it looks so good. it really does. this is a part of the store i do so horrible at because i don't understand it. and it's overwhelming. and this looks so amazing. >> next week find out what this business owner needs to do to keep her doors open. until then i'm j.j. ramberg. and remember we make your business our business. american express for travel and entertainment worldwide. just show them this - the american express card. don't leave home without it! and someday, i may even use it on the moon. it's a marvelous thing! oh! haha! so you can replace plane tickets, traveler's cheques, a lost card. really? that worked?
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american express' timeless safety and security are now available on apple pay. the next evolution of membership is here. happy friday to you. i don't own a car that can park itself but there are a lot of cars that can park themselves. take your hands off the wheel, your feet off the pedals. in some cases you take your hands off the wheel but leave your feet on the pedals. you somehow indicate to the car there is a parking spot you would like your car to get itself into. and shazam the car parks itself. the first technology was in 2003. toyota had a compact car that did this only in japan. but lexus was first in the u.s.


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