Welcome to Boomtown

The recent news of a major oil discovery in North Dakota has attracted an army of people from all over the U.S. to fill high-paying jobs, not just with oil companies, but across all industries; hospitality, retail, personal services, and more.  The boom is a positive sign for many amidst a period that has seen unemployment rates unwavering from levels that are extremely high.  In fact, North Dakota now boasts the nation’s lowest unemployment rate, as low as 1.5% in certain townships along the oil formation. Not only are there more jobs available, they are also paying some of the highest wages in the country. In a twist straight out of a ‘freakonomics’ book, the boom has been so rapid and powerful that it has resulted in a shortage of housing and services.

North Dakota has literally “struck oil,” but there have been a number of other strong growth sectors in the weak economy that haven’t simply been the result of luck. Sustaining business when there are less resources available merely requires a different mode of thought and the vision to understand what users will and will not prioritize. Small ideas executed in the right order can be just as effective as one big one.

For example, the beauty industry has flourished during the economic downturn, with haircutting and styling on the rise, thanks to a level of emotional attachment that brings clients into salons regardless of budget constraints. Some unemployed professionals have taken the initiative to shift their career paths, taking jobs at salons due to the demand. Offering a more competitive rate and attracting customers has helped many of these individuals thrive in their industry. Despite being a luxury service, beauticians have successfully monetized the priority many individuals place on their appearance.

It is hard to tell how long the oil boom in North Dakota will last. The size of the reserve suggests that there may be as many as 30 years of steady drilling, but a changing regulatory environment and alternative fuel sources could diminish that demand within a decade. Along with the sudden explosion of opportunity comes a great degree of uncertainty.  In other industries, such as beauty, building a sustainable business against the obstacles of the economy is a slower, more carefully planned practice. The right strategy can take chance out of the process.

The Fruits of Labor

American food culture has undergone a very positive transformation even against the increased cost of eating well. Following the 1980s and 90s, a time during which a shift was made towards processed foods that were cheaper, faster, and more abundant, an increased percentage of American society is more focused on sustainability, locavorism, and organic eating initiatives.

Suffering through those decades when demand for fresh foods was at an all-time low, many farms were forced to reduce production and staff, or shut down operations completely.  Farmers who managed to survive the down period have taken a creative entrepreneurial approach.

Diversification of the ‘farm business’ is a mandatory ingredient in the recipe for maintaining not only the business side of farm operations, but also for preserving the relationships between people and their food. While many floundered, some farmers envisioned a different approach to sustaining their businesses. Beginning with the reestablishment of the idea of the Farmer’s Market, where farms and the community come together directly, more creative ideas for saving the industry began to emerge.

In 2002, the Full Moon Coop gathered several small operations and combined them to form an alliance of farmers dedicated to addressing the issues they all faced together. The resulting partnership gave way to collaborative projects including popular ‘farm-to-table’ restaurants Farm 255 in Athens, GA and Farmburger in Atlanta, GA, which provided the farmers with steady business as well as an alternative revenue stream. Some farms such as Gizdich Farms in Watsonville, CA, chose to diversify by expanding into operations such as farm tours, public access for peach or apple picking, or cooking classes using farm fresh ingredients. Others saw a niche in the specialty foods market and began packaging and selling prepared  jams and pickles with recipes that had been handed down from generation to generation, capitalizing on demand and helping kick-start another stage of the food revolution.

Making any business work amidst a trying economic climate takes a special level of dedication and strategy.  Farms such as those that have mutually fueled and benefitted from the current food revolution have shown that creativity and a willingness to take risks and diversify can pay dividends.

Oh, The Horror!

Years after the internet gave birth to ‘viral’ marketing, the industry is experiencing the early stages of a cultural shift: the use of memes to push commercial interests. Memes, ideas or behaviors that spread from person to person in a social environment, are now being communicated mostly through the media and the internet.  The impact is significant to consumers, whether consumers are aware if it or not.

Traditionally, scary themes would make an appearance around Halloween.  And yet, now, these prominent memes no longer resurface just for Trick or Treat.  Vampires of both the horrific and harmless variety have become increasingly prevalent subject matter in books, television, and film, spawning a ‘vampire mania’ and creating numerous successful media franchises. Borders Books, although closed, had an entire section dedicated to “Teen Paranormal Romance.”  TV shows such as AMC’s The Walking Dead capitalize on society’s fascination with the idea of a zombie apocalypse. This premise is so powerful that it has fueled an entire segment of the film industry for nearly 50 years following 1968’s Night of the Living Dead.  Fear of the supernatural, the mysterious, and the macabre is an experience shared by all people, making these subjects appealing and easily relatable for audiences. Leveraging this idea, publishers and studios become wildly successful as these series garner remarkable followings.

Not every meme needs to become incredibly popular to achieve some commercial success. Meme creation and promotion is geared to many of the same goals as viral marketing, meaning that often times, a meme may only create a small but very solid following, which can constitute effective internet marketing in certain niches.

So as All Hallow’s Eve approaches, consider how effectively many businesses utilize memes in marketing. Campaigns built upon these ideas work because they are tuned to experiences that are shared by users. Make a connection with these touchstones and tap deeper into a market.  And watch out for zombies!

Which Way is Up?

The state of the advertising industry has received mixed reviews by the media. The New York Times reported from the annual conferences of the Association of National Advertisers (ANA) that speakers and audiences were worried about the ‘sluggish’ pace of the industry’s growth. Meanwhile, Goldman Sachs reports that online advertising will grow by 14% this year and 10% next year.

The prospects for digital advertising are certainly still bright. Yahoo introduced two new formats for advertisements within its popular Messenger and email applications, showing confidence in the promise of social interaction platforms. On a similar note, PricewaterhouseCoopers released findings of soaring advertising rates on social networks, claiming that the slower economy encourages a shift from traditional to digital media. The cost efficiency and high level of visibility of the digital social space are key indicators for advertisers.

Following this industry conversion, social networking today also fuels trends in traditional media. No longer is it just the early adopters engaging with digital advertising, but people from all market segments and demographics. Even traditional outlets such as television viewership are now heavily affected by the general audience’s level of exposure to interactive ads, viral video, and social media during their time online. With literally billions of clicks through these channels every hour, there is more than plenty of incentive to push advertising towards this space.

So what is the next step for advertisers? One speaker at the ANA conference suggested that uncertain times increase willingness for risk-taking. For advertisers, regardless of the medium, the challenge is to innovate more than ever before.

Serenity Now

As an entrepreneur, stress levels are typically high.  On any given day, it could be launching a new website, product, or marketing campaign; dealing with customers, reconciling financials, or hiring new employees.  Working around the clock becomes the norm to the chagrin of friends and family who are competing for a portion of that time.  The daily grind becomes a labor not a love.

There is truth in the expression that the night is darkest just before dawn.  Even the most seasoned and hardened entrepreneurs or business owners become vulnerable to the pressure.

In lieu of a spa day or a round of golf, here are a few tips for enduring long days:

1. Switch Gears: Step away from the computer.  Take a break from the office if only to run an errand, have coffee with a friend, or get in a quick workout.  It’s like hitting a reset button.

2. Ask for Help: Reach out to like minded folks or family. Don’t be afraid to share ideas, strategies, or challenges. It’s ok to ask for advice. Leverage the support system in place to find a fresh perspective.

3. Trust Your Instinct: Starting and growing a business isn’t just about strategy but also instinct.  Trust that it will guide decisions.

4. Look Ahead: Take a look at the big picture.  Instead of placing emphasis only on pressing goals, objectives, daily tasks, etc., celebrate the achievements, no matter how small.

A Bottle of Red or White?

Any entrepreneur will agree that passion is an essential ingredient for success. Winemakers are particularly passionate about the art of making wine.  The process of marketing and selling the product can be just as laborious. Fortunately for vintners, the 21st century has given them powerful tools to reach customers effectively.

Technology coupled with the Internet continues to redefine the entrepreneurial business model. The logistical challenges for growing a business through branding and marketing have been drastically mitigated by the social media revolution. The digital age has brought unlimited access to informational resources, fully open lines of communication, and a culture of user democracy where customers become vocal brand advocates.

Entrepreneurs like Gary Vaynerchuk, a bestselling author and entrepreneur who transformed a family owned wine shop into a national industry leader by harnessing the power of the internet, understand this message of opportunity. Take advertising as an example. His small shop purchased a billboard in a high visibility area for 2 months, costing $9,000. On the billboard was a coupon code, that when seen by thousands of people, generated 250 new orders. Using social media, he offered the coupon code through his twitter account, and leveraged an expansive network of followers, generating 1700 orders in 2 weeks. The cost of social media = $0. The advantages are glaring.

The wine market in the US is becoming a crowded market, with thousands of bottle options lining store shelves across the country. With sales continually on the rise, there is too large a potential windfall to risk ignoring the power of new media. Successful winemakers and merchants are reaching their customer bases through their online networks, building brand affinity and driving increased brand loyalty and sales. Without effective digital solutions, it’s a struggle to keep up with the curve.

Many would-be entrepreneurs are unsure or even afraid of using the internet, but it is unwise to think that traditional marketing methods can create the same opportunities as digital tactics. There is a lot to learn, but a little effort and some adaptation can mean a huge payoff for winemakers.

Brain Scans to Board Rooms

The role of medical practitioner is evolving from clinician/academician to business owner/entrepreneur.  Doctors are known for rapid decision making, analytical skills, and independent thinking, all important characteristics of an entrepreneur. However, the transition does require a significant shift in the mindset.  Some universities now even offer joint M.D./M.B.A. programs. For doctors already in practice, seeking guidance from external sources provides essential insights and strategies for venturing into business.

As if diagnosing and treating infectious diseases, hereditary disorders, and emergency medical issues isn’t hard enough, the ongoing changes in healthcare make practice increasingly complex for doctors.  Private practice isn’t as appealing for those looking to mitigate regulations changes, rising operating costs, and lawsuits endemic of the industry.

So why then, facing a convoluted regulatory environment and the potential for extended periods of negative salary that come with the territory of starting a business, are doctors moving towards entrepreneurism? It seems counterintuitive, but so is the fact that the weakened economy actually reduces the opportunity cost of starting a business. For many doctors, independence from hospital scheduling equates to freedom of lifestyle and, with reasonable success, increase in earnings; plenty of incentive to take the plunge.

Liabilities ring true for all businesses, but successful entrepreneurs across various industries have always proven that the willingness to invest the time and effort and make the right decisions can have major payoffs.

Ctrl+P

Publishers, once the go-to source for news, information, and editorials, have been forced to reinvent the space due to total digital domination.  The decreased demand for print copy has posed a challenge to publishers.  In February 2009, PEW Research Center Publications reported that the print losses were considerable and the digital era was making a significant impact in the minds of consumers.

A reactive shift in strategy has helped publishing houses adapt, incorporating digital distribution methods and allowing advertisers to reach greater audiences through multiple platforms. Smart implementation of new strategies has helped recover a portion of the business initially lost to the internet.  Few magazines of these could survive the loss of ad revenue if they were to eliminate print in favor of a web-only publishing model. What works for these publishers is moving timely and directed content to web media, and utilizing print to preserve income from advertisers. In this model, subscribers also have increased access to content that is updated more quickly, an increase in quality of service – a benefit to the publication’s brand.

The change is paying off. For magazines and newspapers, the rate-card-reported advertising revenue for the first six months of 2011 represented a 4% increase versus the same period in 2010. In fact, the sector has posted increases in ad revenue and pages for 5 consecutive quarters. We’re seeing a resurgence, and we’re seeing it across all markets — trade, academic, professional,” said Tina Jordan, Vice President of the Association of American Publishers in the New York Times on August 11. “In each category we’re seeing growth. The printed word is alive and well whether it takes a paper or digital delivery.”

Despite the industry’s heavy favor for digital distribution, publishing isn’t yet a sinking ship. Smart adaptation has helped plug holes in the hull, but there may still be uncertainty as to how long the dollars will continue to come in for print. Although it’s difficult to predict where publishing will be in 10 years, it’s safe to say that it will be shaped by changes in consumer behavior and digital innovation.

Give a Little, Make a Lot

In a time where inhibited growth and revenue decline are the norm, it is hard to envision a segment that manages to derive value from a trying economic climate. Social entrepreneurship – involving ventures which place emphasis on addressing a social issue over turning a profit – has actually been viewed as increasingly favorable during the recession. In stark contrast to the negativity, there is inherent value for a brand that remains focused on doing good on a local, regional, or global scale. Businesses dealing with helping the impoverished, improving a community, or preventing social delinquency are all models, along with others, that constitute the industry. Ecopreneurship also falls under this category.

Social entrepreneurs are somewhat of a misunderstood group. In order to make an impact, social enterprises require equal if not greater effort than for-profit businesses and are costly to initiate. At a minimum, social enterprises struggle to maintain a universal goal of sustainability. Some may be initially or later become profitable, but how a social business chooses to reinvest its profits varies substantially from conventional businesses.

TOMS, a footwear retailer, embodies the principles of a successful social enterprise. Blake Mycoskie, the founder, created the business, which matches every pair of shoes with a pair donated to a child in need, as a means of addressing an issue which he personally witnessed while traveling in Argentina. With a boom in popularity from media exposure over the positive change the company was enacting, the company has now sold and donated more than 1 million pairs. TOMS is profitable, but utilizes its proceeds to support its mission.

Sarvajal, a franchised business which leverages water filtration technologies to bring clean drinking water to rural areas, is an example of another type of social enterprise: a highly profit-driven company which maintains an aspiration of social change. The model offers franchisees the potential to profit hundreds of thousands of dollars annually while dramatically improving the lives of the people they serve.

There is money to be made, but profitability doesn’t influence the decisions of these businesses on the same order of magnitude as their responsibility towards their mission.  Sometimes, as in the case of Kiva, a vastly successful micro-lending website hailed by many as the ‘poster child’ for modern social enterprise, they come under great scrutiny due to common conceptions of business ethics derived from the behaviors of for-profit companies.

Building a successful business in a poor economy is a daunting endeavor. Then again, so is changing the world. With strong support to help tackle both, social entrepreneurship remains a durable and meaningful industry.

Junction CEO Shares Insights into Strategy, Impact on Blog Talk Radio

Julie Gareleck, CEO & Managing Partner, Junction Creative Solutions (Junction), appeared earlier this afternoon on The Compassionate Capitalist on Blog Talk Radio, broadcasted on the web to listeners across the country.

Julie and host Karen Rands discussed the values, philosophies, and methodologies that make Junction a leader amongst the large number of firms touting ‘consulting services.’ During the interview, Julie explained Junction’s unique value to its clients, which range from entrepreneurs and startup business to Fortune 500 companies. The pair discussed what constitutes impactful strategy and how Junction is able to effectively map out and execute on the strategies it designs to drive value and achieve results.

Rands, who herself works to bring entrepreneurs together with members of the capital community in order to gain access to capital, touted the power of expert strategic partnerships such as that which Junction offers its clients. Julie spoke to the fact that companies, large and small, often undervalue the value that the right partner can drive. She pointed out that, as Junction often tells its clients, “[business owners] don’t know what you don’t know,” and can benefit greatly from a relationship with a strategic partner.

The full interview is available for listening at http://www.blogtalkradio.com/karen-rands/2011/09/23/compassionate-capitalist-gets-creative