The NetSuds™ Report ©

The May 1, 2002 Issue:

Re-sending of this newsletter to any number of colleagues is encouraged provided you also cc: report@netsuds.com.  In return, we will invite recipients to subscribe.  Any other unauthorized re-distribution is a violation of copyright law.

Subscribe to this report by subscribing to the NetSuds Monthly Report (HTML or Text) at http://mailman.netsuds.com/  You can get the web version of this report at http://www.netsuds.com/report/2002/may.htm

Definition:  "com and .com" = Telecom, Datacom, IT or Internet

In this Issue:

        1.0  Heard on the Net
        2.0  Jobs in the "com and .com" Market
        3.0  NetSuds and MedicalSuds Calendars
        4.0  Tidbits
               4.1 NetSuds on Tour - Vertical Systems, WhereToLive.com
               4.2 KSTP's 5-Cast
               4.3 Name Your Own Price With PayPal
               4.4 BOB is Here
        5.0  Calendar of Events
        6.0  Minnesota Venture Capital Conference &
                     Bleeding Edge Technology Showcase
        7.0  Strictly Business Expo
        8.0  Twin Cities Job Market; A View from the Seeker
        9.0  Web Company Resuscitation? Too Many Patients are Dead.
        10.0 Developing a Compelling Value Proposition
        11.0 Guest Writers for this Report

1.0 Heard on the Net

1.1 People on the Move:

Please email:  people@netsuds.com to report a change in your job status if you are moving from or to a company in the "com or .com" space. 

Verispace has launched in the Twin Cities offering datacenter capabilities from 100-5000 square foot under $25/ft.²/month.  Contact Jon Schlenker at either 952.830.7413,  ron.schlenker@verispace.com or www.verispace.com

JLM Telecommunications Services is a 1-man operation offering cabling and wiring for small to medium enterprises.  This is not a typical NetSuds "company on the move" but I had to pass this information on to you since I recent had JLM (John L. McManigle) do some wiring for me at my home.  The quality and speed of the work were both amazing.  John has decades of experience and his fees are very reasonable.  Contact JLM at 952.955.1100 or jlm@spacestar.net.

Please give details on the above including any information you do not want made public.  We are very discrete.

2.0 Jobs in the "com and .com" Market

Please email:  jobs@netsuds.com to report job openings in the   "com and .com" Market.  In the body of the message, give the name of the company and a URL link to the job postings.

**    ObjectFX - http://www.objectfx.com/joblist.asp
**    ADC - http://www.adc.com/Careers/index.jsp

The web calendars for NetSuds and MedicalSuds continue to grow in popularity as more and more people use them for the definitive place to find high-tech events in the Twin Cities.  The Calendars are accessed at

http://mailman.netsuds.com/cgi-bin/calweb/calweb.pl

and are free to use.  If you want to post your events, there is a charge of $100 but you can post as many events as you like - if they are your own - for 2002.

4.0   Tidbits

5.0  Schedule of Events

You can also try our new online calendar by clicking here.

5.1 - Minnesota               

5/8-9  Minnesota Venture Capital Conference - Minneapolis
          http://www.mnvcc.com/

6/12   MedicalSuds Evening Gathering - Golden Valley Country Club
          http://www.medicalsuds.com/eg/

5.2 - Outside Minnesota

4/30    NetSuds Evening Gathering - Pleasanton, CA
           http://www.netsuds.com/sv/eg/

7/02    NetSuds Evening Gathering - Raleigh, NC
           http://www.netsuds.com/rdu/eg/

5.3 - Non-NetSuds Events

John M. Morrison Center for Entrepreneurship, house on the Minneapolis campus of the University of St. Thomas, offers a number of special outreach/lifelong learning programs with Just-In-Time information.  Visit http://www.stthomas.edu/entrep/programs for a calendar of events.

6.0  Minnesota Venture Capital Conference

The MNVCC/BETS is being held in conjunction with the Strictly Business Expo - www.strictlybusinessexpo.com being held at the same place at the same time.

7.0  Strictly Business Expo - May 8-9, 2002

8.0  Twin Cities Job Market; A View from the Seeker

By NetSudser Howard Latham, hlatham@attglobal.net

The headlines are at times conflicting, the statistics can be interpreted both positively and negatively. So to add to the confusion I thought I would share the view from an active job seeker - me. I am going to use a totally biased, subjective, and unscientific method to relate my findings.

First a little background. I am the former CEO of a technology and services company. $85MM in revenues and listed on NASDAQ.  Have strong operational experience and helped grow company from third to first, yada, yada, etc. etc. To shorten a very long story, I successfully orchestrated the sale of the company. The buyers moved the HQ to Santa Barbara, CA and since Hockey rinks were few (have two goalies at home) and starter homes were about $1.5MM, and they had their own team, we parted ways. The good news is our shareholders have been rewarded with a more then doubling of the stock price.

In the last few months I have discovered two facts. First networking is critical to the job seeker. Second, the Twin Cities market is perfect for expanding your network. I was one of those execs who spent 150% of their time (okay so mathematically impossible, but I learned from Yogi Berra or was it Yogi Bear?) doing their job. Most of our customers were outside the Twin Cities. The concept of understanding the local emerging to mid size company marketplace was foreign to me. So my local business network was zilch, zero, and non-existent. Hence over the past few months I have met with over 150 people. Venture Capitalists, Banks, Lawyers, Accountants, Other Job Seekers, Other Executives, and anyone else who might know of potential openings. 

So what I have learned (serious): 

1.   Companies are beginning to understand that cost cutting can only take them so far. Profitable (or at least cash flow positive) growth has to come. Otherwise you merely are holding ground or worse dooming your company for a slow death.

2.   Due to Number 1, sales positions are coming back in favor. Executive backgrounds with a history of strong sales growth, not just astute hack and burn operational knowledge is in favor.

3.   Money is out there for new ventures but the hoops you get to go through are akin to getting money for a new stadium, only harder.

4.   If you need outside money it will be 6 to 12 months later then you expected. Hopefully your business plan can handle it (sure it can!).

5.   Industry knowledge is still key. Jumping industries can still be done but it is much harder. Getting into the medtech sector from the outside is harder then a quadruple toe loop wearing bricks for skates.

6.   Buyers market. If the requirements are A,B,C,D,E,F; make sure you have all 6.

7.   Cultural fit is back in! I think this was lost in the down spirals of 2000 and 2001. Chemistry to your peer set, bosses, and associates are important. Not only making the decisions but how you make the decisions are looked at.

8.   Been there, done that, got the t-shirt, experience is back in vogue too.

9.   Venture folks talk to each other…a lot, in fact everyone in MN talks to everyone…a lot.

10. Professional organizations that support this market set are great. NetSuds, MedicalSuds, Collaborative, MHTA, Profits Journal, are critical to networking and understanding the market dynamics.

11. The ‘U’ and St. Thomas both have great emerging to mid market programs that can be tapped.

12.  Leaders that not only can walk on water but also freeze it so others may walk behind; seems to be a good starting requirement.

13.  The job market is getting better.

So what I have learned (not so serious): 

1.   The best underground parking in Minneapolis is 220 S 6^th Street (the Stanley Cup looking building). I swear they clean those floors more often then my kitchen floor.

2.   Check out www.surfthing.com. They have put wireless Internet networks in several downtown bars and restaurants. Armed with a wireless card in your laptop you can check your email, IM, or any other Internet thing for FREE. Don’t have a laptop? Use their computers, which are in each bar. Great productivity between all those meetings.

3.   Odd number streets lead to 394. Even number streets lead the other way.

4.   City construction is in front of you any time you are running late.

5.   Do not get your shoes shined just before an important meeting. The smell of black shoe polish fills a room faster then any perfume.

6.   Don’t have 3 weeks of Jury duty in the middle of your job search…really puts a crimp in the old networking.

7.   Casual dress is ‘in’ everywhere, except for a few attorneys.

Summary:

The market is opening. Top slots are still few but expanding. If you have to look, the Twin Cities market is a great place to look. Of course if you have or know of an executive opening ... hlatham@attglobal.net and I will send my resume FREE!

9.0  Web Company Resuscitation? Too Many Patients are Dead.

-- Kim Garretson launched LivingHome.com in 1995 as the first consumer home 'eZine.' LivingHome today is a Web content, technology and business development firm with clients in publishing, broadcasting and home products manufacturing.

10.0  Developing a Compelling Value Proposition: Start thinking beyond benefits

By NetSudser Cory Danks, cory@discoverymktg.com  

Ever wonder why businesses with cool technology such as IP Phones, ASP’s, and Broadband are going out of business? One reason is that their prospective customers do not see the value proposition. This happens either because the value proposition is weak or has been communicated poorly.

Companies looking to successfully develop or launch a new product should evaluate their value proposition. Only if a prospective customer perceives that the product will add value to their business, above and beyond the benefits, will they make a purchase. Put another way, the benefits of your product’s features have to significantly improve the economics of your customer’s overall business.

From Features to Benefits to Value

Too often companies ignore the role of value and only focus on features and benefits.  I can’t stress enough how mistaken this approach is.  Understanding your offerings benefits is necessary and important, but it is not the final step in your customer’s purchase process. 

Technology companies are infamous for not knowing the value they provide customers.  Many technology companies, especially start-ups, don’t even know the benefits their products provide.  Their brochures and web sites are packed with technical specifications, references to industry standards, and analyst predictions.  This approach may work with a few of the early adopter technophiles.  But this marketing message is very juvenile and incomplete and will not work for capturing the much larger market of main stream customers.

I suggest the following steps to help you understand your own product’s value:

• Begin with your features.  Make a list of all the features included in your offering.
• Identify the benefits of each feature.  Next to each feature, write down the benefits of each feature.  That is, how does each of the product’s features benefit or enhance the business of your customer?
• Assign a monetary value to each benefit.  Adopt a customer’s perspective, and assess a business value for each benefit.  Will the benefit have a direct or indirect impact on costs or revenue? 

By working through your product in this way, you will end up with a deeper understanding of the value your product provides.  Digging deeper you can see how different market segments value your product more, because they derive greater benefits.

Designing, Analyzing, and Communicating Value

Customers have to know what the financial impact of your offering is on their business.  You need to give them a framework to determine the value of your product or service.  A great way to do this is to build a simple back of the envelope model that compares what a customer is doing today to what would happen if your product or service was implemented.

For expensive and complex offerings, this model can be followed up with a detailed spreadsheet to capture all the proper inputs and outputs.  The components must be concrete.   If they are fuzzy and not calculable then they will be viewed as riskier returns, which have to be discounted just like you would do with an e-commerce stock in today’s market.

Here are a few simple issues to keep in mind when you design, analyze, and communicate your value:

• Price has to be lower than perceived economic value of benefits.
• The difference between price and perceived economic value of benefits is the customer’s incentive to buy.
• If the price equals the economic value, then the customer has no reason to prefer your so called value-added product.  It’s really a value-equal product.
• Develop products that provide customers with as much, if not more, value as you capture selling the product to them.

Reevaluate Your Own Products

Apply these steps to analyze your company’s offerings and you may begin to see them in a whole new light.  You may want to ask yourself - if you were a prospect, would you truly value your product?  Perhaps your answer will surprise you.  In future articles, I will explain how you can change your product’s features and pricing so that prospects have a compelling reason to buy from you.

Guest Writers for This Report

I have opened up the Monthly NetSuds Report to guest writers. If you have a passion for a topic, and you can write (at least no worse than me), send an email to me matt@netsuds.com.  You can even send copies of your work.  It needs to be on "com and .com" topics and can include entrepreneur/investor activities.  Good information from our    service providers and vendors is also welcome so long as it is not a "commercial" for any one company or individual.

We will consider both sponsored and unsponsored columnists and guest writers.

If you are aware of others who would like to receive the NetSuds Report, ask them to visit http://mailman.netsuds.com/ to subscribe or unsubscribe.

Please send your comments and feedback regarding this issue of the NetSuds Report to matt@netsuds.com.

Matt Noah

980 Lake Susan Hills Drive
Chanhassen, MN  55317

612.279.2154
fax:  425.795.2019
matt@netsuds.com

© 2000, 2001, 2002 NetSuds.com™, Inc.  All Rights Reserved.

↓↓↓↓