If there’s one thing 2020 hasn’t screwed up, it’s entrepreneurship.

It’s been an interesting year…

2020 began full of hope and promise. But the optimism that accompanied the new decade quickly faded as the world came face to face with a series of health, political, economic, and social challenges the likes which we have not seen in generations.

Times are tough. And for many, instincts are telling them to hunker down and wait out the storm. But there’s another option. One that allows you to take control of a seemingly uncontrollable situation.

Entrepreneurship.

For anyone out there that’s ever wanted to run their own business, now is the perfect time to start. Entrepreneurship brings hope, creates opportunity, insulates you from uncertainty, and like a desert cactus, thrives in harshest of conditions. Conditions like the ones we’re facing today.

Timing plays a major role in launching any successful business. Let’s explore the reasons why now is the time to start yours.

Entrepreneurship Creates Hope

One of the most difficult parts of 2020 has been the endless stream of negativity. News cycles and social media feeds have been dominated by stories of death and despair. And the more we consume these stories, the more we internalize these feelings, to the point where we feel like everything is hopeless.

But entrepreneurs can inoculate themselves from this negativity. Because entrepreneurship is all about hope. It’s taking a leap of faith, and trusting in yourself and those around you to create something out of nothing. By starting your own business, you’re taking control of your own circumstances and destiny.

Launching a business is exciting! And this excitement will bleed into every corner of your life, to the point where no amount of new negativity can keep you down. Just by taking that first step towards building your new business, you’ll be able to drastically change the way you feel about the world today.

Entrepreneurship Gives You Control

One of the biggest stories of the pandemic has been unemployment. In the first five weeks following country-wide shutdowns (March 21 — April 25), the U.S. experienced 30.3 million new unemployment claims. That’s roughly 20% of the entire working population in the country.

A recent study conducted by Yelp shows an astonishing 60% of restaurants on the platform closing permanently due to losses suffered over the course of COVID-19 shutdowns. Meaning that these high employment numbers are here to stay, and the job market is going to be incredibly competitive for years to come.

That is, unless you’re an entrepreneur.

Entrepreneurs bypass the competitive job markets, focusing instead on hiring themselves. No resumes. No job boards. No interviews. Just a belief in their own ability to bring value to the world, and in the process, create an income stream for themselves and their families.

Entrepreneurship Is the Ultimate Way to Upskill

Even before the pandemic, “upskilling” was one of the hottest buzz words in business.

Upskilling is the process of learning new tools and technologies that allow you to succeed in evolving industries. And there is no better way to upskill than by becoming an entrepreneur.

At its core, being an entrepreneur means being willing and able to learn. Every day you run a business is a new day where you are asked to do a task or solve a problem you’ve never experienced before. Accounting, product development, sales, customer discovery, public speaking, networking, and so much more — choosing to become an entrepreneur is choosing to add many different tools to your toolbox, all at lightning-fast speeds.

Even if you start a business that ultimately fails, as an entrepreneur you still end up succeeding, because you walk away with an entirely new set of skills. Skills you can put towards your next business, or skills that will make you a much more attractive hire if you choose to return to work as an employee for someone else.

Global Disruptions Mean Global Opportunity

Have you ever considered the amount of force it takes to change human behavior?

While we all want to believe that we are in total control over our decisions, we are actually driven largely by habits and routines. Ones that, once set, are incredibly difficult to change. For most of us, it takes a massive outside force — the proverbial “wake-up call” — to change our behavior.

Right now, billions of consumers across the globe are experiencing a wake-up call. Whether it’s related to their health, their safety, their values, their beliefs, their families, or their way of life, the global disruptions caused by COVID-19 means nearly every individual on the face of the planet is being forced to change their behavior.

And these changes are creating massive new opportunities for entrepreneurs.

Zoom was a niche videoconferencing software company with 10 million daily global users in December of 2019. By April of 2020, they had over 300 million people using the platform every single day. Instacart lost $300 million in 2019. But in April alone, the company posted a profit of $10 million thanks to a 500% order growth. And it’s not just major tech platforms that are experiencing record sales in the midst of this pandemic. Shopify, an ecommerce platform and payment provider that allows small businesses to run online stores, is seeing record growth as well, with a 62% increase in new virtual storefronts opened by entrepreneurs between March 13 and April 24.

All of this to say that new opportunities are plentiful. The changes in consumer habits and shopping patterns brought on by COVID-19 mean that there are plenty of chances for new businesses to insert themselves into the lives of hundreds, thousands, or even millions of people across the globe. You just need to get out there and started.

Why Now is the Perfect Time to Start Your Business

Every generation has their defining moment. A period where all the pieces came together, and amazing innovations and progress are made.

If you look back at history, these defining moments tend to follow periods of great darkness. The Roaring 20’s followed the Great War. The rise of the Middle Class and the American Dream came only after the end of WWII. The transcontinental railroad, John D. Rockefeller’s Standard Oil, and the great industrial boom of the United States all exploded on the heels of the Civil War. And even Sir Isaac Newton’s famous witnessing of the apple falling from the tree took place while he was quarantining at home during an outbreak of the bubonic plague.

Though times may be tough right now, history has proven again and again that the light at the end of this tunnel will shine brighter than we could ever possibly imagine. Which is why now is the perfect time to invest in yourself, pursue those entrepreneurial dreams, and start your business.

Thanks for reading! Before you go, if you’d like to follow along as I start my new business, a community for the growing non alcoholic beer, wine, and sprits community, be sure to visit YOURS.

Why leaders must consider more than just productivity before bringing employees back to the office.

A last-minute, all-team Zoom could only mean one thing: our CEO had big news.

After abandoning our small Chicago office at the start of the COVID-19 crisis, our company had been working 100% remote for nearly three straight months. During this time, we had yet to have an impromptu all-hands meeting, and imaginations were running wild as everyone hopped on to the sound of Zoom’s familiar ding.

“After speaking with building management, I’ve learned that we’ll be cleared to return to the office as soon as June 15.”

Though we were all sitting miles apart, you feel the air leave the virtual room. Sure, there had been plenty of jokes like “see you in 2021” and talk of our “new normal” — but this was the first serious piece of news related to working in the office since we went remote back in March.

While everyone is ready for some normalcy, the news came as a shock. And what came next was even more surprising.

People got emotional. Really emotional. You could hear the tightness in their chest and elevated heart rate as they shared concerns, voices laced with the same emotions you’d find in a heartbroken teenager or fired employee: surprise, confusion, concern, and of course, anger.

In our CEO’s defense, he hadn’t even confirmed we were returning on June 15 — just that it was possible. He had done what he has always done so well, favoring honesty and transparency with the team, openly sharing information so that we could make an educated business decision.

But returning to the office is not a normal business decision. It’s an emotional one, too.

If the COVID-19 crisis took place 10 years ago, there would be no debate. Business had to be done in the office, and employees would need to balance the reward of a paycheck with the risk of venturing out as an unseen virus still walked the streets.

But in 2020, that’s all changed. Technology has not only made remote work possible — for many, it’s made it fun and productive, too. Which is why it’s not surprising that even before the global pandemic hit, 48% of U.S. workers reported working remotely at least once-per-week.

We’ve proven remote work can work. So, is returning to the office worth the hassle and the risk?

For many, the answer is no. Twitter CEO Jack Dorsey has already announced that most employees will be able to work from home indefinitely. And he’s not alone. Facebook, Shopify, Coinbase, and hundreds of other companies have already adopted either a long-term or permanent remote policy.

But why would these companies abandon their multimillion-dollar corporate campuses? Simple — returning prematurely would have an emotional toll on their teams that far outweighs the benefits of being under the same roof.

Leaders must consider this emotional cost before making the decision to bring employees back to the office. And to better understand if and when your business should return, start by asking yourself these 5 key questions:

1. Do you understand the risk that extends beyond your employees?

For many employees, the risk of return may have nothing to do with their own health. Perhaps they have a newborn at home. Maybe they care for an elderly relative. Or live with someone who is immunocompromised.

Don’t assume that if your employees seem healthy, returning doesn’t still pose a risk.

2. Is there a clear business need to be in the office?

Do your employees require special equipment, run in-person gatherings, or need to perform specific manual tasks in the office?

If the answer is no, and you cannot articulate why you want them back (other than personal preference), it’ll be incredibly difficult to convince them to brave public transit and an office full of people anytime soon.

3. Can you provide your employees with a safe space to work?

For many leaders, the dream of getting back to “normal” includes the thought of walking through an office full of smiling faces. But have you considered the cost and logistics of providing a mask for all those smiles? Are you prepared with hand sanitizing stations, deep cleaning crews, rotating break room schedules, and plexiglass partitions?

Before even considering bringing people back to the office, it’s your responsibility to make it a safe place to work.

4. Have you evaluated the cost-savings of adopting a permanent remote policy?

After labor costs, rent and the associated overhead of maintaining an office is one of the largest ongoing expenses a business can have. Have you considered how adopting an ongoing remote work policy could grow your bottom line?

The massive capital saved from reducing or eliminating your office space could be reinvested into the next stage of growth for your business.

5. Have you considered other options, such as flexible hours, days, or a “remote-first” policy?

If business needs dictate returning to the office, or you’re just not ready to go 100% remote, consider a hybrid model.

Perhaps your institute a “remote-first” policy, where employees are free to work from home on any day they are not needed for an in-person meeting or function. Or maybe adopt a rotating remote work schedule, with flexible days that allow employees to come in with less frequency, and when they do, be surrounded by fewer people than normal.

As the nation emerges from the COVID-19 pandemic, returning to any sort of normal is going to be messy and fraught with emotions. And these emotions do not get checked at the door when your employees show up for work. As a leader, you must understand the broad range of implications your decision to return has on the health and happiness of your team.

Now more than ever, it’s time to lead with empathy. Only then will we be able to forge a path forward.

Returning to the Office Isn’t Just a Business Decision. It’s an Emotional One, Too. was originally published in The Startup on Medium, where people are continuing the conversation by highlighting and responding to this story.

What Hollywood Can’t Seem to Get Right

Have you ever compared your life to the movies?

You’re not alone. In fact, I’d venture a guess that from time to time most of us imagine we’re the star in our very own blockbuster. Making friends, fighting enemies, falling in love, and tackling challenges on a journey towards a better future.

While there’s certainly no harm in the occasional Hollywood daydream, it can cause some real trouble when you start to blend your real life with life on the silver screen. Because for all the things that the movies do right, there is one area where they have a terrible track record in mirroring reality:

Human Progress.

Even if it has what might otherwise be a plausible plot, television and movies are terrible are scripting human progress. And I think they know it too. Watching most shows, it feels as if writers intentionally craft the physical, emotional, and intellectual development of their characters in a way that would never possibly happen in the real world.

Why? It’s simple…

Real human progress is boring.

Hollywood lives off the big and bold. The overnight success. The life-changing phone call. The two-minute montage that takes the athlete from poverty to pro. I know you’re familiar, because it happens in nearly every movie and TV show you watch.

But real life isn’t so simple. It’s not determined by a handful of big, bold decisions you make. No, real life is determined by the minutia. The little things you do day-in and day-out that bring you that much closer to the life you want to live.

In the real world, big change doesn’t come in the span of scene. It comes 1% at a time.

1% Makes All the Difference

Author James Clear writes about the power of 1% in his bestseller, Atomic Habits.

In his book, Clear tells the story of the rise of the British cycling dynasty. For over a century, Great Britain had been a decidedly mediocre cycling organization. They had never won a Tour de France, and had won but a single Olympic gold medal since 1908. They were so bad that top bike manufactures literally refused to sell them equipment, out of fear it would give their brand a bad name.

But that all changed in 2003 when Great Britain Cycling hired a new Performance Director by the name of Dave Brailsford.

From day one, Brailsford adopted a philosophy he referred to as “the aggregation of marginal gains.” Simply put, he did not believe in big, grandiose overhauls, adjustments, or goals. He did not march into that first team meeting and state the Great Britain was going to sweep the next Olympics. He simply asked his team where can we make small improvements day by day?

Brailsford focused on the micro 1% improvements. They redesigned the team’s bike seats to make them a little more comfortable. They got new heated bike shorts to help their muscles relax. They found more aerodynamic fabric for their uniforms, and started rubbing alcohol on their tires for better grip. They even painted the inside of the team trailer white so that they could ensure no spec of dust or dirt would go unnoticed, potentially leading to mechanical issues during a race.

Little by little, Brailsford adopted slight changes and variations to the British cycling program. And when it came time for the team to compete at the 2008 Olympic Games, the results of these small incremental changes were astonishing.

Great Britain won 60% of the gold medals available at that year’s Olympics. And four years later at the 2012 games in London, they set 7 world records and 9 Olympic records.

In less than a decade, Great Britain went from the joke of cycling to a dynasty that could not be beat. In the movie of this story, this tale would be told with a big, bold character monologue and a subsequent 3 to 5-minute montage.

But in real life? It was 1%…day-by-day, year-by-year.

1% Makes Bad Movies But Amazing Individuals

The reason Hollywood shuns 1% improvements is not only because they’re boring. It’s because you can barely even notice them.

Passengers aboard a 737 flight from Los Angeles to New York would never notice if their flight path was off by a percent or two. But if the nose of the plane moved but a few feet at takeoff, that New York bound flight might very well be landing in Washington D.C. four hours later.

Subtle change at first, massive difference in the end.

If you’re still struggling to visualize how 1% can make such a difference, take a look at the following graph:

As you can see, after one year of daily 1% improvements, you’ll finish nearly 38 times better than when you started. But if you decline 1% each day, you’ll end up close to zero.

It’s the magic of compound interest at play…only making itself visible after time. And it’s how the blogger committing to a 1% increase on their daily output will be churning out an extra 3 blogs/week by the end of the year. How a commitment to saving just 1% of your paycheck can lead to hundreds or even thousands of dollars saved a year. And how 1% improvements in your morning jog can take you from couch to 5K in a matter of a few months.

“Continuous improvement is better than delayed perfection” — Mark Twain

To some, 1% may feel like a rounding error. But it’s all that stands between you and greatness. It’s this 1% that pushes me forward every day as I build my community dedicated to non-alcoholic drink and mocktail recipes, even when some days it feels like no progress is being made at all.

Though it might not make for a great Hollywood plot, always remember that in the movie of your life, it’s best to give 1% a starring role.

The one question every entrepreneur needs to be asking.

Are you default alive or default dead?

It was a question running through my mind over and over again. As I sat on a Zoom listening to partners at several major VC firms discuss the state of capital during these unprecedented times - many of whom were suggesting that founders switch their mindset regarding runway and burn rate from months to years - Default Alive and Default Dead were the phrases dancing through my head.

As someone that once realized they were Default Dead after it was too late, I know all too well that this concept is not nearly as widely known or adopted as it should be. But as entrepreneurs everywhere face challenges the likes of which they have never seen, now more than ever they need to start each morning by asking themselves a simple question…

Is my business Default Alive or Default Dead?

Dead on Arrival

The idea for Default Alive v. Default Dead comes from Paul Graham, legendary entrepreneur, investor, writer, and founder of the prestigious startup incubator Y Combinator.

As Graham explains in his 2015 essay, the first question he asks of almost every startup founder he meets is simple, “Are you Default Alive or Default Dead?” Specifically, Graham wants to know – based on current expenses, growth rate, and cash on hand – if the business is on the right trajectory to reach profitability before running out of money.

If yes, then that business is Default Alive. If no, they are Default Dead.

There are two reasons why Graham is so interested in the Default Alive/Default Dead question. One, for founders that know the answer to the question (only about half ever do), it’s a clear indication that they take monitoring progress seriously, which is vital for success. And two, the subsequent conversation Graham has with said founder changes dramatically based on whether they are Default Alive or Default Dead.

With the former, they can talk about new ideas and growth strategies. With the latter, the conversation immediately turns to how that business can avoid certain death.

Calculating Life and Death

To calculate whether your business is Default Alive or Default Dead, you need four metrics:

· Current Expenses
· Current Revenue
· Current Growth Rate
· Cash on Hand

Let’s say your business currently makes $100 per week in revenue, is growing at 5% per week, and has $500 in fixed weekly expenses. At this rate, it will take you 34 weeks to reach profitability, with Week 34 bringing in approximately $500.34 in revenue, just above your $500 in weekly expenses.

Now, this is where cash on hand is so important. During these 34 weeks to reach profitability, you’ll spend $17,000 on fixed expenses, while only making $8,506 in revenue. This leaves a deficit of $8,494.

Meaning that at your current rate, if you have less than $8,494 in the bank, you’ll run out of cash before reaching profitability. Your business is Default Dead.

Conversely, if your business has $8,494 or more left in the bank, you will cross the profitability mark before running out of money. You are Default Alive.

Now, for those that aren’t big fans of math or spreadsheets, Trevor Blackwell has created this easy-to-use calculator to help you figure out just how much cash on hand you need to be considered Default Alive or Default Dead.

Why Knowing Your Vitals is So Important

“What gets measured gets managed.” – Peter Drucker

The consensus across nearly every industry right now is that things are going to get more difficult. Accessing capital will be more difficult. Making sales will be more difficult. Building a supply chain will be more difficult. When the economy is disrupted on a truly global scale, it means that everyone will pay the price in one area or another.

This is why it’s more important than ever to understand if you’re Default Alive or Default Dead. Because when the stakes are high, the slightest shift in one vital metric or another could ultimately mean the difference between life or death for your startup.

For example, let’s say two similar businesses both have roughly $10,000 in monthly expenses, $2,500 in monthly revenue, and $70,000 cash on hand. The only difference is their current growth rate: one is growing at 10%, and the other at 9%.

If you run the numbers through the nifty calculator, you’ll see that the first business will reach profitability in 1.2 years, and will burn $68k of its cash on hand to get there. It’s tight, but this business is Default Alive.

Business number two? It will reach profitability in 1.3 years, and will need $75k to sustain itself until then. With only $70k cash on hand, this business won’t make it…it’s Default Dead.

One business alive. One business dead. All because of a measly 1%.

And if your business is not keeping an eye on that 1%, you won’t even realize that death is around the corner until it too late.

Staying Alive During Uncertain Times

With the current state of the world, there is no doubt that your business vitals will be changing frequently. That’s ok, and quite honestly, expected. But what’s not ok is using this frequent change as an excuse to not keep track of your metrics.

The only way to navigate the long road ahead is to keep an eye on the map before you miss your turn. And the best way to accomplish this is by starting each day with a simple question:

Am I Default Alive or Default Dead?

Are You Default Alive or Default Dead? was originally published in The Startup on Medium, where people are continuing the conversation by highlighting and responding to this story.

Going digital shouldn’t mean leaving sponsor dollars on the table

Of all the industries hit hardest by the coronavirus pandemic, live events ranks right up there with restaurants, bars, movies theaters, and concert venues. If people are forbidden from coming together, how can you possibly host a successful event?

Well, many event producers are trying to recreate the magic of live events through digital conferences, webinars, and virtual trade shows. But, there’s one huge problem with this transition…

Sponsors

For those unfamiliar with the live event space, sponsorship dollars frequently make up a huge percentage of the profit margins on events. In fact, as someone that spent many years running their own sponsorship management agency, and currently teaches thousands of students how to write successful sponsorship proposals, I know first-hand how many event producers both big and small that not only want sponsorship dollars to survive — they need sponsorship dollars to survive.

And unfortunately, many sponsors are not jumping to digital.

But thankfully, this can be fixed. In fact, digital sponsorships can be as effective, if not more effective, as a live event sponsorship. You just need to know how to offer value to your sponsors in a virtual environment.

To help everyone out there struggling to get their newly-digital events off the ground, I am here to share some proven tips I’ve used in my own business to find big sponsor deals for webinars and virtual events.

The Golden Rule of Sponsorships Still Applies

The first step in finding sponsors for your digital events and webinars is to remember the golden rule of sponsorships: Connect their brand with your audience.

It’s that simple. At the end of the day, an event sponsorship is nothing more than a bridge connecting one side (your audience) with another side (your sponsors). And your job as an event creator is to make sure that this is a bridge both sides want to cross.

How? Through Audience Matching.

Too many people paint sponsorships with a big, broad brush. Their idea of finding sponsor leads is a matter of looking towards the biggest companies in town and sending them a generic sponsor letter. “Company X has a ton of money…” they say, “so of course they’ll want to sponsor our event!”

But here’s the problem: sponsorships aren’t charity. Even if you’re looking for sponsors for a charity event, you still need to show your potential sponsors that you can provide real, tangible value to their organization.

Audience Matching is the process of matching your event’s audience with a potential sponsor’s audience. It’s about finding businesses that make sense for your digital event. Specifically, it’s about finding businesses that want to connect with the group of people you’re bringing together.

No matter how much money “Company X” may have, if their target customer base is 18 to 25-year-old females, and you’re hosting a virtual event targeting retired men 65 years or older, no amount of salesmanship in the world can ever convince them that sponsoring your event is a good idea. There is zero return on investment (ROI) for them, because the audiences do not match.

Instead, you need to utilize Audience Matching to narrow down your list of potential sponsors, and then focus on this targeted group of companies. Ones you know will want to cross that bridge and reach your audience. By employing this Audience Matching technique, you will be able to supercharge your sponsorship efforts, and drastically reduce the time you spend chasing leads that don’t make sense (no matter how big their marketing and sponsorship budget may be).

Audience Matching allows you to tell your sponsor prospects that a sponsorship of your digital event is an invitation to have a direct conversation with their potential customers. To be put in a virtual room with 100, 1,000, or even 10,000 of their prospects, and engage with them directly.

And if you’ve done your homework, and correctly matched their audience with yours, they’ll be signing up faster than you can put a sponsorship proposal into their hands.

Offer Your Sponsors Unique Digital Assets

Once you understand the brands you’re going to target for your virtual event through Audience Matching, it’s time to figure out what sponsorship assets you can offer them. In order to identify the assets you should offer as part of your virtual event sponsorship program, there are two basic questions you need to ask yourself:

1. What are the sponsor’s objectives?

2. What can I offer them to help achieve these objectives?

It’s really that simple. What are they looking to achieve, and how do I get them there? How can it be that easy? Well, legendary leadership coach Zig Ziglar said it best:

“To get what you want, help others get what they want.”

By creating a sponsor-first mentality, and working hard to create a program that works for them (and not a self-serving program that works for you), you are all but guaranteed to create a program so valuable, sponsors will be clamoring to get on board with your virtual event or webinar.

So, what are some common sponsor objectives? According to sponsorship data firm IEG, here are the most commonly identified objectives based on a survey with sponsorship decision makers:

1. Brand Awareness
2. Showcasing Community and Social Responsibility
3. Generating Unique Content
4. Generating Leads/ Stimulating Sales
5. Obtaining Audience Data

Now, many people may think that they are extremely limited in what they can offer sponsors as part of their digital event. But it just takes a little creativity and ingenuity. Let’s go objective-by-objective and think of some ways to help our sponsors achieve these goals virtually:

Brand Awareness

· Place sponsor logos on all pre-event emails, website, and registration page
· Place sponsor logos on all live event slide decks
· Have all virtual speakers make mention of the sponsors during each presentation
· Invite reps from sponsor company to give presentations themselves (showcasing their brand in the process)
· Include sponsor brands in social media activity

Showcasing Community and Social Responsibility

· Have the event chair send out an email to all guests thanking sponsors and reminding attendees that the event would not be possible without them
· Create a charitable component to your event and have it branded with one or more of your sponsors

Generating Content

· Release sponsor-branded articles leading up to your event
· Allow sponsors to share special video content with your network
· Release press releases announcing your partnership with sponsors
· Offer sponsor-exclusive email newsletters to your attendee list
· Conduct virtual sponsor interviews
· Allow sponsors the rights to use of your event’s marks, images, and other content on their own channels

Generating Leads/Stimulating Sales

· At signup ask parties interested in learning more about a sponsor to check a specific box and share those leads with said sponsor
· Distribute white papers, digital product samples, and more on behalf of your sponsors
· Distribute special sponsor coupon codes and offers to guests via email
· Have sponsors share a video product demo and distribute to attendees
· Set up a “Virtual Trade Show Booth” via a separate webinar where a sponsor rep can walk interested attendees through their product

Obtaining Audience Data

· Share any high-level audience demographic data you compile with sponsors
· Offer an emailed survey to your audience on behalf of sponsors

You get the idea. This is just a starting point, but it should help you realize that there is a lot more to offer sponsors for your webinars and virtual events than you might think. Just remember what objectives they are looking to achieve, and get creative with ways you can help achieve them.

Build the Perfect Sponsorship Proposal

Once you’ve identified the audience and value you’re creating, it’s time to articulate that value to sponsors. This is best achieved through a well-developed Sponsorship Proposal Deck. Arguably the most vital component of any sponsorship pitch, we’ve seen proposals range from a half-page word document to a 30-page professionally designed package. The length will vary based on your business, prospect, and opportunity, however all the proposals we build for our clients follow our proven outline:

Cover

Sponsorship proposals are a situation where the book is almost always judged by its cover. Take the time to put together a clean, eye-catching cover that helps the recipient visualize the opportunity. More than just a logo, try to insert something that highlights the value of what you’re offering.

Don’t have a designer on staff? There are plenty of online tools to help you create great designs with just a few mouse clicks. Personally, we’re big fans of Canva, which has a ton of excellent drag-and-drop templates for a variety of applications.

Personalization

One of the most often overlooked pieces of a sponsorship proposal, adding some sort of personalized information is vital if you want to maximize your chances of landing that sponsor. Ideally you should dedicate a full page to this, and include your prospect’s name and title, as well as a high-res version of their brand’s logo.

Opportunity Overview

From there, you want to provide prospects with a high-level overview of the opportunity you are offering. The value proposition should be front and center here, as the prospect needs to know exactly how this opportunity will bring them value.

Target Market

A clear outline of your target market is a must for any sponsorship proposal. Prospects need to know if there is proper market overlap. You should include a profile of whom your virtual event targets, complete with demographics (such as age, sex, location), and psychographics (desires, fears, needs and wants).

It’s tempting to list a broad market in hopes of making it inclusive of a variety of sponsors. However, this will only cause you issues in the long run. No company, large or small, can compete in a market that is too large and vague. Target Markets such as “All Pet Owners” or “All Women” are not nearly specific enough, and will force you to spend a great deal of time and money chasing the wrong individuals. Even mass-market products like Facebook and Coca-Cola have specific, detailed target markets they focus on at various stages of their product lifestyle. Be sure to do the same, and show the sponsor leads reading your proposal that you know exactly who you are targeting.

Advertising and Marketing Plan

Sponsors want to know they are joining a winning team. If you’re not out there promoting your event, why will they want to invest money to partner with you?

Show your leads that you’re actively pushing your digital event forward. Use this part of the sponsorship proposal to discuss your own advertising and marketing efforts, and how the sponsor would benefit in turn if they partner with you.

Activation Ideas

Now is your time to shine. Showcase all the hard work and effort you’ve put into understanding your sponsor lead’s needs, wants, and objectives, and create a series of Activation Ideas for their brand. These are not standardized, one-size-fits-all, “Gold, Silver, Bronze” sponsorship packages. No, these are customizable programs developed specifically for this lead.

Highlight a selection of your sponsorship assets that you believe will best serve the sponsor, and identify exactly what objectives you intend to achieve for them with this activation. Also be sure to reiterate that everything is customizable, and that this is by no means a “yes or no” sponsorship package.

The number of Activation Ideas you include is entirely up to you, however we recommend somewhere between 2 and 4. By including multiple, the sponsor lead will develop a broader understanding of just how robust your virtual sponsorship programs are, and how there are activations for nearly every type of objective they could be looking to achieve.

Pricing

It’s tempting to put pricing in your proposal. It really is. You feel like it’s incomplete without it. However whenever possible, we encourage you to save pricing for a separate follow-up conversation with your prospect. Your sponsorship proposal is about excitement. It’s about visualization. It’s painting a picture for your prospect, one that has them immediately picking up the phone to call you to learn more.

If price is included at this stage, you’ve created a decision point for your lead, which means there is the potential for “no.” Worse yet, you’re not even going to be in the room while they are mulling over this decision. They will be weighing the pros and cons of your proposal and pricing blind.

By leaving price off your initial sponsorship proposal, you have greatly increased your chance for a follow up conversation. This conversation is where you will obtain even more understanding of the sponsor’s objectives, wants, and feelings on the activation ideas you submitted. From there, you can further customize your suggested activations until you know they are perfect. Then, and only then, will you want to start discussing pricing with your sponsor.

Getting Started

The world of events is changing rapidly. As digital adoption of large-scale conferences, trade shows, and other events takes off, now more than ever it’s import to understand how to find sponsors for your webinars and virtual events. Because even in the digital space, sponsors can ultimately be the difference between a successful event, and one that hemorrhages money.

Looking to find sponsorships for your virtual events or webinars? Be sure to check out our acclaimed course How to Write a Sponsorship Proposal that Earns.

How to adapt and survive during these uncertain times

There is no such thing as “business as usual” anymore.

The world has been turned upside down, and companies everywhere are adapting to a new way of life. For many, this ability to adapt is a matter of life or death for their business. Because even if things do return to the way they were before the chaos (however unlikely this may be), it won’t happen for quite some time. Meaning that for businesses to survive the storm, they need a new game plan.

What sort of game plan? One that takes a page right out of the Silicon Valley playbook, adopting a skill that is a perennial favorite among venture-backed startup founders…

The pivot.

Whether you’re a high-growth, well-funded tech startup or the local restaurant on Main Street, understanding how to pivot your business during these uncertain times might be the only thing that can keep your ship afloat.

Not sure where to get started? Let’s look at 5 ways your business can pivot to survive this pandemic.

1. Offer More

For some businesses, survival will require offering more than you ever have before.

Take the fancy Italian restaurant down the street (we’ve all got one). With their dining room closed for the foreseeable future, their go-to solution is likely to offer takeout and delivery, keeping their fingers crossed that things will go back to normal soon.

Sure, by offering takeout and delivery, they can continue to serve delicious food to hungry people. But their average order value is taking a huge hit, as no in-person dining means no alcohol sales, no appetizer and dessert upsells, and of course, no tips for their staff.

So, what can a business like this do to overcome these unexpected challenges? Offer more. To survive an extended hit to their traditional business model, they need to think of ways to offer more to their customers, driving average order values back up to what they were when guests dined in-person.

Perhaps the restaurant could offer a White Glove Date Night Service. Partnering with other local shops, they could put together a special bundle that includes a full takeout meal, a bottle of wine, a white tablecloth, homemade candles from the store down the street, an invite-only romantic Spotify playlist curated by the restaurant’s Hostess, a list of staff favorite romance movies streaming on Netflix, etc.

All of a sudden, this restaurant’s takeout meal turns into an experience. Something to look forward to. Something to keep the romance alive during the quarantine. And something that goes from a $35 takeout bill to a $99 package that local couples will happily pay in order to bring some happiness and excitement into their homes.

All this, just by offering a little bit more.

2. Offer Less

Of course, sometimes less is more.

For some businesses, the best way to survive these troubled times is pare-down their product or service, and focus exclusively on the customer segments that drive the most profit.

Take a typical SaaS company that offers both entry-level and enterprise-level versions of its product. Sure, when times were good, it made sense to staff up and serve both of these segments. But now? Probably not.

A company like this would need to take a long, hard look at which of the two segments drives more to the bottom line, is growing faster, and is most likely to continue growing (or at least maintain) during the impending recession. Based on what they discover, the business will have a game plan as to which segment (and corresponding product features) become the priority, and where they can offer less.

Now, that’s not to say that they need to (or should) fire a bunch of customers from the less valuable segment. It just means that they should reevaluate the time and money invested in areas such as product development, marketing, and customer service related to this segment. This group doesn’t need a whole bunch of extra features right now, nor can you afford to develop them.

Now is the time to focus, and the best way to do that is to offer less.

3. Solve a New Problem

Though it’s easy to forget, the core reason businesses exist is to solve problems for their customers. But what happens when the problem you solve is no longer relevant?

Take Airbnb for example. With people not traveling, their customers no longer have the problem of finding unique, comfortable lodging while away from home. But many of their customers have a new problem: a desperate need for a quiet space to work remotely.

So, what should Airbnb do? Pivot, of course (at least temporarily)!

The company could adjust their platform so that hosts can offer reduced “daytime-only” rates to rent out their home office/bedroom with a desk (one that’s deep cleaned nightly). Customers with a less than ideal work-from-home situation would now have the option to head down the street to an empty, quiet Airbnb listing to work for the day. And hosts would have an opportunity to still bring in some much-needed revenue.

Same business. Same product. Different customer problems solved.

(PSA: I am no doctor or infectious disease expert, and I recognize that this particular idea may go against current social distancing guidelines. I am just using it to illustrate a point about rethinking the problems you solve for your customers!)

4. Redefine Your Market

When there’s an overnight shift in the global economy, it’s not uncommon for businesses to see a shift in their target markets as well. Your core customer base might disappear overnight. But, there may be one waiting in the wings…a market you previous would have never expected to serve.

And for those businesses paying attention and acting swiftly, this spells opportunity…not only to stay afloat during the crisis but to perhaps emerge stronger than ever.

Take Instacart for example. This on-demand delivery service has traditionally focused its efforts on acquiring urban-dwelling Gen Z’ers and Millennials. These groups are early tech adopters and heavy eCommerce shoppers, making them ideal candidates for the service.

But now, with nearly everyone forced to stay home, millions of Baby Boomers across the U.S. are suddenly signing up for Instacart. Do you understand how big of an opportunity this is for the company? Baby Boomers comprise a massive share of the nation’s buying power, however, they have traditionally shunned online retail in favor of shopping in physical locations.

As Baby Boomers are forced to adopt the service en masse, this might be a turning point for the entire generation. And for Instacart, a chance to redefine their market. Hopefully, the company is already strategizing as to how they can retain this valuable customer segment once the pandemic subsides. Because if they can keep the Boomers coming back long term, they will unlock a massive opportunity to grow.

5. Update Your Business Model

For some entrepreneurs, the changes brought on by coronavirus will prompt a necessary change in their business model.

Say, for example, you run an ad-supported newsletter. Think about the long-term outlook of this business model. Media outlets everywhere are already reporting strong declines in ad sales…and it’s likely to get worse as the full effects of the pandemic come into view.

This means that your business model relies on a pool of diminishing customers. Not a great place to be…

So, what can you do? Implement a new model.

If you believe you’re providing valuable content, why not explore a paid newsletter? Sure, you’ll see a drastic drop-off in top line subscription numbers, but the remaining group of subscribers are going to be your most passionate, loyal fans. Plus, there could be unintended positive effects as well, such as the additional time you have to spend on content since you’re free from chasing down ad revenue from sponsors.

While it may be stressful to have it forced upon you, the ultimate good from reevaluating your business model can be a positive outcome from an otherwise terrible situation.

That’s what happened with my non-alcoholic beer and alcohol free wine brand YOURS. With manufacturing troubles brought on by COVID-19, we made the most of the situation, and temporarily transitioned our efforts to building out a blog of non-alcoholic beer, wine and spirit reviews as well as mocktail recipes. Sure, we’d rather have a warehouse full of product to be selling right now, but for the time being we can continue to provide value to our current and future customers through unique, interesting content.

Everybody Has a Plan Until They’re Punched in the Mouth

Mike Tyson once famously quipped that “Everybody has a plan until they get punched in the mouth.” This quote — a derivative of one originally shared by boxing legend Joe Louis — is a violent but truthful take on adaptation and survival.

The world has punched us in the mouth. For some businesses, it may be a knockout punch. But it doesn’t have to be. Remember that you exist to solve problems for your customers. And just because their problems have changed doesn’t mean you can’t still solve them. You just need to think of new, innovative ways to do so.

Pivot. Adapt. Survive. That’s the game plan right now.

And the sooner you figure that out, the sooner you can get up off the mat and start fighting back.

5 Ways to Pivot Your Business During a Pandemic was originally published in The Startup on Medium, where people are continuing the conversation by highlighting and responding to this story.

Why now is as good a time as ever to launch your business

The fear is real.

Markets are in record declines not seen in over 30 years. Massive layoffs have begun, with much more likely to come. Several businesses have already gone under. Capital is drying up.

Let there be no doubt: we’re heading into a long-awaited recession that will shake the world to its core. And for many would-be entrepreneurs out there, this market instability is the perfect excuse to shelve their dreams while they wait for things to blow over.

But is this the right move?

It’s no secret that starting a business is incredibly difficult. And yes, challenging times can create even more obstacles between you and success.

But isn’t that what entrepreneurship is all about? Leaning into the obstacles? Finding and creating opportunities in places others have overlooked or written-off?

Why should these difficult times ahead be any different? If anything, as others run away from the chaos, there will be more opportunity than ever to deliver real value to the world.

How can I be so sure? Well, if history proves to be any sort of reliable predictor, recessions have actually served as the launchpad for some of the world’s most incredible businesses.

Need proof that now is as good a time as ever to launch your business? Here’s a look at 13 massive companies born out of recessions:

General Electric

Year Launched: 1892
2019 Revenue: $95.2 Billion

Though he officially got his start years earlier (and survived several smaller recessions during the 1880s), Thomas Edison and company launched General Electric right as the nation was heading into the Panic of 1893, a period of 16 months where business activity dropped nearly 40% across the nation. Nevertheless, the company persisted and went on to be one of the original 12 companies listed on the Dow Jones Industrial Average in 1896, where it remained for over a century.

General Motors

Year Launched: 1908
2019 Revenue: $137.2 Billion

Though his business was still manufacturing horse-drawn carriages in the late 1800s, General Motors Founder William Durant made his transition into the newly-created automobile industry in 1904 with his purchase of the Buick Motor Company. However, it wasn’t until early 1908 — in the middle of the 30% business declines experienced during the 13-month Panic of 1907 — that Durant decided to launch GM as a holding company to acquire even more automobile manufacturers. This strategy would serve GM well, as it would go on to become one of the largest corporations in the history of the world.

IBM

Year Launched: 1911
2019 Revenue: $77.1 Billion

Launched as the Computing-Tabulating-Recording Company (CTR) by Charles Flint in June of 1911, IBM got its start selling commercial and business machines right in the middle of a long two-year panic. While industries everywhere saw double-digit declines in activity, CTR was able to not only survive but thrive, eventually changing its name to IBM, and becoming the leader in technology that would support the digital revolution, making billions along the way.

Disney

Year Launched: 1929
2019 Revenue: $69.6 Billion

In 1928, brothers Walt and Roy Disney introduced the world to Mickey Mouse via their short-animated feature Steamboat Willie. A year later in 1929, the duo incorporated Walt Disney Productions right as the nearly 4-year Great Depression was getting started. Troubling times be damned, the brothers knew that America needed a smile more than ever, and was able to navigate the challenges of the depression, growing their business to the point where they could begin work on their first full-length animated feature right after The Great Depression ended.

That feature? A little movie called Snow White and the Seven Dwarves.

HP

Year Launched: 1939
2019 Revenue: $58.8 Billion

While considered small compared to The Great Depression, the recession of 1937–1938 would end up being one of the worst recessions of the 20th Century, with GDP decline reaching nearly 19%. Nevertheless, it was during this recession that recent Stanford graduates William Hewlett and David Packard decided to formulate a plan for their new electronics company, Hewlett-Packard. Still feeling the sting of the recession, the duo incorporated their business on January 1, 1939, and would go on to build one of the worldwide powerhouses in computers.

Hyatt

Year Launched: 1957
2019 Revenue: $5.0 Billion

Two months into the Recession of 1958, entrepreneur Jay Pritzker purchased the Hyatt House motel near Los Angeles International Airport. Even with business activity and travel slowing during the tough economic times, Pritzker pushed on, opening two additional hotels before the end of the decade. Eventually, this collection would grow to nearly 900 properties, and annual revenues exceeding $5 billion dollars!

Trader Joe’s

Year Launched: 1958
2019 Revenue (Estimated): $13.3 Billion

Another business born during the Recession of 1958, Trader Joe’s got its start under the name Pronto Markets in Southern California. After founder Joe Coulombe returned to the U.S. from a vacation in the Caribbean, he sensed an opportunity to provide unique international food offerings in his stores to consumers that were becoming increasingly more global. The concept stuck, and Coulombe grew his businesses rapidly until he sold it to German billionaire Theo Albrecht in 1979.

FedEx

Year Launched: 1971
2019 Revenue: $65.5 Billion

Having developed the concept of fast, efficient, reliable door-to-door cargo delivery as part of a school project while at Yale, FedEx Founder Fred Smith eventually launched the business right on the tail end of the Recession of 1969–1970. Though this recession was relatively short-lived and mild, Smith faced major challenges trying to sell a new, unheard of type of service to a business community that was more hesitant than usual to spend money on untested vendors. Yet he was able to overcome the challenge and would go on to pioneer industry and grow a business that in 2019 delivered over 6 million packages a day.

Microsoft

Year Launched: 1975
2019 Revenue: $125.8 Billion

In 1973, an oil crisis coupled with a stock market crash led to a 16-month recession where the GDP took its worst hit in nearly 20 years. However, this decline did not stop Bill Gates and Paul Allen from developing their new computer software business Microsoft, which launched on April 4, 1975, literally just days after the recession was considered officially over. Within a decade, the company grew substantially and launched an IPO in 1986 that created 3 billionaires and 12,000 millionaires in the process.

Electronic Arts

Year Launched: 1982
2019 Revenue: $4.5 Billion

Prompted by the 1979 energy crisis, the 1981–1982 Recession brought some of the worst unemployment rates seen in decades. However, this didn’t stop Trip Hawkins from leaving his secure job at Apple to start a new software company called Electronic Arts. The company would quickly grow to become a leading provider of games for the booming home computer and entertainment system market, evolving into a giant with 10,000 employees and over $5 billion in annual revenue.

Honorable Mentions: Salesforce, Google, and Facebook

Though technically not started during recessions, these three giants were all launched right before major economic meltdowns: Google (1998) and Salesforce (1999) right before the dot-com bubble burst, and Facebook (2004) shortly before the Great Recession. Having weathered the storms, these three companies posted a combined $72.77 billion in revenue in 2019 alone.

This list is a short look at what is still possible when you decide to act in less than favorable conditions. While the coming market might not be ideal for everyone, if you have an idea you believe is ready for the world, don’t assume you have to shelve it until things rebound. In fact, this might be the perfect time to act.

Whenever you find yourself on the side of the majority, it is time to pause and reflect. — Mark Twain

Sure, it’s going to be hard. Entrepreneurs need to make better decisions, operate lean and act swiftly — much more so than if they were in the middle of a booming market. But as these iconic brands have shown us, there should be nothing that stops you from chasing your dreams.

Businesses are born every single day in every country on earth. Don’t let anyone or anything scare you out of building yours.

While you’re here, if you want to follow along with my latest journey, a community built to support the exploding non alcoholic wine, non alcoholic beer, and non alcoholic drinks and cocktails market, feel free to visit us at YOURS.

13 Massive Companies That Started During a Recession was originally published in The Startup on Medium, where people are continuing the conversation by highlighting and responding to this story.

What you can learn from Bill Gates’ favorite business case study

Recently, Ford had the pleasure of announcing that their iconic F-150 pickup truck took home the trophy for 2019’s top-selling vehicle in the U.S. An incredible feat on its own, this is especially astonishing considering that the F-150 has earned this honor for a mind-blowing 43 consecutive years.

That’s right, this product has remained atop the charts since 1976! There are very few companies out there with any sort of track record like this, and Ford should absolutely be commended for longevity, and its ability to evolve its F-Series product line over many decades and several generations of consumer tastes. However, that’s not to say that Ford, like any company that’s existed for over a century, hasn’t had a few hiccups along the way…

Anyone Remember the Ford Edsel?

Depending on your age, you may have never even heard of this car. But if you’re old enough to remember, the Edsel probably stands out there alongside Betamax, New Coke, and the Apple Newton as one of the biggest product flops of all time. In fact, Bill Gates has cited the Ford Edsel as his absolute favorite business case study, as it teaches us what happens when you care more about your product than your customer.

The Car of the Future

From 1955 to 1957, Ford teams toiled in secret on what they dubbed “the car of the future”. They promised it would be the most exciting development in automobiles since Henry Ford himself has debuted the Model T. By the time the Edsel launched, the company had already pumped an astonishing $250 million into development (that’s $2.2 billion in today’s dollars).

Much of this came in the form of extensive research on the car. Ford conducted more consumer polling than it had ever done before. With this much consumer interaction, they were sure to have a hit!

Needless to say, spirits were high ahead of the launch. But when the Edsel was finally introduced to the world in September of 1957, it was immediately panned by auto critics and consumers alike. It was too big. It was too expensive. It used too much gas.

The Edsel may have been the car of the future, but it turns out that it was a future no one wanted.

The Fallout

With immediate sales of the Edsel lackluster at best, not to mention a whole host of production issues causing problems on the line, Ford Executives had a real problem on their hands.

They tried to save the vehicle with new product iterations in 1959 and 1960, but at that point, it was too late. A mere three years after introducing the Edsel, Ford closed the project down for good, at an estimated total loss of $350 million ($3.1 billion in today’s dollars). It was an objective failure for the company.

Where Did It All Go Wrong?

For years, Ford tried to determine exactly what went wrong with the Edsel. There were countless problems that plagued the project from the start. But one of the most damming went all the way back to the very early stages of its development.

Remember the incredible amount of consumer polling that took place?

As learned through interviews with countless Ford team members and executives, it turns out that a great deal of this polling was ignored. Quite simply, Ford decided its vision for the product was more important than the consumer need for the product. And when they did incorporate consumer feedback, they did so without any real focus (which is likely why the Edsel launched with a whopping 18 model variations — clearly an attempt to please everyone).

When it came to the Edsel, Ford cared more about the product than the customer.

Ford decided that “if we build it, they will come”. But unfortunately, “they” had no interest in what was built. By failing to truly engage and listen to consumers, Ford missed the memo on the changing tides of the automobile industry. An industry that would soon blossom from the gas-guzzling extra-large road cruisers of the 1950s, to the small, eco-friendly cars of the 1960s (a decade in which the Volkswagen Beetle became the undisputed global king of cars).

The Takeaway

Ironically, up until the Edsel, Ford had been incredibly focused on its customers. In fact, the very foundation of Henry Ford’s Model T would not have been possible without his passionate pursuit of improving the lives of millions.

If Ford’s top priority had been creating the most feature-rich product he could, he would have attempted to build an even fancier “horseless carriage,” as the name of game at that time was building one-off, custom luxury cars for the extremely wealthy. But instead, Ford’s top priority was the mass American consumer, and the nation’s spirit of adventure. He realized he could feed this spirit by developing an automobile that was easy enough to use and affordable enough for millions to own. With this focus on the average consumer in mind, he worked backward until he developed such a product: The Model T.

Sure, The Model T lacked the many features seen in other custom automobiles of the day. But that didn’t matter, because those features didn’t mean anything to the mass American consumer if they couldn’t afford the vehicle. By focusing all his attention on improving the lives of his customers, Ford made the realization that above all else, the main feature his product needed more than anything was affordability.

And Edsel disaster aside, this passion for putting the customer over the product has carried Ford for generations. By focusing relentlessly on its customers, Ford has consistently remained ahead of the curve. This includes creating a domestic answer for rising consumer interest in Japanese compact cars with the launch of the Ford Taurus in 1980, which would go on to become the best-selling car of that decade. Same goes for its innovative, ahead of curve lightweight, suburb-friendly trucks (Bronco; Explorer), and the decision to create an in-between class of pickup that could work hard, play hard, and still fit in the driveway (the F-150) — a decision that’s been paying dividends for 43 straight years.

Applying the Lesson

It’s no wonder Bill Gates cites the Edsel as his favorite business case study — there is much to be learned. But the core lesson is this:

You must care more about your customer than your product.

That’s why when I launched my new business YOURS, a non-alcoholic wine and beer brand, I focused exclusively on the outcomes my customers were looking for, not the features of the product.

As the famous business school saying goes “No one wants a drill. What they want is the hole.” In the case of the Edsel, all the fancy features in the world didn’t make up for the fact that consumers didn’t ask for them. In fact, it was just the opposite. Consumers were asking for smaller frame sizes and better gas mileage, and the Edsel ignored all of this in the name of cramming in more fancy features born out of the Engineering Departments at Ford.

Thankfully, the story of the Edsel allows us all to learn a valuable lesson without having to endure a $3.1 billion failure. Build it and they will come is no longer a viable path to profits. Instead, you must be passionate about your customers. Their needs. Their wants. Their problems. Their desires.

If you’re looking to build a company that can last a century, the path is clear: your customer must always come before your product.

The $3.1 Billion Reason Why Your Customers Should Always Come First was originally published in The Startup on Medium, where people are continuing the conversation by highlighting and responding to this story.

Is the biggest purchase of our lives finally due for disruption?

Have you purchased a tv recently?

Moving to a new apartment last year, my wife and I were due for an upgrade. Our existing TV was one I bought when I first moved to New York City in 2009. Taking a cab across town (pre-Uber), I went to the Manhattan Best Buy to scope out my options (pre-Amazon Prime 2-Day Shipping). After some sweet talk from the salesman, I eventually landed on a 37” Insignia Brand 720p LCD flat screen — ”flat” being a relative term, as the TV was nearly 5 inches thick.

The cost? $659.

I haven’t thought much about TV’s since then. So, it came as quite a shock when I went to purchase our new television on Amazon. After a few hours browsing and scouring reviews, we ultimately went with a 52” Toshiba 1080p LED Smart TV.

The cost? $269 with free 2-day delivery.

I couldn’t believe it. Just 10 years after my NYC TV adventure, I was able to purchase a television that was objectively better in every single metric, yet cost 60% less than what I had paid previously. Sure, I was aware of Moore’s Law — the rule specifying that the capacity of computer components (or more specifically, the number of transistors per chip) doubles every 18–24 months, ultimately making electronics smaller, more powerful, and cheaper to produce — but I had never witnessed such a jarring before and after in my life.

For decades, televisions were the most expensive item one could purchase for their home. A true luxury. Now? They’re an afterthought. Similar to how Ikea and Wayfair have created a vast world of affordable options to furnish a home, Toshiba, Sony and many others have scaled and innovated in a way that have taken televisions from a luxury to a necessity, and have created a society where the average U.S. household has 2.5 televisions!

And sure, while this is great for consumers looking to “Netflix and chill,” it begs a bigger question. One that I just can’t shake — especially as my wife and I begin our search to buy our first home.

If everything inside the home has drastically come down in cost, why are homes themselves still so damn expensive?

The Affordable Housing Crisis

Spend any time at all on CNN, Bloomberg, or The New York Times, and you’ll inevitably come across an article or two talking about the affordable housing crisis. According to a recent Wall Street Journal article, two-thirds of renters in the United States claim they cannot afford to purchase a home. And making matters worse is the rising cost of rent. In fact, Harvard conducted a study of major cities in the U.S., and concluded that nearly 50% of renters are considered “rent-burdened,” meaning they pay in excess of 30% of their income on housing.

The number of rent-burdened citizens in the U.S. in 1960? Just 20%.

Simply put, home prices are rising faster than wages in 80% of U.S. markets. And when you look closely at the numbers, this growth in price is pretty staggering:

Price of U.S. Homes (1970–2020):

Median Price of Home (1970): $23,600 ($157,575 in today’s dollars)
Median Price of Home (2020): $316,000 (a record high!)
Change: 101% increase in cost

Now, this increase in cost hasn’t been without its upsides. Homes have gotten bigger and better over this time span as well, with the median square footage hovering around 2,500 — quite a bit larger than the 1970’s median of 1,500 sq. ft.

But if you do the math on price per sq. ft., it still doesn’t add up:

Price Per Square Foot of U.S. Homes (1970–2020):

Price per Sq. Ft. (1970): $15.77 ($105.30 in today’s dollars)
Price per Sq. Ft. (2020): $126.40
Change: 20% increase in cost

Sure, houses may have gotten bigger and better, but so has the relative price. And if this trend continues, the gap between those who can afford a home and those who are stuck renting will only widen.

How TV’s Went from Every Manor to Every Man

In contrast to the 101% increase in home prices over the last 50 years, televisions have experienced a drastically different arc during the same span of time:

Price of Televisions (1970–2020):

Median Price 21” Console (1970): $500 ($3,338 in today’s dollars)
Median Price 32” Smart TV (2020): $139.99 w/ free delivery
Change: 96% decrease in cost

Television manufacturers have figured out a way to increase quality while simultaneously decreasing cost. It’s Moore’s Law, economies of scale, and the globalization of commerce all working together in harmony to create a better deal for consumers.

So, why can’t we do the same for houses?

The seismic shift in televisions over the last 50 years follows a blueprint similar to nearly every major electronic device. Much like the two other staples of modern life — computers and cell phones — components got better and cheaper year after year, which allowed manufacturers to increase quality while decreasing raw material costs.

But this is just part of the story. The real shift can be explained by these two images:

Sony Television Assembly Line — 1970:

Samsung Television Assembly Line — 2018:

Notice a difference?

In 1970, an assembly line meant an endless stretch of human labor. Today, it’s robots and computers driving the bulk of the work. The production of these devices reached a technological tipping point, where increases in output and decreases in costs were no longer measured in single or double digits year-over-year, but by massive exponential figures.

Of course, human labor is still involved in production, but the degree is significantly less than it was 50 years ago. Not to mention that the expansion of our global economy has meant that much of this manufacturing and labor has been shifted to countries with significantly lower wages.

Now, compare this with the shift in home construction:

Bricklayers — 1970:

Bricklayers — 2018:

Not much has changed, has it?

Unlike televisions, which have undergone major advancements in both the materials used and the way they are manufactured, most homes are still being built the same way they were 50 years ago: wood, stone, metal, and lots and lots of manual labor.

While computers and technology may have revolutionized the way architects design homes, manufacturers create the raw materials, and engineers test structural integrity, for a home to come together, it generally requires a bunch of men and women swinging hammers for weeks, months, or even years on end. And until the home construction industry finds a way to change this, the cost of homes will continue to rise.

But that change may be coming sooner than we think…

3D Printing: The Technological Tipping Point for Homes?

Several years ago, the first mass market consumer 3D printers hit the shelves, and most of us immediately relegated them in our minds to a fun gimmick. A toy. Something your nephew uses to print his own action figures at home.

While fun to watch them work on the local TV news tech segment, most have written off 3D printers as something with no real commercial value. Which is why it may come as a surprise to hear that these devices are actually being used to build some pretty incredible things, including:

3D printed heart valves created by scientists at Harvard

3D printed rocket components being used in space by NASA

3D printed bones being developed by the military

Oh, and did I mention 3D printed homes?

In 2018, ICON, an Austin-based startup, received the first-ever permit to print a home. And print they did, creating a 350 square foot home in just 48 hours. Total cost? $10,000.

ICON has already unveiled their newest 3D printer, the Vulcan II, which can print a 500 square foot structure in less than a day for under $4,000! And this is not some one-off prototype printer either — the company is already taking orders for the Vulcan II, with delivery to come in late 2020.

Needless to say, if this technology catches on, it could be the revolution that will do for homes what the technological tipping point has already done for televisions.

Why 3D-Printed Homes Will Change Everything

According to the National Association of Home Builders, the cost of raw materials and labor to build the average single-family home is $237,760. At an average of 2,500 square feet, this comes out to $95.10 per square foot to construct a traditional home (before factoring in the cost of land).

Let’s compare with the homes being printed by ICON’s Vulcan II 3D Printer:

Home Construction Price Per Square Foot:

Price per Sq. Ft. (Traditional Build): $95.10
Price per Sq. Ft. (3D Printing): $8.00 ($4,000/500 sq. ft.)
Change: 92% decrease in cost

For those keeping track, this 92% reduction in cost is nearly the same drastic change seen in televisions when they went through their technological tipping point.

Can you imagine how the world will change if the cost of home ownership plummeted by 92%?

Even if land prices continue to rise (which, considering the growing remote workforce and families moving away from city centers, might not be the case long term), how many lives would change if a plot of land and a brand-new house cost well under $100,000? Can you imagine the shift in home ownership percentage? The amount of people struggling to pay rent who would now be eligible to actually own a place of their own?

The shift would be absolutely staggering.

Of course, there are those that will be quite vocal against the trend. I don’t want a cookie cutter home! 3D printed houses are too small! Who wants this ugly beige box?

All understandable objections. But history has proven time and time again that these types of objections can be overcome.

Look at automobiles. At first, they were a custom-built luxury machines made exclusively for the wealthy (much like the first televisions and many traditional single-family homes). Then, Henry Ford came along — and through a technological tipping point — created a way to bring the machine to the masses.

Sure, many folks probably wished their Model T didn’t look the same as every other Model T on the road. But guess what? Savvy entrepreneurs (such as the Dodge brothers) shared this same thought, and used it as market validation to create a new line of cars with different options and styles. And within a few short decades, there were dozens of automobile manufacturers creating hundreds of different models each and every year…not to mention the whole industry of automobile parts and customization, which allowed owners to take their “cookie cutter” car and truly make it their own.

Sure, right now 3D printed homes might not feel like the castle of your dreams. But give it time, and this industry will develop the healthy competition and innovation that will allow each consumer to find the model that’s right for them…and at a fraction of what they used to pay for homes.

The New American Dream

That is the heart and soul of the American Dream, homeownership, the idea of being able to buy a house and start to build your family. -Wendell Pierce

The dream of owning a home is engrained in the American ethos. Unfortunately, the economic shifts over the last half a century have robbed two-thirds of citizens from this dream. The reasons are complicated, of course, but maybe they don’t to be.

Instead of focusing all our attention on wages and interest rates and other socioeconomic factors related to homeownership, what if we focused just a little bit more on the price of building the home itself? The cement, wood and metal that keeps us warm, safe, and ultimately, fulfilled.

The blueprint for success already exists. We’ve seen it with complicated machines such as automobiles, and complicated technology, such as televisions, computers, and cell phones. All that’s to left to do is adopt it to a new industry.

A country where everyone who wants a home can afford one. Now that’s an American Dream…

How Customer Discovery Could Have Saved Me $97,452.98

I bet I’ll have 100 users by dinner…

I had never been more confident. I was finally launching my first startup, and I just knew that this was the day everything was going to change.

This moment had been six months in the making. What started as a simple idea that popped into my head while sitting at a stoplight, had since morphed into an obsession that consumed every waking moment. And now, sitting in a quiet Las Vegas hotel room during those few pre-dawn hours where the city actually sleeps, it was finally time to release my startup out into the world.

That startup was called Switches+Strings — a subscription-based platform for renting music equipment. The year prior, I had a painful experience trying to rent a special guitar needed for a gig, and it left me convinced that there had to be a better way…and that I was the guy to do it.

Six months later, and I had tackled everything on my pre-launch checklist. I wrote the business plan and projected 5-year financials. I came up with the name and outsourced a logo. I purchased the domain and found a developer to create the backend. I located a small space to warehouse our growing inventory of equipment. I incorporated. Got insurance. Setup a corporate bank account. I even joined a co-working space to network with other startup founders.

I had done absolutely everything — or so I thought — and now it was finally time to reap the rewards.

I turned the site on, enabled my Google and Facebook ad campaigns, and sat back in the cheap hotel desk chair with a smile. Today was the day everything would change…

While I hadn’t planned to celebrate our launch with a trip to Las Vegas, my employer at the time had other ideas. Though I was certain it was only a matter of time before my startup would “take off” and I could say sayonara to my day job, they still paid my rent for the time being. So when I was asked to attend a Vegas meeting the same day of our planned launch, I had little choice in the matter.

With my developer under strict instructions to call or text the second any issue arose, I took one last look at my computer screen and headed out the door.

“When I return this evening,” I thought to myself, “I’ll be on my way to building an empire.”

Something Must Be Wrong

My day of meetings dragged on for what seemed like forever. Thankfully, my incessant, discreet glances at my phone kept my mind at ease. No calls. No texts.

No news is good news, right?

Once we finally broke for the day, I raced back down the strip to my hotel. I couldn’t wait to see how many users had signed up while I was gone. My goal was 100. Not only was this a nice round number, but with first month’s membership fees, it would mean a much needed $3,000 would be hitting my startup bank account within the next few days. This business had not been cheap to launch, and I had already burned through all my savings and had moved onto my credit cards. I was excited about the new influx of member cash to stop the leak…

I raced up the elevator and down the hallway. Bursting through the door I dropped my bag and furiously shook the mouse to wake my computer screen. Clicking refresh on the dashboard I eagerly awaited the good news…

0

Huh? I refreshed again….

0

Is the internet working? I tried a few bookmarks. Hmm, everything seems to be working fine. Maybe our ads failed to launch properly? I checked those dashboards as well as Analytics.

798 clicks. 798 new users on site. 1:12 average browse time.

Ok, so people were reaching the site. Something must be wrong. I called our developer to see what was up.

“Hey, something’s up with our dashboard. I am showing 800 people have already visited the site but we’ve had zero signups. Is something wrong with the checkout? Why didn’t you call me if there was an issue!?”

“Yeah, well, that’s the thing…the site’s working just fine. I’ve checked and checked again all day long. It’s not a technical issue. People just aren’t signing up…”

People just aren’t signing up.

How could that possibly be? I had worked so hard and poured my soul into this idea. I had done everything I could possibly do to build an amazing service. Did I miss something? Did I skip a step? Had I made a mistake somewhere?

As it turns out, I had…

I never spoke to my potential customers.

Why Customer Discover Must Be Step #1

I eventually got my 100 users. In fact, I got several times that number. But, I never was able to course-correct for my fatal error at the start. In retrospect, my failure to speak with potential customers before I launched was one of the biggest reasons my startup shuttered two years after launch (and left me with $97,452 in debt in the process).

I’d later learn about Steve Blank and Eric Reis, two serial entrepreneurs known for developing what’s called the Lean Startup methodology. The goal of a lean startup is to test your business ideas and assumptions with as little time, money, and other resources as possible. In other words, do the exact opposite of what I did…instead of sinking $97,452 into a business idea that ultimately did not work, find a way to test the idea before you build.

And the best way to test your business idea? Customer Discovery.

What is Customer Discovery?

Customer Discovery is a process that brings your potential customers into the fold at the beginning of your startup. Through a series of interviews, you lean on your potential future customers to identify problems, validate assumptions, and ultimately refine your startup idea until you are confident that if you build it, customers will come.

While methods vary, the core Customer Discovery process can be broken down into four main steps:

1. Define a Hypothesis

2. Define Your Assumptions

3. Ask Good Questions

4. Evaluate and Refine

[Check out a great detailed breakdown of the 4-step process here]

In essence, Customer Discovery is a scientific process where you test assumptions and hypothesis with real potential customers before you build a single product or service.

Why Is Customer Discovery Important?

With my first startup, I made a major assumption based on a personal experience. I had a problem renting music equipment and wished there was a better way, and so I assumed that other musicians had the same problem.

But there was just one issue…I never actually asked other musicians if they had the same problem. As it turned out, many of them did not feel the same way at all. Sure, a small pocket did and grew to love our service, but it was nowhere near the % of the market we needed for the economics to make sense.

Customer Discovery would have saved me 2 years and nearly $100,000. What could it save you?

“I always get this strange question of ‘how do I get my first users?’ which always kind of confuses me, because theoretically you decide to solve a problem that you know someone has. So, the way you get your first user is you talk to that person that you know has the problem.”

-Michael Seibel, CEO, Y Combinator; Co-Founder, Twitch

By now, most anyone in the startup space had probably heard the harrowing statistic that 90% of startups fail. While eye-opening, this statistic only really matters if we learn why nine out of ten fails. Thankfully, CBInsights conducted a thorough study to identify the top reasons so many startups go out of business.

Taking the number one spot?

There was no market need for their product or service.

Or in other words, the startup built something that no customer wanted.

How is it possible that so many businesses work so hard over so many years to introduce something to the world that isn’t needed? Simple, they skip the most important step: Customer Discovery.

How to Get Started with Customer Discovery

Thankfully, as the Lean Startup methodology has grown, so have the number of resources available teaching the Customer Discovery process. Here’s a list of some of my favorites to get you started:

The Lean Startup by Eric Reis

Why the Learn Startup Changes Everything by Steve Blank

The 4-Step Guide to Customer Discovery by Future Founders

How to Build an MVP by Y Combinator

Customer Discovery Will Change Your Life

Since my own failed startup, I have become obsessed with seeking out stories of successful Customer Discovery. Recently, I had the pleasure of attending a talk with the founder of one of the fastest-growing SaaS companies in the country, whose meteoric rise reads like a case study on how Customer Discovery will change your life.

This particular founder’s origin story had all the makings of a great Silicon Valley tale. The tech whiz college dropout coding away on a single feature “product” that eventually morphed into one of the most advanced marketing automation tool suites on the market.

When asked how this founder was able to successfully scale from a single tool into an entire SaaS suite, his answer was simple:

He listened to his customers, and built tools to solve the problems they were already having.

As he went on to explain, nothing his company has ever created was developed without validation from direct conversations with customers. Unless there was a clear, consistent theme of customers struggling with a problem AND actively seeking a solution, it didn’t get built.

In fact, Customer Discovery is so important to this CEO, that he still starts and ends each day reading the feedback from customer interviews conducted by his teams. As he sees it, this is the only way he can ensure that his company continues to focus on solving the right problems, for the right people.

Solving the right problems, for the right people. It’s all about the people. That’s why with my latest venture into non alcoholic wine, YOURS, we’re taking our time to build a community and listen. We’ve built a blog catering to the alcohol free community, and are using it to engage and understand their problems before we roll out new products.

It seems simple, right? Well as shown, at least 42% of the new startups out there will miss this step. But thankfully you don’t have to be part of this statistic.

All you need to do is start with Customer Discovery.

Want Your Startup to Succeed? Talk to Customers FIRST. was originally published in The Startup on Medium, where people are continuing the conversation by highlighting and responding to this story.