Dr David Bozward

Category: Blog

  • The Fiction of Market Research

    Your professors sit there and wonder what they can get you to do as coursework, and yes the best they can come up with a market research assignment, predominantly based on desk research. This keeps you in the library and out of trouble while making it easy to compare this academic years’ marketing students in one easy process.

    In the real world…

    The majority of market research is done by people who know little or nothing of the product or service. Their job is to research and make nice pretty reports. This research takes months to gain any form or quality. In olden times, 1960’s when marketing was discovered by Theodor Levitt this was fine, but in the post Steve Jobs days, it is not. Data must flow faster than money for it to make money. Otherwise its value is zero. The stock exchanges of the world have long understood this, free data feeds on stock value are delayed by only 15 minutes. Most marketing data is at normally on average one year old. So how valid could then be?

    So off you go and ask some random sample of people on the local high street and ask them a series of questions, do you like my product?, how much would you pay?, would you recommend it? and finally their demographics.  You ask me these questions on a Saturday afternoon while I am out shopping and I tell you anything you want to hear to get rid of you, especially if you are offering me and my family an IPAD 3 or a trip to DisneyLand (The LA one and not the cheap one across the channel).

    The true and ONLY test to see if someone will buy it is to offer it for sale. Steve Jobs knew it. Never once did he do market research, how would you know if you want to use a tablet which is made of glass and aluminium when the only tablet you have ever used went into your month and you swallowed it. Its just one step too much for the man on the street. So spend the money on the hype and not on the research which will just out of date data.

    If you have the product then sell it, if you don’t have the product then allow pre-orders. Marketing has to generate leads which generate sales, whenever you do marketing, research, strategy, planning, analysis, its have a single destination, a sale. If it’s your assignment then the payment is a 1st class honours degree.

    Offer it for sale, ask for orders, what modifications would they require to part with their money today. You take the money on a product delivery or return basis, so they never loose out. You take their email and telephone numbers, so they can become in and be part of your focus group, beta test users. You make them part of your user community and send them updates on everything that is happening. They have brought into you and your business and therefore are part of your new family, these are called loyal customers.

    If you can’t get 10 people to buy into your concept, parting with real money then its time to go back to the concept drawing board, looking at the business model, customer needs, the products features and benefits and how you will get access to the right group of people who will part with their cash.

    Yes, I hear all of you out there saying you need to understand your market, but we need to teach students about action and not information research paralysis. It’s the doing that makes the business and not the research. You don’t see Alan Sugar saying “go and research who will buy cup cakes at Westfields shopping centre”, he just says go out and have a go and come back, someone will get fired. And you know who that will be, it will not be the one doing the sales, it will be the one who spent the last few days researching what to do. In Dragon’s Den, the one with the letter stating they will purchase the product gets funding, the one who saying they have spent £450,000 on research, prototyping and further analysis gets a kick up the back side.

    So decide now which one you are going to be?

  • Not all businesses are the same, so why should all business support be?

    The process of developing a business from the embers of an idea is a mammoth task and the majority of entrepreneurs will take as much help as is available. They call up business link, attend a few HMRC workshops, go to networking events and attend skills development programmes where available.

    As newbie to being an entrepreneur you are not sure how long this take and therefore spending money and time on anything has to be seen in the light of moving the business forward.

    In the previous years we have seen the simplification of business support and now a major reduction in the support is not making each industry sector look how they can support their own.

    There has been a major amount of research done into business clustering and the benefits.

    The tech clusters around Universities such as Cambridge, manufacturing in the North West and material engineering in Sheffield. Therefore both the regions and the industry itself needs these clusters to develop, grow and become the defacto region for this type of business. These self-regulating clusters should be the catalyst for regional growth based on local business developing a self help group.

    Industry has a long industry of developing such organisations such as the traditional guilds (which still live on in Germany) and Chamber of Commerce, CBI and IOD. However their failure in the past to manage government funded projects is based on individual self-interest and not that of the group, seeing the one profit from helping others in the community.

    This is because not all industry is the same! Having network of general business advisors creates a failure point as everyone has to be a generalist and not a specialist. If you are a specialist then providing your services as a consultant is not always done for money. However, if it’s a £50 million project, then who doesn’t want part of this pie.

    The important aspect of this support is that those providing the support want to keep these young businesses as members, they know they have to provide the very best to benefit. One mistake and the relationship fails and that business move on without your support, never to be seen again.

    So we should be developing our business networks to support start-ups and pay them on the success they have in clustering these businesses, growing them and then ensuring they are exporting. All things that many of our industry sector networks do so well.

  • I’m putting you all on the naughty list!

    As we come closers to clocking off for this year, I always start to review what has happened and more importantly try and understand how I can do things better next year.

    The major concern I see is that the majority of people have not tried to be more enterprising this year. They have tried to do their business as usual, using the same business models, trying to hang on to the same funding models, dead end public sector jobs and even running the same university degrees which lead to zero employment prospects (unistats.direct.gov.uk).

    We all have to make changes everyday to continue to develop and it through this development we can ensure we stay with the flow. This should be every person’s manta.  I am always amazed at why we think that doing the same thing for hundreds of years will provide prosperity in this country, whereas there are billions of other people in the world who are constantly looking at how they can develop faster, higher quality, cheaper, more effective methods to do what we have done for hundreds of years. These people are taking advantage of the global economy.

    Its only through using innovation, our technology advance, our amazing communication advantage and selling in real time to the global customer we can move the economy forward. Its not through spending money we don’t have on goods we don’t make.

    Our resistance to change is shown in the way the UK deals with Europe, the way we run our national infrastructure and how we educate our people. I am a great believer in if its not broken don’t fix it, however sometimes you have to take some hard decisions based on the rest of the planet and not just on the few who can’t be bothered to change (especially when their pension means the young will be paying for it in taxes for the next thirty years).

    So lets make 2012, the year that we embrace change and especially entrepreneurial change, making sure that we develop new forms of income, new business models and creating a network of like-minded people who are developing a prosperous future.

    So here are some New years resolutions for you for 2012:

    • Make 2012 you most enterprising year!
    • Become a self made Entrepreneur in 2012
    • Employ someone else in your business in 2012
    • Start a new business in 2012
    • Develop multi streams of income in 2012

  • LinkedIn’s Hoffman Says U.K. Has Woken Up to Entrepreneur Culture

    Had the great opportunity to work with Linkedin, SVC2UK, and GEWUK in the last few weeks and just wanted to share what Reid Hoffman, Linkedin’s Executive Chairman and co-Founder had to say.

    Thanks to Tech Europe for sharing.

  • Should I start a business while at university?

    My advice for students thinking of starting their own business…

    An interview at Aston Business School.

  • Serial entrepreneur and RSA chairman Luke Johnson

    Great speech from serial entrepreneur and RSA chairman Luke Johnson visits the RSA to share some key tips on the creation of successful, inspiring and ingenious enterprises.

  • Learn from the best

    Last week I heard that the electricity companies were making more profit per customer than in the previous year. This is a very important lesson for us entrepreneurs, one which we should take note of in these times of low economic growth.

    The easiest way to make more profit is make more revenue to you existing customers.

    Everyone knows this yet we seldom take our own advice and here we are looking at the big utility providers and see that this is just what they are doing. In the previous weeks we have seen that worldwide growth is almost nil, the banks are still not in a state to lend to businesses and international markets are looking more like a fun ride than places to invest your life savings.

    The utility companies have a core problem, that they have a fixed number of subscribers (with limited house building the growth potential is negligible), they have had a very warm summer (average spending per customer has reduced) and unit costs of the raw material has increased and is set to continue. So with shareholders, waiting for our dividends, they can only do one thing, increase the profit margin per customer to show any form of growth. Without the shareholders, they can make electricity and we cannot buy it.

    In many other markets you have many more options. The first is to up sell on the current produce. So if the customer has already purchased the Ford KA, then maybe they are ready to buy into the Fiesta or Focus. The great thing with this is you then may buy their used car and re-sell that, creating a double selling opportunity.  Lets not forget the finance, insurance and servicing options which continues the revenue stream for years.

    Another option is used by the fast food industry. Normally you are asked if you would like to go ‘large’ for 30p. This means they put more ice in your slightly larger drink container and add a few grams of fries in your slightly larger fries container. This going large, gets them 30p for spending around 3p in materials. However, over the period of one month with several hundred stores, this provides million of pounds for the chain of outlets.

    Yet another well know tactic is used by the supermarkets, you may come in for the milk and bread but leave with a box of chocolates and a bottle of wine, therefore intending to spend £3 and acutely spending £20. Most supermarkets make sure you have to pass the higher margin products to get to the essentials. Online stores are also becoming very good at this, especially Amazon, who provide recommendation and product placement based on your previous purchase, current search and seasonal trends.

    The loyalty card is yet another opportunity to make more from your current customers and coffee shops around the country, small and large have all now desperate to this. Providing you with a card, which them love to stamp and them offer you a free drink on completion.

    The cost of find new customers is high and therefore making sure you have an approach to make sure you can rely of this income is important for your business. Just 10% extra from each customer at this time is the difference from your business being average and being at the top of your industry when the recession finally ends.

    Take a look at what options you have today to make more from your current customers.

  • Do we need a knowledge or a skill’s economy?

    We hear the term ‘knowledge economy ‘ used by many people and this week I finally made a decision, its not good for us entrepreneurs. The essential facet of a knowledge economy is that focused on the production and management of knowledge. It means Universities can get paid to make new discoveries, without ever wanting anyone to use them.

    So lets take a look at history, Greek scholar named Pythagoras, who lived around 500 BC was also fascinated by triangles with these special side ratios and came up with a theory which we still use today. So the Greek’s had a knowledge economy. I don’t have to say how they have factored since taking the cheap finance available since joining the Euro. However, the development of knowledge itself does not bring prosperity, it’s the exploitation of it.

    The fact is, with a truly international economy and information sharing through the internet, knowledge is not an asset until you have the skills to use it. The frontiers of knowledge are only today’s and tomorrow we shall have new frontiers which make yesterdays knowledge redundant and obsolete. With more people on the planet the pace of this knowledge development increasing as the human race, races for more knowledge. How can you expect to win a race when you have over 6 billion people against you? Small countries do not have the man power or money.

    The answer is to master the skill of managing, exploiting and capitalizing the knowledge. Society needs to develop people who have these skills to transfer knowledge into successful enterprises.

    When I look at successful entrepreneurs, they develop industry knowledge, but never technical, they know the trends, but never the detail, they understand what works and what does not, but could not build any product themselves. The skill to adapt to whatever life throws at you is a skill we should all have and this skills needs to be learnt at every stage of education, even a university one.

    In a knowledge-based economy, knowledge is a tool. So if we are going to anything we need an knowledge-based economy with a population who have access to the knowledge and the skills to master it for our enterprising future.

    Pythagoras gave us a tool and we should never forget the skill of using it.

  • Multiple Sources of Incomes

    Don’t put your eggs in one basket is a saying I have heard time and time again, yet people don’t follow that up with don’t just work for one company. They sit there and say “get yourself a nice secure job” which in time becomes less secure and more of a daily grind.

    However, when I read what other people promote as multiple sources of income, at best I describe them as ‘schemes’ and worst ‘pyramid selling programmes’ aimed at making only one person rich and that’s the programme’s owner and not you. However, the premise is fundamental sound and therefore what should we do to ensure we take this good advice and invest it in our selves.

    As an entrepreneur, you won’t have only one customer, you want many, from diverse sectors or customer demographics which would allow you to maintain sales in any economic environment. This makes sense and I hope you are already doing this.

    So why not take this to the next level and own two businesses, in diverse sectors or customer demographics. These businesses could then ensure you a higher and more secure revenue stream. This I’m sure you would agree is a good strategy, however, it hard enough to keep one business going, never mind more than one. This is an important stage in the growth of an entrepreneur and many do not take this step from single to multiple business owner, the true definition of an entrepreneur.

    Investing time and money in businesses comes in many forms, as an entrepreneur you are doing this in a very hands on way. So if running the businesses yourself is an issue, then you could provide it in the form of an angel investor, pure stock investor or via the stock market. You could invest an amount each month which may be from your current cash flow.

    Multiple sources of income is about ensuring you invest in many opportunities, using time, money, effort, knowledge, network and the skills you have at your disposal. Use them wisely and you will soon have multiple sources of income based allowing you to be a true entrepreneur.

  • University Educators have to be Entrepreneurs!

    Every year fresh new students enter university, these young enthusiastic people begin the next stage of their lives. They totally understand that the rules are different, they are no longer at school, no longer living with parents, have access to their own money and meeting new and amazing people in a very vibrant community.

    The real trick for educators at this time of year is to facilitate this, develop this passion and ensure that it can be channelled in developing and progressing the student throughout the course.

    However, with cuts in the system, staff who no longer want to teach but still want to get paid and courses which do not contain any modern related content except for that dated pre Apple/Microsoft operating systems, the chasm between the student and the educator can quickly, in a matter of hours, become only too large for either side to see why they should bother.

    Equipping students for a life where they will change career four times, be in dept for most of their lives and develop relationships in virtual spaces first should be core to any persons education. Enterprising people by their nature adapt and create opportunities and we should only allow these types of people to focus our young.

    Enterprising Educators are needed to ensure we develop enterprising graduates. As with the best sweet shops these come in all flavours and sizes with no one appealing to all. So how do we do this?

    University educators should be part time and self employed, they should be entrepreneurs!

    This would ensure that the young of today are learning from the very people that are adaptable and able to able to create opportunities. A lecturer could still do research, run a business or provide consultancy allowing the creation of more dynamic teams within the university. Its their mindset we need our youth to engage with.

    University educators should also still work in the industry they teach. So if you are teaching math to engineering students, don’t get the professor of maths. His application of the subject will be purely theoretical and thus subject to doubt by the students. That doubt then generates mistrust which leads to our chasm.

    University educators should know how to add enterprise into every part of the curriculum. Learning comes from lectures, discussions, assignments and lab work. Each of these should be designed to develop the enterprise capability of the student, moving them forward in understanding how they will be contributing to society during the fruitful enterprising career for the next 70 years!