Rivers of London by Ben Aaronovitch infuses magic into the police procedural. The narrator is Peter Grant, a young London Metropolitan Police Constable newly apprenticed to a wizard. It’s a strangely compelling read that I could not put down until I finished it.
The novel is deeply rooted in the day to day realities of policing modern London and offers humor and a number of twists. Because the narrator is only an apprentice magician he understands some of the hows for performing magic but little of the why so he is conducting three investigations in parallel: the first is to understand not just the surface skills needed for magic but the real mechanisms for spooky action at a distance, the second is to find a way to resolve a dispute between a number of powerful river spirits, and the third is to uncover the real culprit behind a series of assaults and murders.
Michael Fern, Edith Harbaugh, Steve Hogan, and Sean Murphy discuss the Innovator’s DNA experimenting skill.
Tristan Kromer joins Steve Hogan and Sean Murphy to discuss networking as a key skill to develop to foster innovation.
Sarah Gray, Ethan Thorman, and Mark Cook join Steve Hogan and Sean Murphy to discuss lessons learned asking questions to foster innovation.
Panel sessions Feb 22, 2012 on Innovator’s DNA Skill #1 Associating. Terry Frazier of Cognovis, Steve Hogan of Tech-Rx, and Sean Murphy of SKMurphy. Part of the Book Club For Business Impact covered lessons learned applying a number of techniques for associating from chapter 2 of the “Innovator’s DNA” by Jeff Dyer, Hal Gregersen, and Clayton Christensen.
Steve Hogan and Sean Murphy walk through a five part webinar series on “The Innovator’s DNA” by Jeff Dyer, Hal Gregersen,and Clayton Christensen. Sean thinks it’s the best book on innovation and entrepreneurship for 2011 and useful for any team that is trying to innovate. Each webinar will be in a roundtable format and include first time entrepreneurs and experienced innovators discussing lessons learned applying the five key discovery skills described in the book.
I have started to reserve Sundays to write on spirituality, charity, and a higher moral purpose to our life as entrepreneurs. I was struck by the quote that Stephenson puts in Juanita’s mouth in Snow Crash and have concluded that he is performing a similar ministry in his science fiction writing. There is a sense of wonder and meditation on “some power like grace, like the Force, or Providence, or what-have-you, that had been at work in the world today” (from Zula’s reflection on the events of Reamde)
Q: Can you please take a look at this pitch. I have created it as a promo for investors and potential users.
Selling your offering to customers and selling your business to investors requires two different presentations They have fundamentally different questions they need answered before they “buy.”
Customers want to understand how your product will meet their needs. Investors want to know how much their investment will return and why: they may want to understand your customer presentation but only if you cannot offer strong evidence of traction: revenue, signups, etc…They are always interested in what you have learned and what you plan to learn: what hypothesis you need to test using their money.
In B2B markets early business customers may be interested in your investment pitch if they believe you will need investment to be viable but that is rarely the case in a consumer market.
The major components of an elevator pitch are traction, product, team, and social proof. And investors care about traction over everything else. A story without traction is a work of fiction.
Traction is a measure of your product’s engagement with its market, a.k.a. product/market fit. In order of importance, it is demonstrated through:
- pilot customers
- non-paying users
- verified hypotheses about customer problems.
And their rates of change.
Pitching Hacks is a slim 83 page book that packs a lot of insight. Many longer books have a good 4-5 page magazine article trapped inside, this book has already been boiled to the essentials. Definitely worth $20 if you are wiling to follow at least one of the many pieces of advice in the book.
You can follow @skmurphy to get these hot off the mojo wire or wait until these quotes for entrepreneurs are collected in a blog post at the end of each month. Enter your E-mail address if you would like have new blog posts sent to you.
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“There is no distance on this Earth as far away as yesterday.”
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“Talent hits a target no one else can hit; genius hits a target no one else can see.”
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“The shrewd guess, the fertile hypothesis, the courageous leap to a tentative conclusion–these are the most valuable coin of the thinker at work. But in most schools guessing is heavily penalized and is associated somehow with laziness.”
Jerome S. Bruner
I used this as the closing quote for “Early Markets Offer Fluid Opportunities”
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“Good design successfully manages the tensions between user needs, technology feasibility, and business viability.”
From an interview in “Imagine Design Create”
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“The secret to success is constancy of purpose”
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“The right way to build a company is to experiment in lots of small ways, so that you have plenty of room to make mistakes and change strategies.”
Vinod Khosla quoted in “What Does Vinod Khosla Know About Web 2.0 That Others Don’t?” (2005)
Used as closing quote in “Making Our Business More Credible in 2006”
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“A reputation for good judgment, for fair dealing, for truth, and for rectitude, is itself a fortune.”
Henry Ward Beecher
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“Don’t save the canary. Fix the coal mine.”
Seth Godin in “Canaries and Coal Mines“
This is not the best line in the blog post, it’s “My own little Potemkin Village” which highlights Godin’s insight into the perils of celebrity.
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“Innovation is fostered by information gathered from new connections; from insights gained by journeys into other disciplines or places; from active, collegial networks and fluid, open boundaries. Innovation arises from ongoing circles of exchange, where information is not just accumulated or stored, but created. Knowledge is generated anew from connections that weren’t there before.”
Margaret J. Wheatley
h/t Valeria Maltoni
Used as closing quote in “Byron Wien’s Lessons Learned in 80 Years: Seven for Entrepreneurs.”
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“Before you can score you must have a goal.”
Used as the title for “Before you can score you must have a goal.”
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The days you work are the best days.
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“Nothing happens to you that has not happened to someone else.”
I really liked William Feather’s 1949 book, “The Business of Life.” It’s a collection of short notes, letters, newspaper columns magazine articles. Very insightful, and something like reading a blog from the 1930?s and 40?s. I used it as the basis for four blog posts:
- “William Feather’s ‘The Business of Life’“
- “More from William Feather’s ‘The Business of Life’“
- “William Feather on Perseverance Rewarded“
- “William Feather on ‘Dead Business’“
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“I like breakfast-time better than any other moment in the day,” said Mr. Irwine. “No dust has settled on one’s mind then, and it presents a clear mirror to the rays of things”.
George Eliot in Adam Bede (1859)
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“When you struggle to reach for something you don’t know, that’s where most of the interesting stuff is.”
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“Expect nothing. Live frugally on surprise.”
Added as part of a July 2013 postscript to “Good Fortune.”
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“Look around. Find the stories that are the ones that one day, you’re going to wish somebody had told sooner. Tell them.”
Scott Rosenberg (@scottros) in Missed stories: About that Horace Mann School article in the Times
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Used as the closing quote for “Christopher Moore’s Coyote Blue.”
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“Sometimes when you start losing detail, whether it’s in music or in life, something as small as failing to be polite, you start to lose substance.”
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“To select well among old things is almost equal to inventing new ones.”
Nicolas Charles Joseph Trublet
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“What is the quality of your intent? Certain people have a way of saying things that shake us to the core. Even when the words do not seem harsh or offensive, the impact is shattering. What we could be experiencing is the intent behind the words.”
Used as the opening quote for “Advising Entrepreneurs”
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“It is too late now for earlier ways;
now there are only some other ways,
and only one way to find them–fail.”
William Stafford excerpt from “Level Light”
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“The point of a notebook is to jumpstart the mind.”
John Gregory Dunne
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“One startup’s earlyvangelist is another enterprise’s intrapreneur.”
It’s taken me a while to recognize this duality. I think “change agent” is an equally useful term for intrapreneur.
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“There is a difference between knowing a thing and understanding it.
You can know a lot about something and not really understand it.”
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“I try to do the right thing at the right time. They may be just little things, but they usually make the difference between winning and losing.”
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Great advice. I used this quote in “Christopher Moore’s Coyote Blue.”
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“True deception goes unnoticed.”
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“‘Fortune favors the bold,’ but only if they are playing a game they thoroughly know.”
I think Grafe adds a useful qualification to Virgil‘s “Fortune favors the bold.” (line 284 of Book 10 of the Aeneid: “Audentes fortuna juvat.”)
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The need to be right all the time is the biggest bar to new ideas.”
Edward de Bono
h/t Jabe Bloom (@cyetain)
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“Try to be one on whom nothing is lost.”
From his essay “The Art of Fiction” James advises:
The power to guess the unseen from the seen, to trace the implication of things, to judge the whole piece by the pattern, the condition of feeling life in general so completely that you are well on your way to knowing any particular corner of it–this cluster of gifts may almost be said to constitute experience. […]I should certainly say to a novice, “Write from experience and experience only” […] and “Try to be one of those people on whom nothing is lost.”
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In his author’s note he writes:
Do you ever get the feeling that forces unseen are messing with your life? Yeah, me too. And there is little doubt that those forces are driven by the greatest force in the universe — irony, right? Right?
So imagine my surprise when, some years ago, while I was researching a book on demons, I kept running across references to tricksters, and one trickster in particular, the trickster god Coyote. I thought, Heres a god whose main function seems to be acting as an agent of irony — the special prosecutor of Murphy’s Law, if you will. And, I figured, if ever there was a time during which the god of irony seemed to be testing his powers that time would be now.
What entrepreneur has not been at least indicted by the “special prosecutor for Murphy’s Law?”
Here are a few excerpts
“When everything is right with you, but you are so worried that something might go wrong that it ruins your balance, then you are Coyote Blue.”
Those of us with a firm grasp of contingencies are familiar with the uneasy feeling that “things are going too well, I must have overlooked something.” Startups are often well served by having at least one member of the team with this attitude, although–like cayenne pepper or wasabe–a pinch or two is often enough to season an elephant’s worth of stew.
“There are those who, deprived of physical beauty, develop a sincerity and beauty of spirit that seems to eclipse their appearance. They marry for love, stay married, and raise happy children who are quick to laugh and slow to judge.”
Good advice for many technical entrepreneurs and–in hindsight–my plan of record as well.
“Before the television arrived Samson did not know he was poor. Now he spent every evening piled in the front room with his family watching people he did not know do things he did not understand in places he could not fathom, while the commercials told him he could be just like those people.”
I gave up my television a few years ago and was surprised at how much more time that I had. Last month I spent two days in bed in a room with a television and after I finished the book I had brought with me, “No Way In” by Richard Fernandez, I spent an hour or two getting re-acquainted with how Samson feels in this passage. Many firms appear to be hard at work to port this same experience to the web. More’s the pity.
“The ostentation of the casinos did not create a desire for money; it made money meaningless. There were no mortgages in a casino, no children needing food, no car needing repairs, no work, no time, no day, no night; those things–the context of money–were someplace else. A place where people returned before they realized that a turd rolled in rhinestones is a turd nonetheless.”
Other web firms are hard at work to bring this experience to the web. Please apply your talents to another problem.
“He followed the signs down the surface streets lined with pawnshops, convenience stores, and low-slung cinder-block buildings under neon signs that proclaimed, CASH FOR YOUR CAR, CHECKS CASHED HERE, MARRIAGES AND DIVORCES–TWENTY-FOUR-HOUR DRIVE-THRU WINDOW.
Coyote said, “What are these places?”
Sam tried to think of a quick explanation, but was too weary from lack of sleep to tackle the concept of Las Vegas in twenty-five words or less. Finally he said, “These are places where you go if you want to fuck up your life and you don’t have a lot of time to do it in.”
“Are we going to stop?”
“No, I seem to be fucking up at a fine rate of speed, thank you.”
Bootstrappers often feel this conflicted when they think about reaching out to a venture capital firm.
“That’s the scary thing about hope, if you let it go too long it turns into faith.”
In the end making the leap to an entrepreneurial venture is hope that persists into a leap to faith.
It’s time for another summer reading list, this year I am focused on ecosystem models: systems thinking informed by biological metaphors.
One peculiarity of this age is the sudden acquisition of much physical knowledge. There is scarcely a department of science or art which is the same, or at all the same, as it was fifty years ago. A new world of inventions—of railways and of telegraphs—has grown up around us which we cannot help seeing; a new world of ideas is in the air and affects us, though we do not see it.
Writing in 1872 Bagehot sees a rapid transformation of the arts and sciences by new transport and communications technologies. I think too often we think of the Internet, or the integrated circuit as the kickoff for accelerating progress. But writing 140 years ago Bagehot witnessed the changes that the telegraph (e.g. first telegram had sent by transatlantic cable in 1858) and the steam engine had wrought.
From the last paragraph of the second chapter “The Use of Conflict”
The military habit makes man think far too much of definite action, and far too little of brooding meditation. Life is not a set campaign, but an irregular work, and the main forces in it are not overt resolutions, but latent and half-involuntary promptings. The mistake of military ethics is to exaggerate the conception of discipline, and so to present the moral force of the will in a barer form than it ever ought to take. Military morals can direct the axe to cut down the tree, but it knows nothing of the quiet force by which the forest grows.
As entrepreneurs we value self-discipline (if only in the ability to chart our own course), fast decision making, and bold action. But, as Bagehot argues, there is also value in thoughtful reflection, quiet exploration and experimentation, and slower but more deliberate decision making.
It’s an interesting book that traces the need for a robust military to enable any society–especially an early or primitive society–to survive against the depredations of neighboring societies. But Bagehot is clear on the need for cooperation and collaboration for any one individual to survive much less thrive. An excerpt from the final chapter “Verifiable Progress Politically Considered”
The progress of MAN requires the co—operation of MEN for its development. That which any one man or any one family could invent for themselves is obviously exceedingly limited. And even if this were not true, isolated progress could never be traced. The rudest sort of cooperative society, the lowest tribe and the feeblest government, is so much stronger than isolated man, that isolated man (if he ever existed in any shape which could be called man), might very easily have ceased to exist. The first principle of the subject is that man can only progress in ‘co-operative groups;’ I might say tribes and nations, but I use the less common word because few people would at once see that tribes and nations ARE co-operative groups, and that it is their being so which makes their value; that unless you can make a strong co-operative bond, your society will be conquered and killed out by some other society which has such a bond; and the second principle is that the members of such a group should be similar enough to one another to co-operate easily and readily together.
“Entrepreneurs who undertake uncertain initiatives face a wide spread between desirable and undesirable outcomes, but they cannot quantify the odds they face or even fully anticipate the possible results. The uncertainty is irreducible to the degree it cannot be resolved without actually undertaking the initiative by prior testing and research.”
Testing and research can reduce the ambiguity and uncertainty associated with the entering new markets but they cannot eliminate it. A few hours on Google can save you a few months pursuing an opportunity that a little more research might have indicated was a non-starter but even there I think you are still well served by a dozen conversations with people who have direct knowledge of the problem: there is an important category of information that has not been written down (yet) and cannot be found in Mr. Google’s basement.
If you attack a large and well established market there is much less uncertainty but there will be established competitors.
“Serving niche markets not only allows entrepreneurs to start a business with limited funds, it also limits the competition they face from well capitalized entities. Established corporations and professional venture capital funds expend considerable resources on evaluating and monitoring their investments. They tend to avoid investments in niche opportunities whose profit potential isn’t large enough to cover their fixed evaluation and monitoring costs. Therefore, the bootstrapped entrepreneur in a niche market faces direct competition mainly from other undercapitalized businesses.”
But larger well capitalized firms normally avoid ambiguous markets because they can earn more certain returns in established markets and they are less deterred by the idea of competing with other large firms.
Ambiguity is known to be missing information or not knowing relevant information that could be known.
The key ambiguity to resolve is to develop a model for the impact of your product on your prospect’s business–the costs you are imposing and the value of the benefits that you are delivering–as a way of fine tuning your feature set, messaging, and business model. You may need a slightly different one for each niche or customer segment you are considering. This gets updated the more you learn in exploring the market. This approach is “outside in” where customer reality drives your decisions.
One way to choose a new market is to pick a space that has not changed in a while. It’s more likely that you can learn something that the incumbents have either ignored or decided not to pursue because it would conflict with a currently successful business model.
Promising startups cluster in market niches characterized by high uncertainty generated by technological, regulatory, or other such exogenous changes or by the amorphous nature of customer wants. High uncertainty and low capital and opportunity costs create a “heads-I-win-tails-I-don’t-lost-much” proposition for entrepreneurs.
This is a second approach, to look for markets likely to be impacted by new technology, new regulation, or changes in the zeitgeist. By making small bets you can risk little but potentially find a significant opportunity.
I came across a great essay on insight, “Behavior and development as a function of the total situation (1946)”, written by Kurt Lewin in a collection of his papers published as “Resolving Social Conflict & Field Theory in Social Science.” Here are some excerpts and commentary:
These three books contain a wealth of useful suggestions for generating innovative business ideas from observing, questioning, and networking with customers and others:
- “The Innovator’s DNA” by Christensen, Dyer, and Gregerson outlines a set of five skills that innovator’s use to develop entrepreneurial ideas: questioning, observing, networking, experimenting, and associating. They offer a number of suggestions for how to cultivate these skills. But even their formulation assumes a fair amount of iteration as candidate ideas are developed, tested, recombined to create novel value.
- “Customer Visits” by Edward McQuarrie goes into extensive detail about techniques and strategies for interviewing business customers not only to refine existing offerings but to identify new product opportunities.
- “Innovation and Entrepreneurship” by Peter Drucker suggests that you develop innovative business ideas by searching for changes that have already occurred but where the full effects have not been felt. In particular in “Innovation and Entrepreneurship” he lists seven sources for innovative ideas in decreasing order of importance:
- The Unexpected (e.g. unexpected success or failure of an existing product or service)
- The Incongruous
- Weak Link In Existing Process
- Industry Or Market Structure Change
- Demographics: Size, Age Structure
- New Zeitgeist: Perception, Mood, Meaning
- New Knowledge
Related Posts on Developing Innovative Business Ideas
The book draws it title from the need for entrepreneurs to broaden their planning beyond a narrow focus on execution (“what does it take to deliver the right innovation on time, to spec, and beat the competition”) to include an understanding of
- Co-innovation: Who else need to innovate for your innovation to matter.
- Adoption Chain: Who else needs to adopt your innovation before the end customer sees the full value proposition.
Adner outlines three broad phases for the development and delivery of innovative products:
- Seeing the Ecosystem: which requires you to identify both co-innovation and adoption chain risks.
- Mapping the Ecosystem: which requires that you map the value blueprint (the activities that must take place outside of your firm for value to be created for your customer) and understand if you would have first mover advantage.
- Reconfiguring the Ecosystem: consider what existing elements can separated, combined, relocated, or subtracted and what new element can be added. Develop a plan for the evolution of your new ecosystem that comprehends:
- Minimum Viable Footprint (MVF): the smallest configuration of elements that can be brought together to create unique commercial value. Note that this differs from an MVP in that it includes co-innovation and adoption chain needs.
- Staged Expansion: the order to add elements to the MVF so that each new element benefits from the system already in place and increases the value creation potential for the next element planned.
- Ecosystem Carryover: can you leverage elements from a current ecosystem to enable the construction of a new ecosystem.
Insights from De Tocqueville’s “Democracy in America” chapter on “How Americans Combat Individualism by the Principle of Self-Interest Rightly Understood”
We offered a Book Club for Business Impact webinar on Sep-4-2012 that addressed “Lessons Learned Implementing The Great Demo Methodology” based on the Great Demo! book by Peter Cohan. We had two change agents join us on the panel: Barry Nelson and Jolie Rollins and our intent, consistent with the Book Club’s promise, elicit actionable insights from the panel informed by the book’s content.
Here is the audio track
Or download directly from Implementing Great Demo Methodology 9-4-12 (MP3)
Here is all of the relevant text from the slides with the addition of questions asked by the audience as they were posed to the panel.
- Barry Nelson, CEO, FactorLab, Inc.
- CEO, FactorLab, Inc. FactorLab helps teams engage in the good practices that give them a competitive advantage. Helped over 100 organizations- bridge the gap between good processes, good people and good execution
- Jolie Rollins,, Consultant Healthcare Information Technology (HIT) and Change Management Leader.
- Prior management roles at gloStream, Allscripts, Misys, and Medic; BA Accounting, North Carolina State University
- Organizer: Sean Murphy, SKMurphy, Inc.
- CEO SKMurphy, Inc. Consults on technology market creation and new technology product introduction. Earlier at Cisco, 3Com, AMD has BS Mathematical Sciences, MS Engineering-Economic Systems, Stanford University
- Moderator: Peter Cohan, The Second Derivative
- Founder, The Second Derivative. Provides sales training with a focus on “Great Demo!” method. Prior executive roles at Symyx Discovery Tools, Elsevier, and MDL Information Systems. BS Chemistry University of California at San Diego
Overview of Great Demo! Method
- A Great Demo: Do the Last Thing First!
- 2 Types of Demos
- Technical Proof
- Vision Generation
- Key Steps in Great Demo
- Introduce – Summarize Situation
- Do It – Do The Last Thing First
- Q&A: Peel Back the Layers
- Preparing For a Demo: Agree on Customer Situation (“Situation Slide”)
- Job Title and Industry
- Critical Business Issue
- Specific Capabilities Sought
- Delta over Status Quo
- Time Frame / Impending Event
Questions that panel addressed:
- Q: You mention win, loss, and “no decision.” What is your definition of “no decision” and why is the “no decision” rate important?
- Q: What is a critical business issue?
- Q: What are good questions that uncover specific capabilities sought and time frame for decision?
- Q: What was a key challenge you had to overcome to implement the Great Demo! methodology at your company?
- Q: Is it easier for startups before they have customers?
- Q: How do you convince startup engineers to discuss only a few cool new features?
- Q: How do you get entrepreneurs to focus on the customer in a demo and not the product?
- Q: What bad demo habits are the hardest to get rid off?
- Q: What good demo habits are the most important to develop?
- Q: How do you handle it when someone says “I’ve been selling/doing demos for a decade, you can’t tell ME how to do them!” ?
- Q: What’s the best way to respond to “I already know this, I don’t need training!” ?
- Q: How do you change someone’s mind when they say ““This demo is too critical to try out something new…” ?
- Q: Final take away from each panel member
- Q: We see other startups creating short 60-90s animations to explain their product, any thoughts on this?
- Q: How do you use this method at a trade show when many demos are blind dates? You have to be assessing prospect’s situation in parallel with giving the demo?
- Great Demo! offers a lean approach to sales and presentations
- “Worry About Scaling After You Find Your Niche” covers the “Situation Slide” formulation to guide pre-demo discovery of customer needs.
Peter Cohan’s next Great Demo Workshop in Silicon Valley is October 10-11, 2012.