Cam’s New Groove
It’s certainly been awhile since my last post (Google dropped my page rank… I’m sorry Sergi and Larry! Forgive me!). Hopefully updates will be a little more frequent now that my life has settled down. Last year my businesses sucked up all of my free time (and then some) but I think all of our major projects are out of the way now. It’s will be nice to have some time to write.
But I’m not ready for a major post yet. You have to ease you way into these things. I’ll get something up later this week. The US economy seems to be falling apart and I’ve got a few thoughts on that.
-Cam
Filed under Catagory Shmatagory : Comments (5) : Feb 2nd, 2009
Blog Bog
In the world of business there’s literally something blog worthy every day, and it was my intention to blog at least once a week (I have failed miserably). I find time is exceptionally tight these days as I’ve taken on some new projects. I expect I’ll seldom post more than once every few months for the next year or so, but I’ll try to make the posts full of adventure, intrigue and romance. Uh… or not.
-Cam
Filed under Catagory Shmatagory : Comments (3) : Sep 25th, 2008
I Just Want to Fit In.
So you’ve come up with the perfect idea. You’ve given it copious amounts of thought and you’re certain it has viable business potential. You can easily envision yourself building a business around the idea and you are, to put it mildly, manically euphoric. Great start! What’s next? Easy- figuring out if there’s a market for your business and understanding the gentle art of cramming yourself into that market.
The Market: In this case “the market” isn’t a physical place. Rather it’s a idealistic representation of an economic cycle (i.e someone sells something, someone buys something, and so on).
Let’s say your idea is to sell some type of product: shoes (don’t scoff- visit Zappos.com). The question is simple: Is there a market for shoes in which you can sell the and a customer will buy them? One quick look around reveals that, yes, there is a huge market for shoes. The idea has “Cam’s Business Idea Approval” (that’s a CBIA for future reference).
Okay, that was easy. Now let’s complicate things a bit. What if you want to sell shoes with a type of new super sole you’ve developed? Is there a market for that? Looking around may not help as much in this case because (obviously) no one else is selling a shoe with as much soul as you (those puns just come out of nowhere). There is, as we have already noted, a strong market for shoes. If your product is part of a larger market and is better than existing products then there is a market for it. This is a great segway into…
Visible Advantage: This terms, as I use it, refers to anything that potential customers see as a reason to purchase from you as opposed to a competition. Lower prices, larger inventory, faster shipping, more articulate product descriptions, hot babes, anything that distinguishes you in some positive way from your competition. Generally your advantage comes from doing something better than others in your market. The idea of a visible advantage is incredibly obvious, but I’m floored by how often companies overlook or misunderstand this necessity.
Cam: Sure, I think selling ties could work. What’s your edge?
Client: We’ll have a website!
Cam: Okay. And what advantage will your website have over other tie websites.
Client: It will be on the Internet.
Cam: Oh… uh. Well, other websites that sell ties are online too.
Client: We’ll have Tomy Hilfiger ties. My brother wears them. He always says, “If it’s not a Tommy, it’s not a tie!” They’re popular.
Cam: Other competing websites will probably carry the same brands of ties. Is there anything unique you’re going to do to set yourself apart?
Client: Well, we’re going to sell a lot of ties.
Cam: Sigh.
Visible advantage is what allows a company to enter and succeed in an already crowded market. The result is simple: The market expands to accommodate the new business or the market remains the same and a company with no visible advantage goes under. You want to sell shoes? As long as you’re better than your competition in some way people will buy shoes from you. Once you can define your advantage and once the customer is aware of it you’re on your way.
Visible advantage is also what allows you to enter and succeed in an uncrowded market. If you’re the guy with the new shoe sole that that is your advantage. It’s your job to make sure the customer understands why your sole is better and why they need your shoe. When you focus on a small part of a larger market you’re working in a niche. A niche can be a an excellent visible advantage.
To recap: You have an idea. You identify your market and your competition. You build your business with a visible advantage over your competition. Angels sing your praises and you drive off into the sunset in a green Lamborghini. I can’t tell you that any of this is easy (those Italian sports cars are hard to drive!), but it’s straightforward, it’s simple and it works.
-Cam
A couple of thoughts that will be part of the next post:
This post is CBIA certified.
Filed under Catagory Shmatagory : Comments (3) : Sep 2nd, 2008
Comments? No.
Some hyperactive spam bots found my business blog (this blog, people). After deleting over three hundred would be spamments (spam + comments = spamment… no, not working, but you heard it here first) I shut off the option to leave comments. But then I compromised; if you create an account you can still post a comment. I figured very few blog spam bots would be interested in an account and it would derail their attempts to peddle junk here. So far, so good.
Been awhile since my last post. I have no good excuse except that when I work too hard to start to ooze a foul smelling pus. In order to avoid this I’ve been relaxing a little more than I used to. But I had the pus sack removed this past week and will be working harder than ever now. I’ve got a post coming up about how to fit in. Sorry- it’s not going to be a feel good story about a boy named Charlie who finds a way to make friends despite his speech impediment and stink pus. The post will have info about how to cram your business into an existing market place. Leave a web browser window open and keep clicking your refresh button.
Filed under Catagory Shmatagory : Comments (4) : Aug 25th, 2008
What’s the Big Idea?
So you want a business huh? You want to build the next Microsoft, become the next Donald Trump and marry the latest popular arm ornament. Where do you start? I’ve got a great idea- start of the beginning. Where’s the beginning? Hang on tight, becuase I’ve got the answer. The beginning is the idea.
As I talk with potential customers [*1] about running a store, the thing that frustrates me the most is that they want to start their business in the middle somewhere. Lunch conversations have literally gone like this:
Customer: How do I do order fulfillment- do you think UPS or FedEx is better?
Cam: What are you selling?
Customer: Well, my buddy makes these little wooden puppets that kids seem to like. But maybe that’s dumb. Maybe we could sell something else. Maybe wooden hats.
Cam: Well, it’s important to figure out what you want to sell.
Customer: We’ll probably go with the puppets. But it’s hard to get to get these things off the ground, you know? I mean how will we find time to do advertising?
Cam: Well, the first step is to decide what you want to sell.
Customer: Is advertising hard? Do you think we should use Google?
Cam: I’d say the first thing to do is decide what product you want to market.
Customer: Well, one thing I know- we’ve got to sell something good. I hope we can find a cheap place to rent for a store. How much does your store cost?
Cam: I hate you and you’re lucky this fork is plastic.
Times are tough now. You can’t simply announce that a great idea will be forthcoming and have venture capitalists begging you to take their money. From what I understand this was the case a few years back, and now companies built on the idea of an idea are completely gone. Nice work there. So let me drive this home again- you start your business by thinking of an idea.
The idea itself can be anything. Maybe you have the great idea for a world changing invention (way to go!). Maybe your idea involves buying some spiffy niche product wholesale and reselling it (works for me!). Or maybe you can provide some incredible service that everyone wants (make it free for Cam!). Lie in a hammock, brainstorm on paper, harass your friends- just find the idea.
Now you have to ask yourself an important and potentially uncomfortable question: Can i build a business around my idea? Let’s say you love pickle and jelly sandwiches. No one makes a better PJ sandwich than you! Maybe you should open a pickle and jelly sandwich shop, right? But in the nick of time you realize that no one else on earth will eat your sandwiches. Sometimes common sense is all you need for a business evaluation. Other times it takes a little more work. You need to churn your idea around. You need to imagine how a business could function around it. The idea has to be viable enough so that it can support an infrastructure of processes (processes are big- we’ll talk about them one day [*2]) to reach a desired goal (usually money!). And even after you figure out everything in your head, you may not know an idea isn’t viable until you’ve started working with it. We’ll go more into depth on that later.
So to recap: A business starts with an idea. Find an idea and ask yourself if you can build a business around it. That’s the first step [*3]. Now is not the time to figure out of your cousin Bubba is going to be a good customer service rep (”I just wish he knew English”) or if you should start planning your retirement. Begin with an idea and evaluate it’s business potential as best you can. Then you decide if it’s something you really want to do, something that will be within your ability range, something you can afford, and so on. We’ll get to that soon. If you want a business just start thinking of ideas.
-Cam
[1*] Potential customers for our ecommerce software, Blaze.
[*2] Processes are a fundamental requirement to achieve a successful business. Processes solve problems, create order and make you feel warm and fuzzy. I’ll be writing a section on developing processes in the future. This will be updated with a link when the post is done.
[*3] Yep, all my business started with an idea. “Can I sell knives on the Internet and make money?” worked out pretty well. “Can I pour lime juice into water, add caffeine, add the words “natural” and “power” and make a million dollars?” We shall see.
Filed under Catagory Shmatagory : Comments (9) : Jul 18th, 2008
Interview
Jake’s Wife, Megan, asked me to answer a few questions for her business class. I thought I’d post the questions and my answers here (you know, since it’s commerce stuff!).
-Cam
1. You
Name: Cameron Hughes
Age: 30
Hometown: Lehi, UT
Education: (high school and college) Meridian High School (graduated in ‘96). Attended BYU- three classes short of graduating when I decided to, for lack of a better word, “bail”.
Q. What did you graduate in?
A. I would have graduated in English. My plan was to attend Law School and practice law with my father. During my first pre law course I realized my plan wasn’t going to work out (I hated law).
Q. Did this major have anything to do with starting a business? Was it helpful and in what ways?
A. Not really- English and knife retail share very few commonalities. But yes, the English background was very helpful. Website content is extremely important and the English background gave me an edge in regard to what was readable, clear and engaging.
Q. Do you have any relatives who are entrepreneurs, and did they have an influence on your business?
A. Not a one!
Q. Did you have any other role models or mentors?
A. A friend of my wife’s family runs a business online selling model (i.e. cars and planes). I thought to myself, “If he can do it, then I can do it.” I talk with him from time to time to get business advice. Most of my inspiration comes from INC magazine- there are some excellent contributors that I admire a great deal.
Q. Did you have any business or self-employment experiences when you were young? How important were those experiences to starting your own business?
A. I was always into something. I was always trying to start some kind of business. Mowing lawns, babysitting, painting. I used to haul my sister’s toys down to the corner by our house and sell them to the neighborhood kids. I was big into eBay too (not so much anymore). All these experiences might be classified as “cute” now, but they really drove home the idea that it’s hard to work to start and run a business.
2. Your Business
Q. How did you spot the opportunity to sell knives, and how did it develop?
A. Originally I just collected knives. I found a couple of good sources to buy them and I’d get a dozen at a time. I could sell eleven on eBay and make enough so that I could keep the last one without being out anything. Pretty soon I was making enough extra that I acquired a small inventory and decided to build a retail website.
Q. What were your goals when you started? Did you picture being where you are today?
A. Originally I was just excited by the idea of having a piece of the Internet pie. It seemed incredible that I could pop something online and someone would buy it. Selling knives online seemed like a fad that I was lucky enough to stumble on. But after awhile I realized that what we had was a viable business and my goal shifted to growth. “How big can it get?” was the question foremost on my mind. I never imagined for a moment it would be anything like the business we have today.
Q. How did you evaluate the opportunity in terms of the financial requirements and income potential?
A. It didn’t take much to officially start the company so risk wasn’t a big factor. As long as we made more than we put in things were fine by me. Initially we didn’t take anything out of the business for ourselves- any profit was put back in to facilitate growth.
Q. How much capital did it take?
A. I borrowed $2000 from myself to get “a lot” of inventory.
Q. How long did it take to reach a positive cash flow and break even sales volume?
A. Our only expenses were advertising, website hosting and growth costs (buy more than you sell). We had these costs covered a month after our website launched.
Q. How did you finance your business? Did you use your own savings, family and friends, angels, banks, bootstrapping?
A. I used our personal savings. My wife was horrified. Since then we have used the bootstrapping technique.
Q. What are some pressures or crisis your business survived in the early periods of it?
A. There was a period early on where I had hired my first three employees and I thought I could let them run the business so I didn’t pay enough attention to the day to day operations. Sales suffered, cash flow became critical and I had to lay everyone off. I ran the entire business by myself for three months. It was pure hell.
Q. What was your family situation?
A. When I started the business it was just me and my wife. By the time the business could actually support us we had our first child. The crisis happened right around the same time as our second child came (stressful!). We have a third child now and sometimes I worry I’m not spending enough time with everyone. The business often demands more of me than I’d like to give.
Q. Did you find or have partners? Are there any attributes among partners or advisers that you would definitely try to avoid?
A. Originally I had a partner. Everything was supposed to be shared 50/50, but I ended up doing most of the work and eventually bought out his half of the company. As much as I hate to say it, try and avoid a partner if you can. If you are going to have a partner make sure it’s someone you can trust the way you would trust yourself. Advisors are fine, as long as they have your interest in mind. Too many of them, in my experience, have hidden agendas.
Q. Did you have a start-up business plan? If so, what were the basics of it?
A. Originally no. But once we realized we had a “real” business we did map out a basic strategy. It went something like, “Be the best, offer the most comprehensive product selection, offer the lowest price, offer the best service, provide the most enjoyable website shopping experience possible. Always buy products we think we can sell, always sell more more than we get them, take into account hidden expenses, do what’s best for the business.”
Q. What was your most triumphant/exciting moment? Your worst moment?
A.The most exiting thing that I can remember was the first time we broke a million in sales in one year (I think it was 2005). I think it will actually be more exiting to launch our physical retail store (next month) but I don’t know yet. The worst moment was working by myself (a long three month moment) and wondering if things were going to get better.
Q. What were the most difficult gaps to fill and problems to solve as you began to grow?
A. Order fulfillment was the biggest problem initially. Getting the product from our shop to the customer was an epic uphill battle. Hiring employees was pretty difficult (and we’ve hired some bad ones in our day) as well. The bigger we got the harder it became to assign roles to and manage everything (I’m a bit of a micro manager). The biggest problem we have right now is stock- we don’t have an effective enough way to manage inventory reordering.
Q. What are your plans for the future? Expand, Maintain, Harvest?
A. For the time being the focus in on getting thing running smoothly and continued expansion (like our retail store- into the local market we go!). My feeling is that if you’re not moving forward you’re moving backward. We have a slew of new websites we want to launch and the future looks bright.
Q. Have your goals for the business changed? How?
A. I have higher expectations for it than I did in the past. I think it’s capable of more so my goals are a little more ambitious in regard to growth, sales and product selection.
Q. Have your personal goals in life changed? How?
A. I don’t think my personal goals have really changed.
A. What do you consider your most valuable asset(s)–the things that enabled you to succeed?
Q. Relentless determination, hard work and a little bit of hardheaded ego get the business off the ground. But ultimately it’s having the right people by your side that determines if you’re going to succeed or not. A business operation is seldom a one man show.
Q. If you had to do it over again, would you do it again in the same way?
A. I honestly don’t know. Everything we did - good and bad- got us to this point. If I could go back in time and just do the good stuff I suppose I would, but ultimately (and I know this is a big cliché) the mistakes I’ve made have been a valuable help.
Q. What do you feel are the most critical concepts, skills, attitudes, and know-how you needed to get your company started and grow to where it is today? What will be needed in the next 5 years?
A. Well, the things I mentioned above. Also making sure everyone in a business is getting along is very important. We had one employee awhile back and he infected everyone with his depressive attitude- if the people in the business aren’t happy then the business isn’t happy. When it comes to business I get most of my know how from business books and magazines. Also, I reply heavily on the input of everyone here at work- if we make decisions as a group they are generally better (two heads are better than one). I’m not thinking five years ahead yet…
Q. What things do you find personally rewarding and satisfying as an entrepreneur? What have been the rewards, risks, and tradeoffs?
A. When I sit in the store look around it’s exciting to see my vision coming to life. It’s very rewarding when customers are happy or compliment the store, selection, service and staff. Building a business is kind of like playing with big Lego blocks. But not a day goes by without thoughts like, “What am I doing?” or “Is this really going to work?” There’s a lot of responsibility that rests on my shoulders and I’m not always comfortable with that. As I mentioned earlier sometimes I wonder if I’m home enough- I don’t want to sacrifice my family for the sake of “success.”
Q. Who should try to be an entrepreneur? And who should not?
A. I used to think anyone could do it. I don’t want to sound egotistical, but I don’t believe that anymore. If someone has a passion for something, if they are dedicated to it and have the means to make it in to a business they should give it a shot. But they need to be honest with themselves- if they can’t do it they should call it quits before it becomes a financial liability or an emotional black hole. There aren’t any rules about who should be and who shouldn’t be and entrepreneur.
Q. What advice would you give an aspiring entrepreneur? Could you suggest the three most important lessons you have learned?
A. Do something you like. If you enjoy your work you’re much more likely to success. Also surround yourself with the right people.
Lessons learned:
1) Work hard (and work smart).
2) Do what’s best for the business, not yourself (if everyone takes care of the business then the business can take care of everyone).
3) Hire people who are better than you. Put your ego aside and get the right people for the job.
Q. Would you be willing to be on an advisory committee for my business?
A. But of course. Make sure I don’t have a hidden agenda though!
Filed under Catagory Shmatagory : Comments (3) : Jun 11th, 2008
A Brief Overview and Welcome
This is my first post! It’s actually just the content from the “About Cam” page but I’ve ingeniously used it again here as a blog entry. Allow me to welcome you to my newest blogging venture: Cam on Commerce. I’m your host, Cam. I’ll be talking about- you guessed it (and if you didn’t then you may want to bail here)- Commerce!
I’m using this website as a venue to collect innformation I hope to use in a book one day. At this point the book doesn’t have a name or anything fancy like that. I’ll frequently make references to the “book” so you have to pretend that what you’re reading is printed material (and you you want to print out this blog you have my blessing).
Feel free to send me questions about ecommerce subjects- I’ll do a Q&A section for some posts (and then cleverly work the into my book to create the illusion of substance!). So, without further ado, let the “book” begin.
First things first: I want everyone to know who this book is for. Far too often people pick up a book and they scan page after page desperately hoping the book can help them. They buy the book, they read it, and discover that they are not the book’s intended audience (It turns out “Asymmetric Cellular Division” wasn’t about why AT&T and Cingular sucked).
This book is for anyone who has any interest in ecommerce (specifically geared toward smaller private endeavors- not things like Amazon). You may be curious about what running an ecommerce website entails. It may be your first time setting up a commerce oriented website or it may be your second or third (indicating you need this book). You may already be successfully running an ecommerce website (you still need this book, dammit). You may have a brick and mortar store and be considering and Internet presence. Again, it’s for anyone with any type of entrepreneurial ecommerce itch (not to be confused with a tick bite).
I try to cover anything relevant to small scale ecommerce. I start at the beginning with “the urge” (which is the initial idea that eats at you until you do something about it). We move onto product or service selection and competitive advantage. We work through creating an identity, building a website, creating a fulfillment framework and then cover advertising and website traffic. Finally we talk about what to do if success hits, what to do if success is MIA and touch on growth strategies and exit strategies. If this sounds dull go find yourself a comic with some pictures.
So what makes me qualified to talk about any of this? I have a computer, some spare time and can type pretty darn fast with only two fingers. Also, for the last five years I’ve been involved with the development of ecommerce software and I’ve started several websites (using that software) that are now multimillion dollar companies. I don’t mean to toot my own horn but if my claim to fame was that I’d spent the last five years eating oatmeal in a sensory deprivation chamber to achieve inner peace I might be the wrong guy to listen to. Toot toot.
About Me:
My name is on the front of this book. I’m not so self centered that it needs to be repeated here (after all it’s on the front cover of this book! Just getting myself psyched up- remember I said this was going to be a book). I’ve been programming since I was fourteen. Unfortunately I can’t program any better now. Luckily this book isn’t about programming, it’s about commerce, specifically ecommerce. I’ve been involved in commerce since I was seven years old. How about that?
My grandmother used to operate a health food store. For some reason I thought if I drew pictures of Grimace, the purple McDonald’s character of years past, hiding in the forest people would want to buy them. I put them for sale in the health food store. No takers. Not much later I got a copy of Print Shop for the Apple IIe and tried my hand at designing birthday cards. Nope. So I began printing out signs advertising my willingness to mow lawns for spare change. Nothing. Weeding? No. Babysitting? Nada. It wasn’t until I began hauling my sister’s toys down to the street corner and selling them to kids who were coming back from school that I found my calling. Retail.
EBay was thrilling for me. From the moment I learned of its existence I was an avid user and proponent. This was my first real experience with ecommerce. I sold anything I could get my hands on and became quite obsessed with the whole idea of Internet retailing. I decided at the early age of fifteen that my destiny involved some type of ecommerce retail business. I used eBay for years until one day I read something about webstore technology. How wonderful! I could bypass eBay, the seller fees, the non-paying bidders, the lack of control in my listings. I enlisted the help of a good friend and we created our first website for selling pocket knives (sell what you know).
Our original website was incredibly basic- we could showcase items and people could add them to a cart a checkout. We kept track of orders on a spread sheet and everything was a wonderful mess. We spent a considerable amount of time looking for more powerful ecommerce software but really didn’t have any luck. And then it hit us! We would build our own ecommerce solution and our website could be the perfect testing ground. People who actually used the ecommerce software they designed to run a retail Internet store! What a novel idea.
Filed under Catagory Shmatagory : Comments (5) : Jun 3rd, 2008