If you were one of the hundreds of affiliate relations
representatives, marketing executives, and others who marched onto the floor of the
Western Show with a dream, a vision of the future, but couldn't locate the partner to
share it, then this column is for you. We all know that the next round of innovators in
our industry is already charting the course of our broadband future. How can you be a part
of it? Ask yourself. Is pitching to industry veterans like John Malone the only way to go?
Answer. No! There are literally hundreds of other companies who could be interested in
your ideas. You just have to get out there and make it happen.
'Make it happen.' Sounds easy. Roll the dice; max out a few
credit cards and maybe with a little luck, you can make history. Hardly a realistic plan.
But in truth there are many effective, time-proven ways to turn a vision into reality.
This past summer I rifled through research books to beef up
this commentary with guiding wisdom about "new corporate ventures" and "the
relationship of the parent organization to the subsidiary." I figured that explaining
a "structural hole" would give my advice more weight. I was missing the point.
Cluttering this commentary with industry double-speak won't increase the value of insights
that my own company, Berkshire Marketing Group (BMG), has gained over time when it comes
to 'making it happen' - insights that are sure to have some application for your company
Number one. Start with a realistic and sound business plan.
One of the most powerful, and yet most risky attributes of entrepreneurs is their ability
to dream. Great entrepreneurs envision the future and make it reality. They understand
keenly the needs of their intended customers and can communicate them clearly. Master
builders are also fiscal conservatives. Conversely, the sheer will and drive of unseasoned
entrepreneurs can blind them to potential and, often fatal, flaws. So ask and answer the
tough questions before you proceed. Being adequately informed is the foundation upon which
all else is built. Furthermore you'll need to:
Build a strong network. Develop contacts from various cable
backgrounds. Get a Western Show convention attendees book and include in your database
every person you feel may help you accomplish your goals. Ask their permission to be
Appreciate your peers. Track industry announcements and
articles that quote your contacts. Send note cards recognizing each new accomplishment.
Building this strong network is a two-way street.
Recognize that reporters are people. Get familiar with
various writers by their bylines. Do not oversell, or you run the risk of looking like an
opportunist. Thank them for any press mention, even if your message was taken slightly out
of context. Value their time and efforts.
Solicit advice. Utilize your database of contacts and find
a coach you can bounce ideas off. Listen to this expert's advice even if it conflicts with
your own. But always be decisive in the decisions you make because ultimately you alone
are responsible for them.Accept that honesty is the best policy. Throughout the process of
looking for a deal, these contacts may inquire about the status of your project. Always
answer truthfully, but let your closest advisors know when you hit rough seas. They will
usually rise to the occasion by providing you with timely assistance.
Never set "imaginary" deadlines. Don't impose
imaginary deadlines on your business plan. Don't stand on the floor of the convention
center and announce that your independent start-up cable network will launch in the fourth
quarter if that's not in the cards. Locking in a start date may create false momentum, and
sophisticated investors might use it against you.
Letters of intent. Document interest from funding sources
or potential partners. These letters will help you tell your story in related pitch
meetings. If a company says it's interested, but doesn't write it down in document form,
chances are its time to move on.
Establish the rules. Deals generally involve a number of
fringe players who each have a vested interest in the outcome. Speak as one voice, through
one person. Otherwise you'll weaken your position and confuse the other side with a number
of varying opinions and interpretations.
Hire an attorney. It may be in your best interest to draft
the agreement. If the other side's contract reflects differing interpretations of the
verbal agreement, it may be difficult, if not impossible, for you to negotiate any
troublesome provisions out of the deal. But don't accept my advice on face value. Always
check with your own attorney on how best to proceed.
Trust your instincts. As you may have already discovered,
business people all negotiate differently. Move slowly through the negotiation process and
learn more about your potential partner's personality. If you become uncomfortable during
the negotiation, it may be wise to suspend talks until you get a handle on your
suspicions, or cancel altogether. Troublesome indicators may signal a personality clash
that might eventually hamper your ability to execute your vision properly.
Delay saying yes. When receiving an offer or counter
proposal do not immediately accept or reject it. Take time to study the ramifications of
each proposal before you reply. Avoid retracting a misspoken word.
Jurisdictional issues. Insist that the contract is in force
under your own state's laws, otherwise, in case of a breach of contract, you will be the
one racking up the out-of-state legal bills. Walk away if the other party proposes that an
arbitrator is to mediate contract disputes. Pay close attention to this and other
jurisdictional issues; they can be deal breakers.
At Berkshire Marketing Group we've always followed these
guidelines when exploring business opportunities and when trying to make things happen.
We've terminated talks when a company's intent did not measure up to our own. Like most
small businesses, we cannot ignore opportunity when it knocks, but experience has taught
us that it is better not to compromise one's beliefs. Coincidentally, during the writing
of this column, and with these provisos in bold relief, a significant deal for us took
Rareties-Exchange.com (RE.com) based in Knoxville TN, a
just launched (DATE) auction format television home shopping network specializing in
highly collectible and rare products, passed the first test. They started with a realistic
and sound business plan. When we looked around we believed that RE.com had a strong chance
to succeed as an independent -- even in an industry of giant conglomerates -- for the
following reasons: RE.com understands its customer demographics, and the network's unique
product lines makes sense in tomorrow's narrowcasted environment. Couple this strategy
with a planned auction web site, one that will contain product depth and expert
information, and that may position Rareties-Exchange.com as the cable industry's future
Onsale.com ($89.0M annual sales and $288.9M market cap 10/98). We figure that's not a bad
place to be, so we started to talk.
As our discussions with Rareties-Exchange.com intensified
we encountered the occasional impasse and roadblock. But both sides stayed committed to
bridging the differences, and in the end a seed had been planted. Through compromise we
developed a shared understanding of mutual needs and missions.
Now while no crystal ball can guarantee that
Rarities-Exchange.com will be a runaway success, our comfort level has been satisfied and
that is sufficient for the moment. Actually, because of how this agreement came together,
I no longer think of cable operators as entities that ought to be more proactive in
soliciting and funding new visionary businesses. If MSO investment capital is not
available to budding entrepreneurs, then start-ups should embrace the challenges of
For now Rarities-Exchange.com and BMG are going to give it
a try. Our new partnership (perhaps "enhanced vendor" relationship is the more
appropriate phrase) is no Lee Masters or Geraldine Laybourne deal, but that has not
dampened our enthusiasm. Opportunity comes in all shapes and sizes, and those legendary
success stories we'd all like to be at the center of often emerge from the least expected
So remember: establish your guidelines and link them to a
sound business plan. With hard work, and a little luck, at next year's Western Show one of
those announced deals could be your own.
Michael Kokernak is Vice President of new business for
Berkshire Marketing Group, a strategic marketing and communications firm with offices in
Boston, Lenox MA and Troy NY. He can be reached at Michael@bmg-boston.com