The Directive most read articles reveal business strategy reader interest in social media, hot business topics

I started The Directive in May 2009, and at the end of 2010, I thought I'd take a look at the statistics for the articles I've written to see what business strategy readers are most interested in. Granted, just clicking on the article doesn't show reader interest in the article (it shows they're interested in the headline), but it's still a valid metric to analyze.

Article #1: Eight mistakes to avoid on LinkedIn

This took me by surprise a bit, but I guess it shouldn't. The use of social media has gone from the sidelines to the mainstream, and professionals want to better learn the use of these systems. In fact, written in July 2010, this was my all time highest read article since I started because of multiple linkages and re-tweets by the readers. Another one of my social media articles also made the top 10 most read. That one was about the awkwardness of social media and how to deal with it.

Article #2: Is HP's CEO, Mark Hurd, stifling innovation?

I've mentioned this before, this was the very first article I wrote here. At the time, Mark Hurd was the darling of Wall Street, but I thought his strategies would catch up with him and I did some analysis of HP's R&D expenditures against Apple and IBM. People didn't respond to my criticism very well at the time, and I got some "hate mail" as a result. Fast forward over a year later, and Hurd got fired by the HP board because of an alleged relationship with a consultant, and soon everyone on Wall Street was wondering whether he was fired because of his poor judgment in his strategies, especially his lack of focus on R&D. My article got picked up by IT Business Edge, and suddenly I was celebrity! (well, not exactly, but the article continues to get massive search engine hits)

Article #3: More than hierarchy, organizational structures reflect corporate values and… hidden problems

I wrote this in September 2009 when I was working on organizational development with a client, and every single point here had come up with the client, so I threw the article together without much editing. It has been one of the highest read articles through search engine hits ever since (it was the second most read article in 2009). This goes to show companies continue to struggle with the proper organizational structure, which isn't too surprising. I can't remember ever working with a client who needed revenue growth and market expansion help while having a squeaky clean organizational structure.

Other articles of note:

Apparently a lot of people are still interested in Starbucks' debranding efforts as I continue to get search engine hits and comments from the article, "Starbucks debrands for market expansion."

My article on intellectual property audits hit a raw nerve for LinkedIn readers. I posted the article, "How do you know your intellectual property licensees are not duping you? Get familiar with royalty audits" on a few LinkedIn groups - and the discussions kept coming.

Last but not the least, another article that hit some raw nerves in the electric utility circles was "Smart grid dynamic pricing: behavior change easier said than done." I was asked to write an article for the Smart Grid portal of ITExpo, and I wrote this and posted it on some LinkedIn groups. The topic thread continued to be discussed for the next 10+ weeks, and was referenced by several other websites. This may well be my highest read article but I don't have the statistics for the ITExpo website (they don't publish the specifics, but I've been told they get over 3 millions hits a month). This article is about electric utilities changing their flat pricing model to time-of-day usage model, and I didn't think the utility players had thought out the market well enough. Pink elephants in the room are not easy to talk about, but somebody's gotta do it!

I hope to continue bringing you topics of interest relevant to business strategies, product innovation, and everything in between. If there are any topics the readers want me to discuss, please let me know. There are no promises that I'll do so, but it's good to know what you'd like to read.

Happy Holidays from Kat Shoa

2010 is a wrap! And it turned out to be a great year for Kat Shoa Consulting. With several highly strategic engagements in hot markets such as Hosted Unified Communications, Smart Grid, and with environmental organizations, I'm excited to have been part of the growth and turnaround for several of my clients in a continually difficult economic climate.

By definition, strategic activities embody long-lead initiatives that don't always show immediate results. But I'm particularly pleased by the relatively immediate outcome of my work with two clients. One with which I was involved to expand the service portfolio, build up the revenue generating organizations, and completely reposition and re-brand the company which resulted in the client targeting deals that are 10 times or more larger than their average base. And another where a complete strategic repositioning and change of mission resulted in the development of a new identity and market recognition for the organization (I continue to work with this client and expect major results in 2011).

I was also honored to have been invited to moderate several industry panels in mobile media and wireless and Smart Grid for the Smart Grid Summit, ITExpo, and UCLA WINMEC.

Most of all, I truly enjoy using The Directive as the platform to communicate my business philosophy, and interact with my readers here (although I don't write as regularly as I'd like to). As a result of this, I was asked to write multiple Smart Grid articles for the ITExpo Smart Grid portal, and many of my articles were carried by various online forums.

Particularly delightful for me was IT Business Edge's recap of my analysis and criticism of HP CEO, Mark Hurd's strategies over a year after I wrote about it (I know I'm patting myself on the back here, but it's a good read).


With this, I want to thank you, my readers, for your continuing support and involvement with The Directive. You provide the energy that's required for me to keep coming back here. And I appreciate that.

All my best!

How to set up your company to attract investors and outside sources of funding: VCs, angel investors, private equity funds

About seven or eight years ago, I had a client with such interesting patented technologies that I was willing to invest in the company, do away with my practice, and run the company through what I thought would be massive growth. Before I did that though, I decided to consult a private equity attorney to help me through the process, and what I learned during those discussions was invaluable for myself and for many of my future clients.

I’ve been talking to many companies lately who are looking for investments to grow their companies, and after attending (yet another) VC event yesterday, and talking to companies looking for money there, I thought an article about this topic was in order. 

As a backgrounder, it's important to know that angel investors typically spend around $1-3M on new ventures. VC investments typically range from low single digit millions to low double digit millions. Anything above that is typically private equity territory, where they look for much more established outfits, rolling up geographically diverse companies, etc., and they will invest up to billions. Most early stage investors look for 5-10X return over 3-5 years, equivalent to an internal annual rate of return of about 35%. And here’s what they look for in the companies they invest in:

A strong, experienced, energetic management team. I’ve never talked to a VC that didn’t have this as their top 3 criteria. They’re investing in the team as much as the technology. They need to know the team can execute otherwise they’ll just hold on to their money until they find the right company.

Game changing technologies, preferably with patents. Although some investors will invest in incremental improvements in existing technologies, they typically look for game changing technologies, locked up with patents, and with very high long-term returns. This is why green tech has been attracting so much money over the past few years. Not too many investors I know are actively looking for service oriented companies unless they show very strong financials, or rolling up geographically diverse companies.

Existing sales or contracts. If you can show your technology or product is already selling, you have a much higher chance of attracting investors. No brainer, but so many small companies just don’t get it when it comes to this. 

Strong market indicators or market research validating demand. At yesterday’s event, this guy from a startup was looking for investors for some patents they had developed without prototyping them. He was so adamant that somebody would invest in their company because he knew in his “gut” that this was going to change the way the world operated. Last time I checked investors didn’t invest in “gut” feelings of startup salesmen. This is why you need solid strategic understanding of your market before approaching investors (or show that the product sells).

Low capital, SAG, and structural expenses. If you need national advertising or expensive manufacturing plants, you’re less likely to attract investors. This is why I love licensing business models where the company focuses on R&D and leaves the product manufacturing and marketing to corporate licensees, an ideal setup for middle market companies.

Realistic financial models, projections, and contingency plans. This will show you know the size of your market, how it operates, and that you have the knowhow to sell the product, and have built in intelligence in case things don’t work out as expected. You will also need to show a detailed plan for the money you’ll ask for. It’s an inside joke that everyone is looking for $5-10M in investments. But why? What’s the plan for that money?

Lack of litigation threats or regulatory barriers. The last thing an investor wants to deal with.

Follow up financing plans. Particularly for early stage investments, you need to show a strategic view of where you’re taking the company and the plans for future financing to support that strategy.

It’s important to note that most investors no longer invest in patents alone. That part of the market has now moved over to patent portfolio managers where they actively purchase and group patents from various inventors for sale as a portfolio.

By the way, the company I wanted to invest in missed several of the above criteria (the best thing it had going for it was the technology), and I walked away without losing any money in the deal – and gaining a ton of understanding about private money.

If you have any stories or additional pointers about raising equity, I’d love to hear about it.