As you can guess, that would be an informal group with no legal responsibilities, but one able to be called upon to act as business, industry and scientific advisors to the company or CEO.

Why?

Usually, you would want to create an advisory board to fill in the critical areas of need not evidenced in the board of directors or within the company itself.  University professors, industry gurus, lawyers familiar with patent law and former executives of competitor companies are typical recruits you might consider. Sometimes, celebrities will agree to sit on an advisory board as a gift to the CEO, providing a bit of glamour for the company at small expense.

How about the size of the group?

There is no limit to the number of individuals for such a board, but there is a practical limit to the amount of cash and / or stock to be allocated to these outside advisors.  The rule of thumb for an advisory board member is to expect a half to a full day each year on site, typically in a strategic planning meeting with numerous members of the staff, as well as some reasonable number of phone calls from senior members of management during the year.

How about using the names for marketing, fundraising?

Included in the “package” is the expectation that the advisor’s name will be freely used in the company’s marketing, a bio listed on the website, and occasional calls will come as references to the advisor from potential investors and others looking for deeper insight into the secret sauce of the company or state of the industry than can be provided by many on the inside.

And now the expected cost…

[Email readers, continue here…]    For this, an advisory board member for a small to medium sized company should expect to receive options equal to ¼% of the fully diluted stock of the company, vesting over two years, and subsequent grants if there has been additional stock issued to dilute the advisor, bringing the advisor back to this percentage if an advisor is renewed after subsequent two-year intervals.  Alternatively, some companies pay an advisor a fee of $1,000 to $2500 per “on premises” meeting day and optionally much smaller stock grants, if any.

What if an advisor acts as a consultant with more time?

Additional commitments of time by an advisory board member should be compensated as would any consultant, at half and full day rates agreed upon in advance between the CEO and the advisor. There is no rule as to uniformity of pay, as some advisors may be willing to serve at no cost while others are industry consultants used to receiving fair payment for services rendered.

Create a formal advisor agreement listing expectations.

Advisors fill blind spots in the corporate knowledge base and guide you in areas where you feel you have a personal weakness.  There is usually a formal agreement between the company and the advisor, carefully calling out the time expectation, the forms and amounts of payment, and the indemnifications from liability granted by the company to the advisor in return for confidentiality and non-disclosure of company trade secrets by the advisor.

How about “chairman” of the advisory board?

A particularly strong advisor, especially if well known, may be named chairman of the advisory board, which is often just an honorary title, since the CEO is usually tasked with the planning of the full day meeting of advisors annually, and setting the agenda to match the needs of the corporate board and senior management.

Recently I was asked to review an offer letter for a senior director of business development. The CEO was concerned that he was offering far too much in the form of incentive compensation, with bonuses that could greatly exceed the base salary if all the bonus items were achieved.

The critical question…

I asked the CEO to imagine what the company would look like if all those bonus-expensive items were completely achieved in one year.  Upon reflection, he stated that revenues could double the following year, and that the company’s reputation among larger customers would be so greatly enhanced that the company could become the leader in its niche.  My obvious retort: “Then why not offer this candidate the moon if he can achieve this?”  The offer was sent and the CEO was much happier, dreaming of the possibilities, not the incremental cost.

Have you experienced this in your business?

I love to point out that my top several salespeople were making more than anyone else in the company, including their boss.  These outstanding achievers worked for salaries below those of their engineering peers and had to put it all on the line every day to earn their keep, let alone excel.

How to align your goals with those of your managers.

[Email readers, continue here…]   The best way to encourage alignment between your managers and the company’s goals is to create a bonus plan for each, with its payments made based upon the key performance indicators established for them and for their areas of responsibility, all in turn based upon the tactics and strategies contained in the company’s strategic plan.

Exceeding expectations…

It is amazing how few company CEOs grasp the concept that executives and managers should be compensated not just for doing their named job, but for exceeding expectations while advancing the corporate goals.  To align everyone in the organization in exactly the same direction is a task, one that is a powerful driver for growth.  People should be compensated well for such outstanding contributions.

What is the general rule for such a bonus plan?

Provide no more than five key performance indicators derived from the strategic plan and fitted to the specific job of the manager.  Set time-based goals for each.  Provide bonus opportunities that add to approximately 50% of the base salary if all are achieved within the year.  Meet and measure progress truthfully each quarter.  Perhaps pay a portion of the bonus upon completion of these meetings.  Do not make the usual mistake of ignoring or passing on the progress of any of these items by just paying a part of the bonus at yearend because no-one carefully reviewed progress, or because circumstances changed, and the bonus item could not be completed as written.

Incentives are powerful tools when used well and reviewed often.  They are a major part of a good manager’s work and should be treated as such by the CEO and all senior managers.

And I found from experience – after investing in many other entrepreneurial businesses over the years – that this stage typically occurs first at about twenty employees or $3 million in net revenues (or gross profit) for most any kind of company.   In future weeks, we will dissect this $3 million-dollar phenomenon separately.

Another personal story from experience…

But for now, let me digress to the story of my first hiring decision for my first company, years ago.  Way back then, I was managing a small and growing phonograph record manufacturing business (yes, back in original heyday of vinyl records) using independent contractors for both content and production.  I built this business through my high school and college years. Soon after graduating from college, I was making a good living and enjoying growth and freedom managing the enterprise.

It occurred to me that I had come to a fork in my career. 

I could continue with the status quo, making a good living, or I could reinvest much of my profit into my first hire, an assistant that would free me from the day-to-day management tasks, allowing me to recruit more business (content) and build a real enterprise.  This was a tough decision at that time.  Comfort, or risk-it-all?

[Email readers, continue here…]   My story of “that rock” in one paragraph.

On a Friday evening, I got into my car and drove from my office in the Los Angeles area all the way from Los Angeles to Ensenada, Mexico, checking into a remote beach hotel.  After arrival and checking in at the hotel on the beach, I found a large rock at the shoreline, climbed it, and sat there for hours contemplating my future. Hire for growth, or grow slowly and comfortably?

Well, the decision was what you expected. 

I hired my first employee, leveraging her organizational skills to grow quickly enough to continue hiring as growth accelerated.  The company reached over fifty employees at the point where I sold my interest and moved into the computer programming business at what turned out to be just the right time.

But I’ll not forget the overwhelming weight of that early decision, compared to the many much more expensive decisions made in subsequent years.  I was for the first time dependent upon the work of others.  And I had made a successful hiring decision, lucky for me.

As years passed, more hiring insights became clear as I made mistakes and had successes and watched other entrepreneurs struggle with similar choices and opportunities.  Let me share some of those insights during the coming weeks as we focus upon “depending upon others.” Stay tuned, please.

I love absolutes – statements with no wiggle room for gray-area responses.  Well, here is one of those, and it deals with market research first and foremost.

Let me tell you a short story at my own expense. 

In 1994, (I know a long time ago), I invested over a million dollars (two million six hundred thousand in today’s dollars) into a company whose entrepreneurs had a vision that I bought into for many reasons, not the least of which was that I had industry experience and understood the need.

How would this have sounded to you back then?

The first of several advanced products was a unique cell phone for hotel rooms, connected through a special “switch” in the hotel’s telephone room that was able to detect when a call was coming to the guest room phone and simultaneously ring the cell phone assigned to that room, no matter where it was at the moment.  A tent card beside the fully-charged phone greeted the guest entering the room for the first time, inviting the guest to pocket the cell phone for the duration of his stay.  The phone could be used for receiving incoming calls when in the restaurant, on the golf course or anywhere.  The guest could even make room-to-room or concierge calls as if dialing from the room itself.  These systems were not cheap as you might guess.

How this did sound to buyers back then…

Four- and five-star hotels loved the concept, which included redirecting outgoing calls from the cell phone by the guest to be sent through the hotel’s land line switch, making the hotel a miniature phone company with its attendant profits.

But wait for the mic drop…

[Email readers, continue here…]   Here’s where some intelligent market research might have saved the company and my investment.  Fast forward just a few years to 1996.  Hotels were installing the system; guests were satisfied, and the company was growing. There was even talk of some phone companies using the patented system for serving communities of guests, not just from a single hotel. But that was back to 1996.

What? Market research matters?

Those of us who lived through those times will recall the nationwide advertising campaign the suddenly carpeted the newspapers and televisions:   The first digital cell phones were released to the market, smaller, cheaper and priced with roaming plans that made it no premium cost to carry these digital phones to cities far from home.  Overnight, guest use of the room cell phones dried up and hotels were left with expensive switches, phones and chargers unused.  Soon the company was drifting toward bankruptcy as the leases for the systems expired, one by one.

I tell the story often to make this point:

I guarantee that there were tens of thousands of people in the country who knew long beforehand of the imminent arrival of the digital cell phone and could predict its effect upon usage, especially roaming use.  And yet the company was blindsided as it continued to invest in the specialized phone switch and specialized analog phone hardware, soon to be instantly obsolete.  Merely adapting the switches to new digital phones would not work, since guests no longer needed the service itself, being instantly self-sufficient.  People no longer called guests in their rooms but directly to their cell phones, even when the guests were on the road.

Technology advances cannot be stopped.

In this case, the competition was not from a company but from a new technology.  In most cases, it is the competitor with a better product, lower price, faster service, better reputation that is the threat.

So, what or who would be competitors?

When I listen to a pitch from an enthusiastic entrepreneur or read the summary of a business plan, one of the first questions I ask is about the strength of the competition.  Surprisingly, many entrepreneurs immediately respond. “There is no competition.”  Now, there is a statement even Alexander Graham Bell could not make about the telephone (which he pitched to his investors as a device to aid the deaf).  Bell’s competition was the written message, doing nothing, the telegraph and old-fashioned word of mouth.  To state “there is no competition” is always the reddest of all flags to an investor.  For the most brilliant new ideas and business plans, the competition is merely to do nothing. That response is quite different than one where competitors have paved the way and existing customers prove through use that the product or service is valued.

So, I lost lots of money for lack of market research.  Bell was lucky, but the pace of technology was so much slower then.  Just to make a well-earned point now that you have heard my story: know your market and competition or don’t spend a dime on anything else.  Oh, how I wish I had taken my own advice.

Definition of tactics:

Tactics support strategies and are shorter term and more procedural than the strategies they support.  Tactics change frequently as achieved and may be updated or replaced during a year when achieved, unlike strategies which often span several years.

How many tactics can you support at once?

Five tactics to support each strategy seem a fair, even if arbitrary number.  Tactics direct each department in very specific ways.  Here are several examples of tactics from my recent experience with companies where I serve as board member.

Example tactics for one strategy:

[Email readers, continue here…]    Strategy Three: Expand into at least three new continents through new distribution channels.

1. Sign one distributor by June of this year in each of three major geographic areas. EMEA, Asia, Latin America.  Each distributor should be capable of generating $1 million in business by year two.
2. Assign our development manager to localize design and oversee the needed enhancements to our product and support materials for each new territory.
3. Train and transfer technology to each new distributor within 90 days of signing.
4. Assign one of our corporate employees to support sales and installation efforts by all distributors.
5. Seed demand in each new territory with at least two corporate marketing events in partnership with each distributor.

Here’s how these tactics support your strategies.

Note that each of these tactics directly support the strategy, are measurable and assumed to be achievable, bought into by each department affected by the tactic.  Note that the strategy calls for cooperation between business development, sales, marketing, product development, installation, and support.   This is a great way to unify departments that once may have competed for resources toward individual ends, now pointed toward a common goal supported by all levels of management up to the CEO.

Here’s a memory tool for this exercise.

In planning, the matrix, “5×5=1” (5 strategies, 5 tactics, 1 goal) is a good memory tool for you to keep from overreaching with too many strategies and too many tactics.  But it is not written in stone.  And development of these important elements of the plan should be made using all the resources available, from your board of directors to your senior management to departmental management.

Getting all of your stakeholders to buy into each step may not be easy, but when accomplished, is a powerful and invigorating opportunity to celebrate, then to get to work as a functional unit of the whole.

Ten tests for your business success:

1. Is your market identifiable and accessible? Test yourself as to whether you can identify the size of your market niche, and whether you can overcome the many barriers to access customers within your niche.
2. Where in industry life cycle? If your vision is for a product or service that fills a need in a mature industry, you may be flying against the prevailing winds as a market shrinks over time, taking your business with it.  Conversely, a fast-growing industry lifts most all good participants, making excellent companies excel even more and grow even faster, like a small plane flying at 150 knots with a 75-knot tailwind.
3. How large a total market? If the total market for your niche is under $100 million per year, it is going to be difficult to build a $50 million business, even if not impossible. If the market is ten times that size, there is probably room for competitors to fight for dominance and still succeed if you are not number one.
4. Can you dominate that market? The dominant player in any niche controls pricing for all those under it, and often sets the risk profile for new entrants into the niche if the dominant player’s products or services fill the needs of customers at reasonable prices and quality.  [Email readers, continue here…]
5. Have you created high barriers to entry? If your business is a “me too” entrant into any market niche, even the smallest success will soon attract competitors that will sap some degree of your potential growth. What can you prove as a barrier to entry for competitors?  Is it the advantage of time – years of development ahead of any competitor? A core patent or “thicket” of patents protecting your offering?  A strategic relationship with one or more of the largest customers?
6. Are margins high enough? Some great ideas just can’t make money and ultimately die for lack of profit potential.  Profit margins are higher for unique products or services early in the life of an industry niche, or for products protected by patents that prevent others from undercutting you simply by releasing a cheaper product.  High profit margins are a sign of high barriers to entry and attract investors and ultimately good buyers for your business.
7. Can this business grow to above $20MM to $50MM in annual revenues? This is a basic test for investors, separating your business from those with smaller visions.  There is nothing wrong with a vision for a smaller enterprise if not in need of professional investors to make it a reality.
8. Do you have a world-class management team? The best way to protect against failure is to attract a team with members who have experienced success and failure and can recognize the ways to manage toward success and avoid the pitfalls previously experienced from past failures.  From a professional investor’s perspective, the team should be able to be flexible, coachable and experienced enough to get a business through breakeven and beyond the next level of outside investment, greatly reducing execution risk.
9. Can you translate an idea into a compelling product? Some great ideas just cannot be made into a product at a reasonable enough price to attract customers.  And some attract early adopters but cannot pass into the mass market.  Sometimes, an idea is just too early for the available technology to make it attractive.  Early cell phones were large bricks that required a large carrying case and cost up to a dollar a minute to use.  As technology caught up, allowing miniaturization and light weight, mass adoption drove the price down and allowed the building of infrastructures everywhere to support the use of inexpensive minutes.  Do anything you can to develop compelling products or early prototypes as proof of ability to reduce technology risk.
10. Is there an exit strategy for the investor(s) over time? There are many professional services businesses that make fine lifestyle opportunities for architects, doctors and dentists.   But these types of businesses are not attractive to potential buyers willing to pay a premium for businesses that are worth millions more than their asset value.  Building a great business to create wealth for the entrepreneur at exit, means thinking of the exit strategies from the beginning.  Who or what type of buyer would be attracted to this business if successful?   Great wealth is made from selling great businesses at immense profit for the entrepreneurs and investors who took the journey.

There may be more choices here. But the most important ones for any size business, including start-ups, is: Do you believe it should be the quality of your management team, or the plan you execute so brilliantly toward your success?

Do you want a unanimous answer right away?

Checking with professional investors from angels to VC’s, the answer appears to be near unanimous: the quality of the proposed or actual management team comes in a strong first before the attractiveness of the business plan itself.  The quest for a great management team is not a fluke, but rather a result of backward looks at the failure rate from past investments by those same angel investors and venture capitalists.

Here’s a test:

Several weeks ago, we published statistics of start-up and company failures. If you read that analysis of statistics for startups and early-stage businesses, you have learned the truth that at least half of the businesses backed by professional early-stage investors will die within three years or less.

And it’s a tough test at that.

[Email readers, continue here…]   That reality is a tough one for the professional investor, almost as tough as for those entrepreneurs who lose their businesses.  The latter can start new businesses, flush with the experiences gained from the previous effort and much the better for it.  But the investor’s cash is lost forever – and the experience gained usually is just another notch in their investor belt.

And here is the conclusion:

It is the management team, most often led by a passionate entrepreneur with experience in the industry, which makes the biggest difference between success and failure, even for businesses built upon less than sterling basic ideas.  Among professional investors, almost all would rather back a great team with an average idea before backing a great idea and inexperienced team.  It comes back to coachability and flexibility, also our insight from several weeks ago.

Great teams always have the advantage.

As a reminder of that conclusion: Great teams are flexible and have the advantage of experience in seeing the pitfalls before them from their past.  They are coachable in that they have taken advantage of the vast experience of others in overcoming obstacles and finding ways to speed a product to market faster or create a service whose quality exceeds that of the competition.

Of course, you could be the exception.

None of this is to say that an inexperienced entrepreneur cannot lead a great new business.  But it would be foolish to try without being surrounded with as many experienced co-leaders as possible from the outset.   As a start, that smart entrepreneur will soon “know what they don’t know”, an important qualifier for success in any business endeavor, when combined with the willingness to fill gaps in knowledge with help from those who have the experience to do so.

Even if you are not considering taking in money from professional investors, this advice would serve you well in protecting your own monetary investment.

We hesitate to enforce our own rules.

So, it is common practice to leave an offer containing a discount open, following up periodically to attempt to nudge a prospect into signing.  But without a firm, meaningful deadline, many of these bid-in-hand prospects will want to shop around, or delay the “yes” for budgetary reasons, or just ignore the offer for the short run.

Reasons your customer might hesitate.

If a potential customer’s cash is tight, or if the relationship between the customer and sales rep is not close enough to move the customer to at least respond, then an offer can sit for months or longer with no acceptance.

Deadlines: your best tool to force a decision

There is a proven way to cause enough discomfort to move a potential customer to act, but it carries a degree of risk.  Place a firm deadline for any discount, and make it clear that the date is real, after which the discount will no longer be available.  Do so within the offer document and with a personal comment with delivery of the offer.

Will you enforce a deadline if you could lose the sale?

[Email readers, continue here…]    Plan to enforce this deadline, even at the peril of losing the deal.  Creating a line in the sand and sticking to it will ensure that your prospect takes the discount seriously.   If the deadline expires and the potential customer finally acts, expecting the discount, a significant degree of sales power returns to you.  From a simple, “Well, we’ll extend it for a week” to “Our board is firm, and the best I can do now is (something less.)”

The most powerful tool you have in a sales environment is a deadline.  If your prospect continually misses a deadline for no good reason, you have an earlier reason than usual to reduce the percentage of close to near zero in your sales prospect system, and that is a good move in making sales forecasts more realistic, if nothing else.

Yes, it takes a little extra gut to pull the plug on an offer or discount.  Ask yourself: “How many long-open offers are actually accepted?”  You’ll have your answer and a tool to enforce change.

Let’s start with a restaurant -not our thing. But…

I read several years ago that the average startup restaurant lasts only about a year.  Ouch! Here I am a professional investor in early-stage companies, and I attempt to find those with the greatest chance of success and growth in value over time.  Restaurant startups would not top my list.

Data does not lie.

We have years of real data to call upon: data that impacts both investors and entrepreneurs. There are two reliable sources of reasonably recent data for us to examine.  The Angel Capital Association recently published a study contributed to by several of my friends quoting that seventy percent of investments made by angel investors to date return less than the amount invested – upon a sale or closing of the business – the great majority of these outright losses as businesses die.

Fortune Magazine and Harvard studies

Attempting to get to the number of real failures for all startups, not just those with angel group investments, Fortune Magazine published an article claiming that 90% of these startups do fail.   The U.S. Census Bureau reports that 400,000 new businesses are started every year in the USA, but 470,000 are dying. What does THAT mean?

Even more credible statistics

[Email readers, continue here…]   John Chambers, former CEO of Cisco, stated that “More than one-third of businesses today will not survive the next ten years.”  And this includes all businesses, not just startups.  Harvard University recently published a study that shows three of every four venture-backed firms fail.  And the U.S. Bureau of Labor Statistics states that 50% of all businesses survive five years or more, and about one-third survive ten years or more. Remember that this includes the Fortune 500…

Here comes the SBA and its analysis.

The Small Business Administration (SBA) claims that 66% of new businesses survive their first two years (and that 50% fail during their first year in business.)  Although these are not parallel studies or similar statistics, most seem to refute Fortune’s claim that 90% of all startups fail.

How about the early-stage investors?

You might be interested in this data as viewed from the early-stage investor’s viewpoint.  Angel investors hold their average investment for 4.5 years before a liquidity event (positive or negative.)  That buries the real data that – if you strip out the short-term company failures or investor losses, the number of average years to a positive return is between eight and nine.  And that is after investment, not after a company’s start-up.  Would you be willing to invest a significant portion of your wealth in “deals” that are completely illiquid for almost a decade on average?

But there is a pay-off for early-stage investors.

And yet, these same early-stage investors – if they diversify into enough companies and wait long enough – see an average annual return on their investments of 22%.  Way above market investment returns. But those returns come from the 3% – yes only 3% – of their investments that pay out more than ten times the amount of the original investment.

Starting up a new company is risky. Investing in a young company is risky.  But the potential returns over time for investors makes this an attractive diversification.  And we hear of successes like the over 1,000 unicorn companies that make us all want to jump in and try our luck – even if the odds are well below 3% for ultimate success.

We are a cadre of optimists and that is unlikely to change.

Entrepreneurs will always start new enterprises. Angel investors will always finance many of them.  We all look forward to the lottery win, and hope to be well-rewarded over time.

The world is experiencing a new era of re-imagination, in which virtually all our old ways of doing things are being uprooted by new, more efficient and more widely available methods of accomplishing old tasks.

We collaborate using Zoom, Teams, Salesforce, Yammer, Skype, GoToMeeting, Fuze and hundreds of other tools not available to the last generation of whiteboard, personal meeting or teleconference users.  We read increasingly using our digital devices.  We compute using our smartphones and tablets.  We use gestures or our voice to control our engagement with our technology.  We take courses on-line.  We bypass the middle person for services and information.

We are learning to use new tools.

ChatGBT and Bing AI are just two of the new tools that are already changing our lives.  It won’t be long before another round of layoffs comes, and these new tools will create new jobs to fill the gap.

We watch our news and entertainment anywhere we want to on any kind of device we choose.  We move boarding passes, coupons and more off paper and into the digital world.  Many of us now never physically touch our music.   We recruit and hire using LinkedIn or other resources, replacing job fairs, campus events and paper resumes. We use QR codes to simplify the process.

Examples of re-imagining the business.

There are hundreds of other examples of re-imagination everywhere we look, making our lives easier and our reach greater than ever before.

The principal drivers of this re-imagination are the hyper-growth of the mobile Internet, consumer-controlled commerce, the rise of big data, and “globality.”  Let’s explore examples of these and more.

The mobile Internet – The latest major computing cycle

[Email readers, continue here…]   Over the last fifty years, the world transitioned from mainframe computing to mini-computers to PCs to the desktop Internet.  And now we have made the largest cycle of all – the move to mobile Internet computing.   With 7 billion people on the planet today, there are more than 6 billion mobile subscriptions, up from just 720 million in 2000.  Mobile workers are quickly overtaking the fixed desk worker and long-distance traveler.  Mobile commerce is up 552% in one year (measuring cyber-Mondays).  The mobile web will become what desktop Internet became in the 1990’s – the standard platform for anyone doing business.

In three years, as web browsing and TV watching minutes per day remained constant, mobile consumption rose by double to over two hours per day.   Fifty-seven percent of teenagers say that their mobile device is the “center of their universe.”   We are entering the smartphone era, where 65% of time on our mobile devices is spent in non-communicating activities.  We are treating these more as computers and less as phones. And almost half of all homes have at least one tablet device, replacing traditional computers for most tasks.  And we carry access to our entertainment with us, bypassing the need to be entertained by others while away from home.

Big Data – threading the needle while still in the haystack

By 2024, there will be an estimated 8,200 gigabytes of stored data for every person on earth.  That adds up to 80 with 21 trailing zeros.  In my country, USA, there are three million data centers in all, accounting for 2.2% of our nation’s use of electricity.  Examples of this massive accumulation of data abound. We could store all the world’s music on just three four-terabyte disc drives. There are thirty billion pieces of content shared on Facebook each month.   If we analyze the potential value of that data to various industries, we can imagine a 60% increase in retailers’ operating margins, or $600 billion in value to various enterprises from mining personal location data.  An estimated $180 billion will be invested in data analytics by 2024.  This is big business.

How do we use big data? 

We will enable segmentation of the population to produce customized messages and actions.  We will replace or support human decision-making with automated algorithms. We will enable a generation of experimentation with innovative business models, in our industry making today’s form of revenue management look like a primitive art.

The true value to us will be in analyzing unstructured data, estimated to be 80% of all data stored, from blogs, social media, pictures and video.  None of this could be mined successfully in the past generation of technology.  Think of 6 million automobile comments, or 30 million political comments, 200 million travel comments, or 150 million consumer electronic comments posted each month.

Retailers such as Staples and Home Depot are already charging shoppers different prices based upon where they live, income levels and proximity to a competitor’s store, among other mined attributes.  Will hotels be next?

We are in the “age of recommendation”

Already, 69% of consumers research their product, service and guest stay decisions online.  62% look at online peer reviews.  And 39% compare prices across alternatives.  This cat is out of the bag, driving prices down, democratizing search and supply between branded chains and independent properties.

With this little space and time, it is not possible to expand upon other macro-trends, such as socializing commerce, increased trust in the cloud for storage and transactions, exponential growth in computing power, green technologies, and the continued amazing growth of the Internet in Asia, Latin America and now in  Africa.

But it is certain that being informed and planning well for that future will give you a competitive advantage over those who do not.   An African proverb states “Tomorrow belongs to the people who prepare for it today.”