The Idea Compass From Ideablob

the idea compass A fearless, quick-start guide to help your ideas venture out into the world.

For Innovators, Entrepreneurs, and Creative Professionals. By The Innovation Team at Advanta Corp.

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table of contents :::

foreword

pg. 2

Discovering It What is “It”? The Growth of an Idea Ideas vs. Opportunities From Opportunity to Beyond

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building It Step 1 – The Vision Step 2 – The Plan Step 3 – The Resources Step 4 – Full Throttle Execution

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blobbing It The Evolution of an Idea The Blob Approach Blob Stories

pg. 6

running with It Operations Raising Money Revisit same principles as “getting started” Other Things You Should Know

pg. 6

bonus tips and resources Local Resources Books and Magazines Websites

pg. 6

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Foreword, by Ami Kassar, CIO at Advanta Corp. Innovations come in all shapes and sizes. Some succeed, some fail. Some are global in scope, others are smaller and community-focused. Whether an innovation lasts for generations or just a season, they all have the potential to make a big impact. But the truth is, innovations wouldn’t exist without the ideas that sparked them. At Advanta, we strive to provide meaningful tools for innovators, entrepreneurs, and creative professionals to develop their ideas and bring them to life. In 1951, our business grew from Jack Alter’s idea to provide individual, needs-based loans to fellow teachers. The idea grew and grew and today Advanta is a publicly traded company that (through Advanta Bank Corp.) provides financial services to small businesses. We’ll never forget what it’s like to start out with just an idea and a dream. The Innovation Team at Advanta is a multi-disciplinary force of entrepreneurs and creative thinkers committed to finding new ways to help small business owners and entrepreneurs. We purposefully seek out the impractical and improbable in order to push the boundaries within the company and the financial industry overall. A few of our recent initiatives include: Ideablob.com  An online community initiative designed to provide entrepreneurs with business advice, marketing tools and the chance to win $10,000. KivaB4B A project to bring financial assistance to small business owners in developing countries with Kiva.org. As a KivaB4B cardmember, every single dollar you send to Kiva will be matchedby Advanta (Up to $200 per card per month). Bizequity

Bizequity empowers small business owners with tools and information to help determine the estimated value of their business.

We hope this simple guide helps and inspires you to cultivate and grow your ideas, Good luck!.

Ami Kassar, CIO Advanta Corp.

IDEABLOB.COM® CONTEST. NO PURCHASE NECESSARY. A purchase will not increase your chances of winning. Contest began on 9/24/07 at 12:00:00 am CT and ends on 3/31/09 at 11:59:59 pm CT. Open to legal residents of the 50 U.S. states and D.C. who are of the legal age of majority in their state of residence at the time of entry. Void where prohibited. Official Rules available online at www.ideablob.com. Sponsor: Advanta Bank Corp., PO Box 30715, Salt Lake City, UT 84130-0715.

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Discovering It :::

pg. 4

What is “It”? “It” is that idea that woke you in the middle of the night or snuck up on you at the grocery store. Maybe you’ve spent months trying to determine exactly what “it” is going to look like or do. Or how “it” may change history or solve a problem. Deep down you know “it” has big potential. Don’t get discouraged if people laugh at “it” – imagine what they thought about electricity when it was just an idea.

5 Moments When 1. Ideas are Likely 2. to Strike 3. 4. 5.

A solo cross-country road trip. Meeting with a friend or business partner over triple-espressos. Stuck in bumper-to-bumper traffic. People watching and observing everyday events. Q uestioning why things are the way they are and coming up with better solutions.

Is there a way to conjure up ideas for new innovations? Questions help. Famous Questions 1. That Innovators Ask 2. Themselves (Maybe 3. In The Shower) 4. 5. 6. 7. 8.

Why am I spending $1,000 per month on my car? Why isn’t there a fast food joint with fresh sandwiches? Isn’t there a better way to transport my music? Why is filing taxes so complicated? How can I make cooking more efficient? How can we share our wealth with those in need? How could that accident have been prevented? Why can’t a coffee shop be more than a coffee shop?

Idea: Idea: Idea: Idea: Idea: Idea: Idea: Idea:

Zip Car Subway iPod Quickbooks Pampered Chef Tom’s Shoes Traffic Light Starbucks

Not all ideas lead to big news and major breakthroughs. In fact, the majority of value that is created in the U.S. today is by those who work for themselves.

MY BLOB #1 What are your Top 5 big ideas (in order)? 1. 2. 3. 4. 5.

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The Growth Is your idea an opportunity? It’s important to seriously assess the of an idea realistic success of developing your idea. Although it’s hard to accept, many ideas may not be worth pursuing. Famous bad ideas: 1.Mechanical Bull Riding Karaoke 2. Endangered Species Lunch Buffet 3. Florida Snow Removal Inc. 4. Cow Tipping Service 5. Baby Nunchaks 6. Insert your bad idea here So, how do you start assessing the opportunity? From “The Entrepreneurial Mind” Blog by Dr. Jeff Cornwall

1. I s there a MARKET? Examine the size of the market to make certain that you only need a small portion of the market as customers to succeed. Make sure that they are interested in, and more importantly want and need your product or service. You don’t have time or money as an entrepreneur to educate them. Begin to get an idea of how much they will be willing to pay. Too many times this becomes a last minute guess by the entrepreneur.



2. I s there a MARGIN? Figure out the basic economics of the business. How much will the product or service sell for and how much will it cost to produce the product or offer the service? At this stage you should really look for opportunities that offer at least a 50% margin. Generally, when all is said and done this will typically result in actual profits of about 15-20% once the business plan is developed and all of the true costs are determined.



3. I s this for ME? There are many periods during the growth of the business when the entrepreneur needs a true passion to carry them

MY BLOB #2 What are five factors that could make my venture succeed? 1. 2. 3. 4. 5. What are five factors that could make my venture fail? 1. 2. 3. 4. 5.

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through. This is not just a simple financial investment. It becomes much more personal and emotional than that. Many entrepreneurs tell us that the profit part of the business opportunity is only one of many reasons for launching their businesses. It also helps to build a business that takes advantage of your experiences, knowledge, and skills.

“Set Them Free!” Using ideablob to Grow Your Ideas Ideablob.com is a tool to help you free ideas from your own head and get exposure and advice from diverse communities that extend far beyond friends and family. You can think of it as free market research. People do really want to help you. Oh, and by the way, by posting your idea on ideablob.com, you not only are forced to take your idea a bit more seriously, you also have a chance at winning the monthly $10,000 prize. Just another way to leapfrog your idea into its next stage.

From Opportunity Small business owners are constantly evaluating and enhancing their to beyond business to better serve their community and fulfill their goals. There is no finish line in business, only continuing growth and improvement. Here are a few words of wisdom for focusing your mind and your business:

Idea: Convertible Ankle Boot/Heels on ideablob.com

Advice from DianeMacEachern, ideablob Guest Advisor This sounds like it makes sense, but does it? Before you create a website and commission a manufacturer, don’t you think you should create some prototypes to see if the idea is a good one? I can’t help but wonder how stable the attachable heels are; I’d hate to be up two inches and have the heel fall off. I think your next step needs to be to make several prototypes and let real women try them out for a month or so.

On the Web • Ideas vs. Opportunities • 105 Business Ideas • T he Top 25 Home-Based Business Ideas

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BLOBBING It :::

pg. 7

The Blob Approach It’s essential to understand that your concept may take many forms before and while you are starting up. As you develop an idea, and develop a new venture, you’ll need to create and apply new approaches each step of the way. Your idea for a hot dog stand on the beach might become an ice cream stand when you find that people would rather feed that sweet tooth on a hot day. You may find that you can give free ice cream to those who come for your new sunscreen spray service. Before you know it, you’re bottling your own organic sunscreen and hitting the big market.

1. F  reshman Orientation Software that Integrates with Myspace/Facebook by Tom Krieglstein, ideablob October 2007 winner I started my 1st company in college. I used all the profits to pay for 2yr post college living expenses & the rest I spent traveling Europe & Asia for 8mo w/ Annie (my fiancée). Now I’m back in the saddle with my next project, starting Swift Kick, an education company focused on increasing the level of engagement on campuses through the use of trainings and technologies. Our latest product is Red Rover, which is an online orientation tool that integrates into Facebook. Red Rover was actually the very first Ideablob winner. Since winning the $10,000 we’ve officially launched the beta version of Red Rover for schools, and are currently testing it at 30 schools before deploying nation wide. After we have “proof of concept” with 10,000 active users, MY BLOB #3 Illustrate how your idea has evolved over time.

On the Web •H  ow Bootstrap Entrepreneurs Adapt to Change • 7 Ways Entrepreneurs Are Artists • Continue To Be Persistent

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we will work towards “proof of business” by implementing our first paid feature into the software. For students, we hope to be catalysts for their personal growth. For schools, we hope to increase engagement, which leads to higher retention rates, which leads to higher graduation rates.

2. E  xpand My Global Tech Company by Andy Tabar, ideablob Finalist My tech business has evolved since the early days when I founded it as a teenager. From a digital file sharing service, to a web hosting company, to a global talent network, I have applied many business models to find one that is best for the market and myself as an entrepreneur. Growth of my ventures was at the top of my list, so I would do things like hire expert software developers in India. I found that many of the growth techniques I was using had a larger need beyond just my own company. So, I started offering the same services, like connecting U.S. companies with experts in India. The shape of my blob went from one that was focused on internal value, to one that was focused on sharing value with the masses. ideablob enabled me to acquire more advice, build awareness, and show the business community that my business is actively “blobbing.”

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building It :::

pg. 9

Step 1 – The Vision Great ideas begin with a vision to satisfy a need and fill a gap where something is lacking in your community, whether that in your hometown or beyond. However, without a coherent vision, it’s hard to maintain commitment and motivation.

MY BLOB #4 Print this page to record your vision. Reference back to it regularly.

short term vision

long term vision

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Step 2 – The Planning After clearly describing your vision and goal, a second step is to create a business plan to guide the direction of your small business. Planning requires thoughtful analysis and consideration of your market, your opportunities, and your challenges. Although you may not need a formal business plan, the process helps you take the initiative and focus your time, money, and energy. Key questions to consider in your business plan: 1. How does this mission add value to my life and to the community it serves? 2. What is the opportunity and how big is it? What will we take home at the end of the day? 3. What resources do I already have? (e.g., This includes experience, money, opportunities, and physical resources like people, locations, and products. 4. What are the expectations from my stakeholders? 5. What are the benchmarks I need to reach and when do I need to reach them in order to maintain a viable business? 6. What are my marketing strategies and opportunities? (Business Planning Resource at Advanta.com) Idea: Earth Friendly School Supplies Advice from JeffreyHollender, ideablob Guest Advisor

 his is a very interesting idea. You’ll want to make sure you create a solid T sales model (beyond trade shows) for reaching out to the school systems that will buy your products. You should talk to distributors in the space to learn about the risks and opportunities your business will face. They will be the most knowledgeable about the market, and can guide you. I would also encourage you to open up the product/development process to your customers (school systems and even the kids). Use your website to solicit ideas for what your customers need and desire in eco-friendly school supplies. By getting your customers to help design your products, you’ll increase the odds that they’ll buy your products.

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MY BLOB #5 Outsmarting Your Competition: A key component to planning is how you will be one step ahead of your competition. Use the comparison chart below to help identify the strengths of your organization as well as those of three primary competitors.

Competitor #1 Competitor #2 Competitor #3

My Competitive Strengths

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Idea: Free Online Web Shops Advice from Crowne, ideablob Guest Advisor



 etworking is the beginning. I would also add that you need to determine N who to network to. This is an easy exercise to help you figure out your target market, their age group, and what these people like to do. Step inside your ideal client’s life for a day and write down who that person is. Then go out and find them. Network until it hurts. The best advice I have ever been given on business is to get a plan and work, work, work.

Beyond complementary skills alone, ask yourself why and how you and your partners are likely to communicate effectively on strategies over time.

The Money  he need for raising external capital for a business is dependent on T the business model, the growth plan, and most importantly, the core values that are set in place by the entrepreneur. One business may have investors knocking on the door, but the entrepreneur decides that she would like to maintain 100% control and ownership. Using only the resources that are personally available to you to achieve the same outcome is called bootstrapping. In fact, many bootstrapping entrepreneurs are achieving the same or bigger results than those who are acquiring external capital. Another business, however, may seek external funding to pursue bigger growth opportunities. In any case, the entrepreneur should be in full control. Careful spending and wise use of resources will reduce risk for the lifetime of the venture.

The following diagram illustrates six primary sources of funding for a venture and the relative order in which they are usually obtained. Utilization of funding sources is entirely dependent on the venture and the type of growth strategies set in place by the entrepreneur.

MY BLOB #6 Who are the top three people who will be the largest influences of your success? What are their strengths? 1. 2. 3.

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Idea: Earth Friendly School Supplies Advice from JeffreyHollender, ideablob Guest Advisor



 his is a very interesting idea. You’ll want to make sure you create a solid T sales model – beyond trade shows -- for reaching out to the school systems that will buy your products. You should talk to distributors in the space to learn about the risks and opportunities your business will face. They will be the most knowledgeable about the market, and can guide you. I would also encourage you to open up the product-development process to your customers—school systems and even the kids. Use your website to solicit ideas for what your customers need and desire in eco-friendly school supplies. By getting your customers to help design your products, you’ll increase the odds that they’ll buy your products.

Step 3 – The Resources T he People Each person has his or her own strengths, which benefit a team. Working with others who have complementary strengths can help grow your business in new directions. Consider the personality traits and skills you possess and then list qualities you lack. When looking for additional support and guidance, pay attention to the skills that the other person has. Are they compatible with you and complement or supplement what you lack? Strong personal relationships with a co-worker or advisor can be very beneficial to the success of the company. However, if the person has skills or values that do not match the vision of the company and your own work ethic, it’s likely the dynamics will prove too frustrating for you to maintain either a good relationship or a commitment to the company.

MY BLOB #7 Who are the top three people who will be the largest influences of your success? What are their strengths? 1. 2. 3. 4. 5.

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Idea: Businesses on a Shoestring Advice from ttaulli, ideablob Advisor



 aising capital is never easy – even for large companies. Investors want R to see a clear plan (such as with a business plan or executive summary) and an owner that has the skills to achieve the milestones (building a product/service and getting customers).

A big part of the process is finding qualified investors who understand the risks. This means leveraging your current network as well as making new contacts. In fact, a good source is to ask service providers, such as CPAs, attorneys; and so on. No doubt, this process can be long (it’s not uncommon for an early stage capital raise to take six months to a year). There are also tricky legal issues, which can cause problems for the future of your venture. So, make sure you have qualified counsel to help with the necessary documents. MY BLOB #8 What is the largest funding source (if any) that you anticipate during the life of your venture? How are you planning to raise the initial money you’ll need to get rolling? 6 5 4 3 2 1

IPO Private Equity Venture Capital Bank Loans Angel Investor(s) Friends and Family

On the Web •P  reparing The Competitive Analysis Section Of The Business Plan • E ven A Solo Entrepreneur Needs a Team of Players • T he Art of Bootstrapping • T he 6 Biggest Mistakes in Raising Startup Capital

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Growing It :::

pg. 15

Operations Every successful business venture requires day-to-day work. When you have moved from vision to implementation, things may not always be so optimistic. With an operations plan in place, however, you can stay in control of many of the unpredictable events that occur. What does an average day of work look and feel like? What are the systems and processes that will be in place? Who are the leaders? These are all reasonable questions for your operational plan.

Idea: 850 Squared Online Education Advice from Marisacatalina, ideablobber



 listen to your potential audience. As the founder of a community-based … nonprofit arts center in NYC, I listen to my students every single day about how we can better serve them. Before we even started programming we did market research with hundreds of teens and their parents from our target area and asked what they wanted to learn, what kids of arts classes they currently have access to, and how they like to spend their after-school hours. If you listen to those you serve you will grow organically.

Marketing

Top 10 Ways To Spread The Word

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Guest Blogging on Popular Website Blogs E-Mail Newsletter List with Monthly, no-strings-attached Product Giveaways. Viral Video Contests Become a vendor or supplier at popular events (concerts, baseball games, etc.) Text Messaging Perks (“Text 66937 to XYZ!”) – using services such as Mozes.com Printed Post-It Notes in Bathroom Stalls at Bars (with handwritten typeface) Temporary Spray Chalk Messages on Busy Sidewalks Sponsor the best networking events or lunch-ins at the office Provide the best product and the best customer service Fighting for a cause – a unique petition, Facebook Group, etc.

MY BLOB #9 What are five key strategies that are essential to the achievement of your goals? 1. 2. 3. 4. 5.

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Idea: YALHDAH Magazine Advice from thebizguy, ideablob Advisor Try and create partnerships with various organizations to gain exposure and readers (giving away the magazine will help expedite this process!). Maybe try setting up an interactive forum on your website (check out Vbulletin.com for some affordable software plug-ins) which will help keep your readership interactive with one another which will surely attract more readers to your magazine. Looks like you are definitely on the right track and congrats on getting this far. Best of luck and visit me on YoungEntrepreneur.com (user BizGuy) if you have any other questions on publishing. Managing Growth Growth is essential to the life of your venture. It enables you to achieve goals and have a more significant impact on your community. But growing too fast can jeopardize the quality of your service. One common mistake is running out of cash along the way. It is essential to have a growth plan in place so that you are prepared for the worst. Idea: Elimidae Eco Friendly Clothing Advice from ResidentBlobber, ideablob Advisor

 anaging cash flow is key, as you have experienced. The first step I M would take is to find out what opportunities you can capitalize on during the off seasons. It will take some creativity (which should be no problem for you.) Perhaps there is a line of products, how you position your company in the marketplace (versus your competition), a certain location, or type of strategy that you utilize to make things more manageable. I wouldn’t be inclined to seek outside funding, unless there are serious growth plans in place. By growth, I mean that a strong customer base has been identified and there is an opportunity to scale. Here are a few articles on sources of funding. (continued on ideablob.com)

On the Web •T  hree Ways To Grow Your Business • H ow To Grow Business Revenue Every Year • T he Top 5 Viral Facebook Techniques • 19 Viral Marketing Techniques

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Posting Your Idea on ideablob :::

3 Steps 1. 2. 3.

Go to: http://www.ideablob.com Click the “Submit Idea” button. Use your notes from this book, and post a description of your idea on ideablob.

Top 5 Reasons to Use ideablob

To To To To To

1. 2. 3. 4. 5.

receive advice for your idea. build awareness among an active business community. show your friends and family the latest updates on your venture. show investors that you have community support. have a chance at winning the monthly $10,000 prize.

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Bonus Tips and Resources :::

10 Things 1. It’s never too late to start a new venture! to Remember 2. Identify the best opportunity. 3. A plan with strategies helps you focus on what matters. 4. Set procedures and policies to ensure consistency. 5. Success requires teamwork. 6. Commitment means results. 7. A balance of life and work is healthy and rewarding. 8. The ability to adapt and adjust strategies makes you stronger. 9. Attitude and approach influence everything. 10. You are the decision maker. We wish you and your idea the best of luck. Now what are you waiting for blob away. Local Resources Chamber of Commerce SBA – http://www.sba.gov SCORE – http://www.score.org Books and Magazines “Best Entrepreneur Books – Amazon.com “Top Life Balance Books for Entrepreneurs” – About.com “Novel Ideas” – Entrepreneur.com Web Sites and Blogs Ideas vs. Opportunities 105 Business Ideas The Top 25 Home-Based Business Ideas| How Bootstrap Entrepreneurs Adapt to Change 7 Ways Entrepreneurs Are Artists Continue To Be Persistent Preparing The Competitive Analysis Section Of The Business Plan Even A Solo Entrepreneur Needs a Team of Players The Art of Bootstrapping The 6 Biggest Mistakes in Raising Startup Capital

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Three Ways To Grow Your Business How To Grow Business Revenue Every Year The Top 5 Viral Facebook Techniques 19 Viral Marketing Techniques

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