Entrepreneur Report – Lab Connect LLC

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The Company

Lab Connect LLC was founded in 2002. It is a clinical research company that provides global central laboratory services including routine and esoteric laboratory testing, kit building, sample management, bio-storage and scientific support services for biopharmaceutical and CRO clients. The company has a unique combination of state-of-the-art technology, world-class laboratories, easy access to emerging markets and extensive specialized testing expertise, which means the drug development industry can rely on a single provider for all of their central laboratory service needs.

Target market

Its target market is small and mid size biopharmaceutical companies. Its target contacts are decision makers with titles such as Project Manager, Director of Clinical Operations, Clinical Research Associate, etc. with BS, MS or PhD degree, typically 35 to 50 years old, tech-enabled, but not necessarily tech-savvy.

They are disrupting an existing market. The current market size is about 4 billion dollars and the company has more than 20 competitors, including some billion-dollar companies such as Covance, Quintiles, and Quest. But the goal of Lab Connect is to develop a unique, distinctive and memorable brand to effectively differentiate from the much larger, more experienced competition. They want to promote the “decentralized central lab” concept with the messaging of “The world’s local central lab. Global reach. Local expertise”. As the CEO said, Lab Connect should be the “Toyota” or “Crate & Barrel” of the lab industry—connoting a well-designed product with good value. They are striving for a unique and differentiated “look and feel”. Some differentiating factors include connectivity and accuracy, humanness and “high touch” customer service, and high tech yet “user friendly”.

Positioning and Value Proposition

Positioning: The CEO wants to position Lab Connect as the “decentralized central lab” that provides biopharmaceutical companies with strategies for any phase of development, from target identification to commercialization, whether those companies require short- or long-term storage of their samples. He believes that proper sample management is a vital aspect of today’s clinical trials. Because samples may have to be retested for compliance, data or drug-safety reasons, a comprehensive bio-storage plan should be a part of their initial trial outline.

Value proposition: Lab Connect is focusing on taking customizable approach to meet clients’ protocol’s geographic and analytical needs, establishing regional laboratory hubs for site support, building industry leading specialty laboratories, providing unparalleled project management experience, developing innovative sample tracking and reporting technologies and keeping service oriented organizational culture, with solution driven mindset.

Channels and distribution

Since it’s a service company, its current sales channel is direct communications with decision makers of its target companies. They are taking a project management approach. Since the CEO used to work in the biopharmaceutical industry for several years before he founded his own company, he has a strong network in his target companies. He used to list all the primary contacts and let the sales people to call or visit them on a regular basis. Once they acquire a customer, they will have face-to-face meetings and start with project planning and hold routine project team meetings. They also have on-line collaborative tools with their clients.

Their customer acquisition is mainly through word of mouth. Starting from the CEO’s network in the industry, the company now has a stable customer group. Since the company did a good job in improving service quality and keeping a high switching cost, their retention rate is pretty high (around 22%, which is much higher than the industry benchmark). The company’s strategy is always focusing on increasing sales of existing customers. They’ve also tried email and cold-call sales to acquire new customers before, but didn’t achieve as many leads/sales as expected.

Entrepreneur Report – Nussbaum Group

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Lead by landscape architect Dale Nussbaum, the Nussbaum Group has taken landscape construction and maintenance to a whole new level.   While they do not design the landscapes they do provide the following services for residential and commercial clients: collaborative landscape construction services, comprehensive organic landscape maintenance services, efficient year-round maintenance of all types of irrigation and landscape lighting systems, annual color and container designs and installation, and holiday and event lighting.

The landscape construction and maintenance market is nothing new. The Nussbaum Group however is dedicated to an elevated attention to quality and success. Dale’s experience as a landscape architect positions him as an expert in the process of landscape design and implementation. Adept at speaking the languages of design and construction Dale has his company more valuable to his clients than a typical contractor. At first glance the Nussbaum Group feels more like a design firm than contractors. This is what sets them apart and has allowed them to disrupt the market.

The Nussbaum Group straddles and interesting line between B2B and B2C. While their end clients typically are high-end residences and small commercial spaces, most of the Nussbaum Group’s marketing efforts are directed at the design firms that bring them into a project. These firms ultimately act as evangelists passing the Nussbaum Group on to their own clients where they work together to install landscapes, and the Nussbaum Group continues to work maintaining the landscapes they’ve built.

To reach the firms that bring them into projects the Nussbaum Group relies primarily on referrals and direct contact through office visits and trade shows. These efforts directly reflect their commitment to quality and service. From a branding perspective their goal is to “look smart and appeal to the high design sensibilities of Architects and Landscape Architects.” Quality comes through in everything from their sleek graphics and consistent branding, down to the weight and finish of their paper stock.   In addition to the typical logo and pantone associations to their branding the Nussbaum Group has adopted chocolate as a key element in their marketing.

One super fun strategy they have employed, Dale refers to as “Doughnut Marketing”. They bring doughnuts to design firms around town that they do or would like to do business with. This allows the Nussbaum Group to stay present in the companies’ minds, and it facilitates an ongoing conversation unbounded by the constraints of a formal meeting. As their ability to collaborate is key to the Nussbaum Group’s offerings these conversations are all the more important.

http://nussbaum-group.com/home.html

Panel Write Up: Optimizing Pricing and Distribution Plans

Panel Write Up: Optimizing Pricing and Distribution Plans
Team ClearHome (Heather Lewis, Jeff Kinney, Mary Ke, Sarah Abramowitz, Sungjoon Kim, Michael Pamphlet)

Introduction
This past Monday, our class was fortunate to hear from three very accomplished and visionary entrepreneurial thought leaders; Leigh McMillan, VP of Marketing at Avvo, Steve Banfield, Digital Executive at Rightside, and Brant Williams, Founder of Tenacious Offense and Guided Products. The panel was a split discussion, first focused on pricing and distribution and then around customer retention and referrals. Each of these topics is relevant to our class start-ups as we begin to explore what it actually  looks like to take our products to market, and retain the amount of growth and engagement that we have established through our digital marketing efforts thus far.

Key Insights
The speakers gave great advice during our discussions of pricing and distribution. They had a lot to say regarding the importance of choosing the right business model to drive pricing strategy, and understanding the pros and cons of online retail channels vs. brick and mortar stores,  as well as  the importance of SEO as part of distribution strategy.

Before landing on a pricing strategy, it is critical that we think about our business model. For ClearHome, we assumed that our product would be sold as a one-time purchase of the in-home air quality monitoring device and we would provide the app as just part of the deal. However, Brant Williams challenged us to think about whether we were selling the “razor” or the “blade”. In other words, are we focused on being profitable against the one-time purchase of the platform, or is the platform simply the open door for ongoing customer purchasing for services or add-on benefits?

In this vein, Leigh McMillan stated, “Once you have shown people there is something they can take advantage of, you have the ability to show them volume for other solutions. Get as many out there as possible and as we present problems to them with the mobile app, we make money on the backend as the entity providing the solution.” With just a business model, we may not price the device as high-end but instead competitively to increase our adoption. These were great points that our team has now taken into consideration. Similarly, she suggested that we make the app available for free download with limited functions. As users became more engaged with the app they would be encouraged to buy the hardware device in order to receive all the benefits of the product.

In thinking of distribution channels, it matters how we want to cut our profits across distributors and which channel would be most effective at getting the attention of our audience. Traditional retail may not make the most sense for us, considering the high margins taken by the stores and the fact that our potential customers are not yet aware of the ClearHome brand, and our device may suffer from bad placement on big box distributors’ shelves. Instead, we should leverage online retail to go directly to the consumer, and save significantly on shipping (single shipping for an online retailer such as Amazon, versus multiple shipping to a brick and mortar distributor). However, there are pros and cons to selling directly from our site and using other eCommerce platforms, such as Amazon. With our own site, we would not have the brand awareness to reach as many customers as established channels, like Amazon. However, with established channels comes cuts to profits. Online retailers are a friendlier place to distribute. Traditional retail usually results in a $10 sale price if the cost of goods is $1. Approximately 40% goes to distribution costs. Think about Pro.com and Porch, they are serving the connector role between consumers’ money and the services they want.

They also cautioned that if we do elect to go through traditional retail as a distribution channel, we have to be careful to avoid channel conflict. If we decide to later incorporate online sales and start selling our product online for a lower price than in stores, box retailers will be alienated and will be concerned about experiencing a drop in their margins.

We also were reintroduced to SEO as a channel strategy. This was a significant paradigm shift for many people in the class and on our team. Whereas, we often thought of SEO as the amplifier to a channel, Leigh McMillan positioned it as such a vital part of her lawyer business that it essentially was at the top of the channel strategy for her. According to Leigh,”You need to create liquidity in the market.” Her company created a free Q&A space, allowing consumers to get free answers to their questions from actual attorneys. This service was good for both customers (who received responses) and lawyers (whose expert answers worked as free advertising for their services). All the while this resulted in detailed, long-tail content which is valued highly by Google, particularly questions formatted as How Do I…? Leigh was strategic in her formatting, adding key words that would assist in the SEO, and she was careful not to tag duplicate content. Leigh also used referrals and offered a first-time complimentary service to new customers, resulting in more traffic and ultimately more search power to her site. Similarly, this quality SEO allowed her company to initially get around branding and recognition. Once this SEO strategy resulted in significant traffic, they then shifted to accelerating their growth which requires gaining consumer trust, by creating a known, recognizable brand. This multi-pronged SEO strategy could be a critical part of our ClearHome plan, especially with a new product space like home air quality assistants, because the market is not yet saturated.

Torch Illumination

I had the opportunity of interviewing the founder of Torch Illumination, Lisa Ravenel. She started Torch back in 2010 whilst she was still in college. Initially, her goal was to make enough money from the business to cover school expenses however, Torch has evolved into an artisanal candle making company that seeks to create a lasting social impact in the area of reforestation.

According to Lisa, Torch is a result of a google query for “businesses with zero startup costs”. She was determined to start and run a business she could enjoy without any huge upfront capital investments. From its early beginnings, Lisa has validated and improved her line of candles through feedback from her friends, relatives and coworkers who also became customers and ambassadors of Torch.

Candles produced by torch are handcrafted from natural soy and recycled glass containers. With the purchase of each candle, a tree is planted. This is made possible through partnership with the Arbor Day Foundation. A big differentiating factor between Torch and other artisanal candle makers is its social mission which has become a source of competitive advantage in this market. The company also emphasizes its all natural and recycled product components which is also another differentiator.

It relies on social media channels mainly Facebook, Twitter and Pinterest to interact with its customers. It primarily retails through sustainability and local themed stores in Washington State. Torch’s line of candles are also available on Amazon and its website. Torch uses social media to inspire its customer base and to inform them about new product lines and scent profiles. The company targets key decision makers for home purchases who are mainly women between the ages of 20 and 50. It also caters to weddings and other custom orders.

A successful fundraising campaign on Indiegogo was useful in broadening the customer base and encouraging trial of the candles. This campaign proved useful for Torch as it generated some buzz on its social media platforms and collected data on its customer preferences for the scents it has developed.

All in all, my interview with Lisa proved to be a great learning experience. I learnt how valuable it is to run a business you genuinely enjoy or are passionate about, oftentimes it can be the key factor to success.