Sunday, 31 January 2016

8 Frequently Asked Questions on Stock Options in Startups

Stock options are an extremely attractive way to attract, motivate, and retain startup employees. Thousands of employees at Google, Microsoft, Facebook, WhatsApp, and other companies have become millionaires through stock options, and stock options are an important element of compensation for Silicon Valley technology companies as well as many other companies. This article discusses eight of the most frequently asked questions about employee stock options in startups.


How Does a Stock Option Work?


A stock option gives the recipient the right to acquire company common stock at a set exercise price established at the time of grant of the option. If the option is granted early in the life cycle of the company, it will likely be at a favorably low exercise price.


A typical grant is as follows: Sue Smith receives options to acquire 10,000 shares in Company X at 10 cents per share. The options are earned or “vest” over a 4-year period if Sue continues to be employed by Company X. She has a cliff vesting of one year (meaning she has to be at the company at least one year before any of her options vest, and at the end of that one-year period, she has vested a quarter of her options).


If Sue stays at Company X for the full 4 years, she has the right to exercise all of her 10,000 options at the exercise price. The exercise price is set at the time of the grant of the option at its then fair market value. If she wants to exercise her options, she then has to pay the exercise price times the number of shares (10 cents times 40,000, or $4000).  Hopefully, when she exercises her options for 10 cents a share, the value of the shares has gone up significantly.


How Many Options Should I Get as a New Employee?


There is no formula as to how many options a company will grant to a prospective employee. It’s all negotiable, although a company may have its own internal guidelines by position within the company. And what is important is not the number of options, but what the number represents as a percentage of the fully diluted number of shares outstanding. For example, if you are awarded 100,000 options, but there are 100 million shares outstanding, that only represents 1/10 of 1% of the company. But if you are awarded 100,000 options and there are only 1 million shares outstanding, then that represents 10% of the company.


What Tax Do I Have to Pay for Stock Options?


There are two types of stock options under the tax code: Incentive Stock Options (ISOs) and Non-Qualified Stock Options (NSOs). Most employees typically receive the more tax advantaged ISOs. The tax treatment for ISOs is as follows:



  • There is no taxable event at the time of the grant of the option.

  • There is generally no taxable event at the time of the exercise of the option.

  • At the time of the exercise of the option, the spread between the exercise price and the value of the stock will be taken into account for determining whether additional tax is owed under the alternative minimum tax rules.

  • At the time the stock acquired from the exercise of the options is sold, that will be a taxable event. If the stock has been held both for more than two years from the date of grant of an ISO and more than a year from the date of exercise, all of the gain will be taxed at the more favorable capital gains rate; otherwise, all of a portion of the gain will be taxed at the ordinary income tax rate.


NSOs have less favorable tax treatment, and the spread between the exercise price and the value of the stock at the time of exercise will be taxed then at ordinary income rates.


How Long Do I Have to Exercise a Stock Option?


The stock option agreement and stock option plan lays out the time periods for when an option has to be exercised. Typically, as long as you remain an employee, you will have 5 to 10 years to exercise the vested portion of the option. But if you are no longer employed by the company, you typically only then have 30-90 days after termination to exercise the vested portion of your option (determined as of the termination date of your employment).


Are There Any Downsides to Stock Options?


The key downsides of stock options are:



  • You typically have to pay cash to exercise the options.

  • At the time you exercise the option, you may incur a tax depending on your particular alternative minimum tax situation or the type of options you hold.

  • When you exercise the stock options, you will receive stock that will not be easily saleable if the company is still privately held or is subject to substantial transfer restrictions.

  • The value of the stock could go below the exercise price you have paid for the stock, which is why many option holders wait until a liquidity event to exercise options.


How Does the Capital Structure of the Company Affect the Value of Stock Options?


Stock options are typically granted for the right to purchase common stock in the company. If the company has preferred stock, the liquidation preference of that preferred stock has to be paid off first before the common stock gets anything on sale of the company. Similarly, if the company has debt, that has to be typically paid off first before the common stockholders receive anything on a sale. So if the company has a lot of preferred stock and debt outstanding, the value of the common stock may be adversely affected.


Can I Transfer My Stock Options or Stock?


Most stock option agreements and plans restrict or prohibit the employee from transferring his or her options or stock. The specific restrictions are contained in the stock option agreement or the stock option plan of the company.


What Can I Negotiate to Get Better Terms for My Stock Options?


Most companies won’t negotiate the terms of a grant of stock options. Sometimes exceptions are made for senior employees. Here are items sometimes requested by prospective employees:



  • Monthly vesting instead of cliff vesting

  • A longer period than 30-90 days to exercise options after termination of employment

  • Accelerated vesting of a portion of the stock options on termination of employment without cause

  • Accelerated vesting of a portion of the stock options on sale of the company

  • A shorter vesting period than the typical four years

  • Grant of additional bonus options on achieving various milestones or performance goals


RELATED: How Employee Stock Options Work in Startup Companies



Author’s note: Many thanks to Jason Flaherty, a partner in the Compensation and Benefits Group at Orrick Herrington & Sutcliffe in San Francisco, for his review of this article.


Copyright © by Richard D. Harroch.  All Rights Reserved.


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Friday, 29 January 2016

5 Tips to Quickly Boost Your Credit Score

As you’ve probably figured out by now, your credit score is a pretty crucial element to your adult life. That three-digit number is a significant determining factor in your ability to purchase a home or car, get approved for a small business loan, improve your credit card interest rates, and more. Bottom line, you need that number to be in good condition.


Of course, before you can work toward boosting your credit score, you first need to know what it is. Make a habit of checking your credit report at least once a year (and more often if you plan to shop for a loan in the near future) with each of the three major reporting agencies—ExperianEquifax, and TransUnion.


Each lender has their own standards for what makes a good or bad credit score. But to give you a benchmark, here are our general guidelines at Fundera:


By our standards, a credit score above 700 is considered excellent. If your score is in the 600’s, that’s around average but still considered fundable in most cases. A score below 550, on the other hand, is considered poor, and may seriously impact our customers’ ability to secure a business loan.


If a less than stellar credit score is holding you back from your financial goals, it’s time to take proactive steps to improve your credit history. While there’s no such thing as an overnight fix, here are five tips you can implement today to start the process of boosting your personal credit score.



  1. 1. Fix Any Errors On Your Credit Report


Errors on our credit reports are not as uncommon as we’d like to believe. In fact, an FTC study found that as many as one in five people suffer from errors on their credit report! These errors could be the reason someone is denied a loan or has higher interest rates on a large purchase. After those errors were disputed, the study showed that approximately one in twenty had a maximum credit score change of 25 points—talk about a quick boost! 


Whether a case of mistaken identity, bad debt that was falsely reported, or even a case of identity theft—any number of issues could cause discrepancies which may impact your credit score. So again, check your credit report at least once a year with each of the three major reporting agencies, and if you encounter any errors, contact the credit bureau in writing to dispute the report.



  1. Raise Your Credit Limit


Increasing your credit limit doesn’t mean you should be increasing your spending. In fact, the more credit you have available to spend, the better it looks for your credit. It’s called the utilization rate.


The utilization rate is calculated for each individual card in your name. It doesn’t look good if each card it maxed out, or almost to their limit. According to Bank Rate, you should aim to keep your utilization rate below 20% to optimize your credit score.



  1. Pay Down Your Balances


We get it, you may not be able to pay every one your credit cards off right away. After all, that’s why most people have credit cards in the first place, right? But, just as we mentioned, your utilization rate is important when it comes to your credit score. Reducing your debt is a good way to quickly boost your credit score.



  1. Don’t Close Old Credit Accounts


Now that you’re on a mission to quickly boost your credit score, you may pay off some credit cards or other old debts. That’s a great idea! But go ahead and keep those accounts open even after you’ve paid them off.


Many people assume that they should close out any old accounts they aren’t using, but canceling an old account can actually do more harm than good. Here’s why:


When FICO calculates your credit score, they take a look at your credit card history; having a long standing credit account can impact your score by as much as 15%. Plus, having a variety of credit lines may positively affect your score by up to another 10%.


The idea of having multiple credit accounts not in use also goes back to the idea of credit utilization, which makes up 30% of your overall credit score.



  1. Pay Your Bills on Time


This one may be obvious, but it can’t be overstated. It is absolutely critical that you pay your bills on time, every time.


Any delinquent payment that gets sent to a collection agency could potentially stay on your credit report for up to seven years! That is not baggage you want to carry around.


Make a plan to catch up on any late bills before they get sent to collections, and consider setting up your bank account to make automatic payments. Whether your late payments are an issue of cash flow or of organization, do what it takes to get a handle on your debt payments.


Whether you’re applying for a business loan, trying to buy a house or car, or just living your everyday life, your credit history is extremely important to your financial future. So make a point to pay bills on time, keep track of your open credit accounts, and check your credit report for errors at least once every 6 months to a year. If you follow our 5 tips to quickly boost your credit score, you should be on your way boosting your credit score quickly!


The post 5 Tips to Quickly Boost Your Credit Score appeared first on AllBusiness.com

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How to Use Google Analytics to Help Shape Your Marketing Strategy

If you’re not familiar with Google Analytics, it can be a little daunting at first. With so much data available to dig through, it’s hard to know where to look to find the most important metrics.


Marketers that want to better understand their audience, and strengthen their marketing strategy, need to know how to best utilize all of the data available inside Google Analytics.


Without knowing which sections to pay attention to, you could spend hours digging through the platform and walk away with your head spinning.


Similarly, without analyzing your website traffic, it’s hard to assess the effectiveness of your current marketing strategy and know when it’s time to make a shift.


If leveraged correctly, Google Analytics can provide valuable insight into who visits your website, how they got there in the first place and what pages they spend the most time on; this is powerful data for marketers that can be used to enhance their strategy.


An Overview


Google Analytics is a powerful tool for brands, bloggers or businesses alike. Through use of Google Analytics, you can uncover a tremendous amount of data about your website that can be used to enhance your marketing and business development strategies.


The back end of Google Analytics is broken down into eight main sections: Dashboards, Shortcuts, Intelligence Events, Real-Time, Audience, Acquisition, Behavior and Conversions.


GA Sections


Almost all eight sections contain sub-sections that provide a ton of data, but not all sections are critical for marketers to pay attention to.


Before we dive in to the sections that matter most to marketers, let’s get familiar with some basic Google Analytics terminology:



  • Users: These are people who have visited at least once within your selected date range, and includes both new and returning visitors.

  • Dimensions: These are descriptive characteristics of an object. For example, browser, exit page and session duration are all considered dimensions.

  • Metrics: These are individual statistics of a dimension, such as Average Session Duration or Screenviews.

  • Bounce Rate: This is the percentage of single-page visits, meaning that someone left your site from the same page at which they entered; aka, they didn’t interact with your site.

  • Sessions: A session is the period of time that a user is actively engaged with your website.


Now that you’re familiar with the Google Analytics sections and terminology, let’s dive in to the areas that you want to pay most attention to in order to save time and strengthen your marketing strategy.


Zeroing in on what matters most


There are three sections that matter most to marketers: Acquisition, Audience and Behavior.


Audience Section


The Audience section provides a tremendous amount of data about your website visitors. It contains multiple subsections that provide information about the gender, age and location of your website visitors. You can also uncover information about their interests, as well as the browsers and mobile devices used to access your site.


The Acquisition section will provide detailed information about how people arrive to your site. Digging in to the “All Traffic” tab will show you exactly how people are arriving at your website – whether it be a search engine, social media site or blog that you’re a contributor for.


Aquisition Section-google-analytics


The Behavior section helps you understand how people are interacting with your site. You’ll visit this section to better understand which pages on your website are the most popular.


Behavior Section-google-analytics


Focusing on these three sections will help you save time when digging through Google Analytics.


When used together, the information uncovered can help you make decisions about which marketing efforts (be it guest blogging or social media posting,) are most useful in driving website traffic.


Analyzing these sections within Google Analytics will provide you with insight that will enable you to make smarketing (smart, marketing) decisions about the type, tone, and placement of content that you use on your website.


Traffic Channels


Before we dive into who exactly is visiting your site, it’s important to understand how they’re getting there.


To see your various traffic sources for a set period of time, go to the Acquisition tab and click the “All Traffic” dropdown. Select the “Channels” button, set the time period at the top of the viewing pane and scroll down to see the results for the give timeframe.


Channels View-google-analytics


Here’s a simple breakdown of what these different channels mean:



  • Direct: Visitors that came directly to your website. They either typed your URL right into their browser, clicked on a bookmark or clicked a link in an email. Direct traffic is a strong indicator of the strength of your brand.

  • Organic Search: You can thank search engines like Google and Bing for these website visitors. An organic visitor is someone who got to your website by clicking on a link from a search engine results page. A lot of organic traffic is a strong indicator of the value of your content and SEO strategy.

  • Paid Search: You’ll find any paid search (think Google AdWords) campaigns in this viewing pane. A lot of paid search traffic means that you’re Google AdWords are working well.

  • Referral: This represents visitors that clicked a link on another site to land on your website. Years ago, before social media was what it is today, all other traffic (that wasn’t direct or organic) fell under the referral tab. Within the past few years, Google created a separate tab for social traffic, which makes it easy for marketers to focus in on just the websites that are driving traffic to their site. If you guest blog, this is the section to visit to see how much traffic is being driven to your site from your guest blogging efforts. A lot of referral traffic means that you’re being talked about (and linked to) from multiple other websites.

  • Social: As a social media marketer, this is my favorite section within Google Analytics because it shows me exactly what social media channels drive the majority of traffic to my site. This data can be used to shape your social media strategy.

  • Email: The number of visitors that came to your website from an email campaign. If you do a lot of email marketing, you’ll want to dig through here to see how effective your campaigns are.


Looking at the traffic channels will allow you to see which channel is the largest driver of traffic to your site. You’ll notice that the Channels are listed in order of driving power; the Channel at the top is the one that drives the majority of site traffic.


To dig deeper into the data, click each Channel to see more information.


For example, when I click Social, I can see the entire list of social media sites (again, listed in order of most to least powerful) that drove traffic to my website during the selected timeframe.


Social View-google-analytics


Analyzing the power of different channels will help you decide which efforts to focus on, and potentially spark ideas to increase traffic from other channel types.



Here are a few ideas to increase traffic across all channel types:



  • Direct: Share the link to your website with friends and family the next time you’re with them. Tell them to type it directly into their browser and voila! You just got a nice direct traffic boost.

  • Organic Search: Make sure that you’re utilizing H1 and H2 tags, meta descriptions and keywords in all of your website pages and content updates. The stronger your SEO, the greater likelihood that someone will find you on a search engine.
  • Paid Search: Try adjusting your keywords and/or targeting options to make your ads more relevant.

  • Referral: Start reaching out to popular blogs and forums in your industry to see if you can guest post or perhaps be featured on their site. Contributing content to other sites is a great way to increase your referral traffic.

  • Social: Increasing the frequency of your posting, and the number of links you share on social media will undoubtedly result in a boost of social traffic. I recommend increasing your efforts on one channel at a time to see what drives the largest impact. For example, make February your Twitter month; aim to tweet a lot of links that drive back to your website and at the end of the month, analyze the website traffic. Then, come March, turn that attention over to Facebook and see which social channel drove more traffic. (If you want to learn how to see which social media channels drive the most traffic to your website, refer to this Kissmetrics blog post that I wrote on setting up Advanced Segments.

  • Email: Start including more calls to action and links in your email campaigns. Make sure that your calls to action stand out in your email templates and serve to drive people back to your website.


Once you’ve implemented some of these ideas, take the time to review the Channels breakdown again to see the impact of your efforts.


If your efforts to grow traffic from one channel go unnoticed in your analytics, try a different one!


For example, let’s say you have a ton of referral traffic and very little organic traffic. If your attempts to improve SEO and grow organic traffic have little impact, it’s probably not worth the effort. You’re better off continuing to guest blog, as it’s proven to be a critical marketing activity that is worth your time and effort.


Audience Demographics


Understanding who is visiting your site in terms of their age, location and gender is the best way to tailor your site to suit their interests and preferences.


If you want your website content and imagery to appease and resonate with your audience, you need to know who they are.


To find this information, head over to the Audience tab. You’ll want to focus on the sub-sections of Demographics and Geo.


First, let’s look at the Demographics of Age and Gender.


As you can see, the majority of my website visitors are aged 25-34, followed by those aged 35-44.


Age View-google-analytics


Knowing this, I aim to create content that is geared towards, and valued by, young professionals. Some examples are tips for professional development and advice for managers leading a team of employees.


Understanding how old your website visitors are, and whether they’re male or female, is helpful if you’re looking to capture their attention when they land on your site.


For example, if 90% of your website visitors are women, you could deliver a more personalized website experience for them by starting your “About” or “Welcome” page with “Hey ladies!”


Gender View-google-analytics


Through analyzing the Gender section, I can see that the majority of my site visitors are female. It’s not skewed too heavily though, so I don’t want to tailor my site to females only. That’s why I’ve chosen my website colors to be black, white and green; I wanted to create a sleek and clean aesthetic that would be appealing to both men and women.


Digging in to the age and gender of your website visitors is useful if you want to craft creative content for your blog posts and website pages that captures their attention and gains their trust.


For example, telling your fans to “Treat yo self” to a free guide on your website isn’t going to resonate with individuals in their 60’s. However, it WILL get a chuckle from millennials.


Finally, you want to look to see where your website visitors are from. Looking at the Location tab under the “Geo” dropdown will show you the countries, states and cities of your website audience.


Countries View-google-analytics


When you first click “Location” you’ll be shown the list of countries. Not surprisingly, the majority of my website visitors are from the United States.


Looking at the different states is a great way to gain insight that can be levered for any AdWords or paid Facebook campaigns you’re going to run. You want to target those states and cities that you see are frequenting your site.


States View-google-analytics


I can see that New York dominates the results by a large margin. That’s not surprising since I live there and the majority of my mentors, friends and family live in New York as well.


Clicking on the individual states will bring you to the list of cities, within that state, that your website visitors come from.


Cities View-google-analytics


Since I currently live in Buffalo, I’m not surprised to see Buffalo and other Western New York cities at the top of the list. I also see New York City, which is expected since that is where the majority of my friends and family reside.


If you don’t see your city as the top city, you might want to consider shifting your marketing strategy, and content, to target those in your geographic area.


Content Drilldown


Last but not least, it’s important to dive in to the content to see which pages people spend the most and least time on.


To do this, click the Behavior tab and go to the Site Content drop-down. You’ll want to look at the Content Drilldown, as well as Landing and Exit Pages to see which pages are most viewed on your website.


Content Drilldown is the overview of which pages on your website are visited the most.


Seeing which pages, and blog posts, are most viewed by your audience is helpful in guiding your web development strategy; you want to create more of what works.


Content Drilldown-google-analytics


Through analysis, I can see that my homepage and services page are the most popular. I can also see that the page on my site that has all of my marketing blogs is more popular that the blog page itself, which shows me that my audience values marketing content.


Now, you want to head over to the Landing Pages view in order to see what pages people are landing on when they get to your site.


The Landing Pages view is a good indicator of the effectiveness of your social media and promotional strategy, as you hope to see the blogs and website pages promoted most at the top.


Landing Pages-google-analytics


For me, that would be my homepage, services page, free social media guide page and Bravery Beats blog post. Those pages are the ones that I promote the most, as they provide the most value and information that I find relevant for my audience.


It’s important to me to see my free social media guide at the top of the landing page list, as this page is a free giveaway that I’m using in part to provide value, and in part to build my email list.


Analyzing the traffic of this page is a good way for me to assess both the value and popularity of the giveaway.


If you don’t see your most important and/or promoted blog posts and website pages in the list of the top ten landing pages, it’s time to either reevaluate their value and/or your promotional strategy to ensure you’re driving traffic to those pages through social media and email marketing campaigns.


Spending time in the behavior section will allow you to develop an awareness of what content your website visitors find the most valuable. You can use this as a guide for what works (and what doesn’t) when it comes to blog topics and page types.


For example, if you notice that the top visited pages are all blog posts about social media, yet none of your design blogs are ranking in the top, you want to spend more time blogging about social than you do about design.


Conclusion


Google Analytics is an incredibly powerful tool.


By paying attention to the demographics of your audience, you’ll be able to create content and imagery that you know your audience desires. This allows you to craft a customized and relevant site experience for your audience that will keep them coming back for more. (Thereby increasing your direct traffic!)


When you start monitoring your referral traffic, you’ll start to see which guest blogs are helping to increase your online visibility. This will help you save time by focusing only on the guest blogs that provide a return (in the form of website visits) on your content creation efforts. Similarly, by diving in to your social referrals, you’ll be armed with data to decide exactly which social media channels are the best to share your blog posts on.


By utilizing, analyzing, and focusing on these various sections within Google Analytics, you’ll have a deep understanding of who your audience is, what they want and how they find you.


About the Author: Julia Jornsay-Silverberg is a social media marketing consultant and coach with a passion for helping small businesses use social media to build brand awareness and connect with customers. Check out her free guide, “Socially Strategic” to help you get started strategically on social media. You can also find her on Twitter and Periscope.




Thursday, 28 January 2016

The Five-Step Process for Writing Powerful Call-to-Actions By Reverse-Engineering Customer Mindsets

For me, growth hacking is more than just a mindset. It’s about the desire to take tradition and flip it on its head. It’s about leveraging the way we’ve always done things and manipulating those processes to achieve a much better result. It’s about the various interpretations of data and the creative inspiration we draw from them to solve problems and create opportunities.


If you’re growing a product or a startup, you’re probably already aware of the importance of testing which calls-to-action drive the most adoption. Without supplying a nudge for a user to take action, you might get no traction at all, even though your offering may be outstanding.


A call-to-action is the final frontier, separating the discovery of your product’s value proposition and the actual journey a user will take to experience it. It’s like the starter’s gun on track day. After you have attracted users (i.e., runners) who have found the start line, then you need to motivate them to run the journey to the finish line (being a point at which your business objectives are met, such as making a sale, hopefully repeatedly).


Where to begin, though? You could start with the usual “buy now” or “start today” and keep A/B testing to find the most frictionless point of entry. But that approach, even though it may be effective, assumes what you’ve seen elsewhere is “best practice” and therefore should work.


What if you had a starting point so powerful it was almost an unfair advantage? Enter the psych-dive.


How Did This Come About?


I sat down with a psychologist friend of mine the other day, and after all the pleasantries were exchanged, we got to talking about product growth and human behavior. While I’m sure most psychologists are used to putting people on the spot, it was an interesting sight to see how uncomfortable I made him with the question I posed.


I asked something along the lines of: “Michael (name changed to protect his professional integrity), you deal with people and data sets all the time, and you know all about psychological profiling and making educated assumptions in order to help people overcome compulsions, right?”


“Yes,” he nervously replied.


That was my green light. “What would you need to do to turn the tables? To use profiling and data-driven stereotyping to amplify a compulsion?”


He paused, conflicted, partially by the thought of flipping his power for doing good on its head and partially by the surprise of such a request.


What followed was a discussion of the process one could use to profile, generalize, and deconstruct marketers’ tendencies to create more impulsive calls-to-action.


Flipping the Way a Psychologist Cures Compulsion


The main building blocks for the way a psychologist helps someone out of their compulsive need to do something include the following: helping them understand themselves, their habits, and their psychological needs and helping them understand how they use an addiction to fill those needs in an unhealthy way. A psychologist then helps them find new, healthier ways to address those needs (like using exercise to feel better instead of drugs).


ocd-cognitive-modeling


Cognitive Modeling of Obsessive-Compulsive Disorder (Source Paul M Salkovskis, Elsevier)


Theoretically, to reverse-engineer that process and increase the likelihood that someone would become compulsive around a product, you would do the opposite. You would try to keep them from being aware of themselves and their habits. You would keep them out of touch with themselves, and encourage them to use an easy, quick-fix solution.


This is already happening in real life. People use Facebook unconsciously. Users have never made an active decision to start spending a lot of their time online looking at other people's posts and photos. It just happens.


People rarely say they LOVE Facebook, or that Farmville is the BEST. They probably say something like, “I waste waaay too much time on Facebook” or “I spend sooo much money on my farm.” This compulsive relationship, albeit seemingly invasive, is a sign the user has been drawn in to the experience and is there to stay.


Ethically, there also are a lot of questions to answer here. Yes, your business needs to make money. That's the bottom line. However, at the same time, each person and business has some decisions to make about "how bad" something is. Most of us wouldn't rob people at gunpoint even if it was rather profitable, because that's just wrong. But most of us wouldn't feel too bad about selling chocolate cakes, even though chocolate cakes are technically bad for people.


Somewhere on that scale is a place where it starts to get a little gray. Is it unethical to deal drugs to poor people who can't afford them? Or, are they the ones who decide to buy the drugs and you're just providing a service? In other words, how comfortable are you with your business model and the extent to which you encourage/market/manipulate people into wanting your product?


With that said, here’s how to immerse yourself in the deep workings of your target audience for better calls-to-action.


Psych-Dive Analysis for Better CTA Triggers


Different segments of society are compulsive in different ways. You have an aging demographic that was brought up in the era of glorification of cigarettes and alcohol (before cigarette companies started to pay out compensation for smoking-related impairments), just like you have a sector of the technologically-native young adults who take to Snapchat and Candy Crush as if they were the only things keeping them interested in life.


Here are four steps for how to uncover compulsions in your key target audience and craft better calls-to-action from the get-go.


Step 1: Craft a Survey


To craft brilliantly effective calls-to-action laced with compulsion, you need to get a solid idea of how your typical market segment thinks and acts with other things generally considered compulsive behavior. These types of assumptions are easy to guess, especially if you classify yourself as similar to the very users you’re trying to target. But, like most assumptions, it’s easy to get it wrong.


Clarity around how your users become compulsive can only be achieved with research. If someone else has already done the hard work and you find your answers via a research piece on Google, then great. But, chances are, what has worked for someone else might not work for you. If, like 99% of scenarios, existing data just doesn’t cut it, you need to take charge and source these answers yourself.


The most effective (albeit, most annoying to respondents) method is a survey. It’s important to be concise if you intend to get a decent rate of response. I always try to keep my questionnaires to a maximum of 10 questions, and largely base these around behaviors. Behavioral questions are some of the most powerful insights into your target market because they unlock answers about how the user’s mind operates. I also ensure absolute anonymity to increase the likelihood of natural responses.


Questions you ask here should serve the purpose of unlocking insights into the behavior of your target audience. These are questions that, once collated to create an overall persona, tell you exactly what motivates their actions.


With limited bandwidth, each question in your survey needs to count. So how do you decide what to ask? Humans, regardless of demography or psychography, always “want” something. Generally those things include elements of personal, social, and career life. Here are three things to consider when formulating questions for your survey:


Biological Compulsion


It’s easy to understand and relate to biological urges to eat and sleep. Questions that relate to demand-based acquisition of biological needs and desires that truly make us “human” can unlock a lot about what intrinsically motivates a user. Biological compulsions cannot really be switched off, and they drive our very existence.


deliveroo-cta


Primal instinct at its finest. Deliveroo’s “Find Food” call-to-action says it like it is.


Experimental and Social Compulsion


Another great avenue for discovering compulsion is to explore things like relationships, social interactions, and drug and alcohol use. These types of insights can tell you if a user relies on external influences to trigger a decision. A great CTA in this instance would be something like “Join your friends” or “Let’s socialize” because these tap into urges to be “connected.”


meetup-cta


When all you want to do is belong, click Meetup’s “Start a Meetup” call-to-action.


Aspirational Compulsion


Finally, studying attitudes about money, career, and material things can help you understand how a user may be motivated to part with their money to make a pain point go away, as well as what their end goals are in life. This assists with understanding what angle you need to take in order to get a user to believe they “need” your product. If you’re aware that your target audience is driven by the desire to excel in life, you’ll be able to create a CTA that reflects this, like “Make money now.”


uber-earn-cta


By tying in the money aspect, Uber’s call-to-action attracts exactly the type of driver they want.


It’s also a good idea to provide an incentive for completing the survey. This method may be frowned upon by market research experts who argue that an incentive will skew results. But I’m of the belief that, with enough responses, those that are skewed positively or negatively will be outweighed by the respondent majority. SurveyMonkey has a great little guide to calculate how many responses you need for statistical confidence.


The incentive could be as simple as offering use of your product for free for the first year, or a substantial discount, or a limited early access. Alternatively, it could pay to supplement your survey with incentives of products or services that target the same market segment you do (for example, a free three-month trial of a non-competing and popular SaaS product).


The way to do this is to include an optional field at the end of the survey that asks for an email address and stipulates that the email will only be used to notify the person about their eligibility for your incentives.


Step 2: Find Your Market


Once you have your survey and incentives ready, it’s time to get your target audience to actually take your survey. Finding people to complete it can be hard. If your target audience is easy to locate physically, try going there and asking as many people as possible to take it. If you have contacts that are highly influential in your target market, try to leverage them.


Alternatively, you can always post your survey to an online medium that your target audience uses prolifically. Or, you can demographically and geographically target your audience through paid advertising.


For example, we compiled a survey at GRONADE for a recruitment startup. Once the survey was ready to go, we sent it out to the founder’s existing database. We supplemented those responses using LinkedIn’s ad targeting system, targeting by job role, seniority, and geography, for better quality survey results.


linkedin-audience-targeting


Targeting the right audience for a survey using LinkedIn


Step 3: Supplement Your Data


When you’ve collected your responses and have an idea of what the general consensus is about the behavioral activity of your target audience, it helps to get extra context. A good idea is to take your target market criteria and search for census and journal research data that provides supplementary information about your target audience.


For example, if you’ve discovered that your dominant target market is entrepreneurs in Silicon Valley, it might be beneficial to also search for information about what they earn, how uncomfortable their living arrangements are, or even how well they do at mathematics (see page 45 of the 2015 Silicon Valley Index). This helps you build a complete profile of your audience and helps you make better decisions about what might motivate them to click your call-to-action.


compulsion-journal


Searching Google for related journals on the survey topic


With census data, you get a very particular insight into household, employment, financial, and cultural information. Some journals and other market research (which has been made public) might help you understand saturation data around device and app usage, and maybe even motivations for what makes a specific user set purchase.


Step 4: Create Hypotheses about Your Market


So now you have your collected your survey responses and supplementary data. This collection of knowledge about your potential user base is pretty powerful. With this information, you’re able to create hypotheses around what makes your audience “compulsive.”


In any particular demographic, you're not often going to have just one psychological profile, but many. Every person has a pretty unique cocktail of needs, wishes, and desires based on who they are, how they grew up, and what's on their mind.


Here are some example assumptions from previous research we performed at GRONADE. If we were to address a segment of Australian males aged 18 to 21, some common threads we could leverage are:



  • Isolation: They feel lonely and want to be closer or more connected to other people. It’s the same reason people do ecstasy (which promotes feelings of closeness) as a drug and use Facebook – it makes them feel as if they’re bonding, they have friends, and there’s some kind of common ground.

  • Boredom: Life doesn’t seem interesting. Their job is boring and nothing new is happening. They need to find something to keep themselves entertained. This is where the thrill of trying something dangerous, like drugs at a wild party or solo skydiving, comes in to play. It’s also the driver of many television successes like House of Cards and Breaking Bad because they can immerse themselves in something far more exciting as an escape. They live vicariously through television characters.

  • Distraction: Things aren't going well. There is a problem at work, at home, with relationships, or they just doesn't feel good about themselves. They feel anxious, stressed, or worried. Something offers a distraction, often one that numbs or soothes the pain or stress. They’ll use any means to distract and relax, such as scrolling through Instagram, instantly responding to snaps via Snapchat, or they'll smoke. It’s a way to deal with anxiety at the expense of productivity.

  • Lack of purpose/accomplishment: They feel they are not achieving anything and not getting anywhere. Some habits, like playing World of Warcraft, Call of Duty, or Angry Birds make people feel as if they’re really getting somewhere or making a difference (like saving lives and becoming a war hero) and that makes up for the fact that their real lives don’t offer much sense of accomplishment.


Most people aren't very aware of their own psychological needs. If you ask someone why they bought a Ferrari, they will say, "because I have always loved cars" not "because I feel unaccomplished and having an expensive car makes me feel important and powerful" (i.e., it's signaling my status).


You could guess at someone's inner needs through lots of clues (such as appearance, behavior, and purchasing habits). Someone who buys expensive brand name clothing might be giving a clue that they care a lot about looking important. Or, it might be a clue that they care a lot about fitting in, so they buy what all their friends are buying.


Step 5: Call-To-Action Logic


Brainstorm a list of words that come to mind when you assess the results you have. When you have a healthy list of around 10 to 20 words, use Thesaurus.com to expand the set of keywords to a list of action words you feel will have the greatest impact.


Compulsion-Thesaurus


Use a thesaurus for alternative keywords to impact assumption trigger words


Select five of your favorite, most evocative keywords to kick-start your initial A/B test batch of calls-to-action. This is a good start for your experiment to learn the most effective call-to-action to use.


The best approach to find a CTA that works is to tap in to the fears and attributes you uncovered in your research. If we use the commonalities I mentioned above for middle-class Australian men aged 18 to 21, we could assume the following five calls-to-action would be a good foundation group. Of course, these should be tailored to the actual product you’re offering, though in these examples, I’m representing the most obvious results based on the research:



  1. Be Together, Now (playing on the isolation aspect and the longing for connectedness)

  2. Your Thrills Await (a counter to the boredom aspect)

  3. Escape Today (a ticket away from the mundane)

  4. Make a Difference (a way to satisfy the desire for accomplishment)

  5. Take Control (a real power move in a world where sometimes all seems out of control)


Conclusion


At the end of the day, you still need a compelling offer. If your product sucks, no psychological trickery is going to vacuum fat stacks out of someone’s wallet.


Apple never says, "If you use Apple products, you're smart, creative, and stylish.” It’s just implied.


If you have something people will feel good about using or buying and you can create a compelling action-point for your core target audience to begin the journey and use your product, it’s a much stronger position to be in.


To do that, you need to become intimate with who your target audience really is, how they behave, what makes them feel compelled to take action, and then speak their language to engage their trigger finger. If you can do that enough times and can keep them happy, engaged, and converting repeatedly on specific business objectives, that is a sure-fire recipe for growth.


About the Author: Tomer Garzberg is the CEO and Founder at GRONADE Growth Partnerships. They grow seed- and venture-capital-funded startups and enterprise products. GRONADE is a blend of man and machine on a mission to systematize growth. Say Hi on Twitter @TomerGarzberg.




9 Factors to Consider Before Moving From a Coworking Space to a Private Office

Moving offices can be a huge adjustment for you and your company–and if you will be getting your own private office space after starting out in a coworking space, you really need to consider how the move will affect your overhead and team morale. That’s why we asked nine entrepreneurs from Young Entrepreneur Council (YEC) the following question:


Q. What's one thing I need to do or consider when moving my company from a coworking space to a private office?


1. Your Team Members


Heather McGoughConfirm that it's something team members really want. Right now we're a mainly remote company with two dedicated desks at a San Francisco WeWork; local remote team members drop in every so often to cowork in person. And instead of team off-sites, I fly people in quarterly for team on-sites. By staying remote, we can work with some of the best people around the country. Right now I have team members in at least a half dozen geographies. –Heather McGoughLean Startup Company


2. The New Commute


Travis SmithWhen making a big decision like this, we often don't consider questions like: How will this affect my commute to work? Will I have to leave home an extra hour early to make it in on time? Am I making enough to warrant the increased roundtrip and likely trek through both rush hours? These are all questions that may not be on your mind but will undoubtedly be on your employees' minds. –Travis SmithV.I.P. Waste Services, LLC


3. Length of Term


Blake MillerIf you sign a five-year lease in your thirteenth month of business, be cautious of locking yourself into a position that you may not be able to fulfill later on. Consider revenue track record and trajectory, and negotiate the heck out of that lease. –Blake MillerThink Big Partners



4. Culture


Ben LangWith a coworking space, you don't really need to worry about the culture because the space does that for you. But in a private office you need to invest in the culture (e.g., the art, lounges, food) and everything related to the office space. You want to check how much you can invest in that before moving as it's very important for team morale. –Ben LangMapme



5. The Fine Print


David EhrenbergIt's important to know what you're getting into when signing a commercial lease. If you have primarily been working with coworking spaces that have very flexible guidelines regarding rent termination, maintenance, and even on-premise pets, the move to a more traditional space can be jarring. Make sure you are clear on your lease terms (think growth!), rent amount, obligations, and dos/don'ts. –David EhrenbergEarly Growth Financial Services


6. Losing Out on ‘Global Mobility'


Ross BeyelerCoworking companies such as WeWork and Regus have global networks of offices with memberships that can accommodate "hopping" from one space to another. When moving to a private office, you might be sacrificing this sort of mobility. Consider whether your company would benefit from a single location that customers come to or multiple locations closer to your customers. –Ross BeyelerGrowth Spark


7. Utilities, Maintenance, and In-Office Resources


Reuben YonatanWe underestimated the overall cost of monthly utilities and recurring office cleaning costs. Be sure to weigh in the costs of all utilities, electricity, heating/AC, Internet, TV, and phone. We're paying a total of $400 per month more than we anticipated. The cleaning services are another unexpected expense. We have to pay $100 per month for cleaning, which we had thought we would be doing ourselves. –Reuben YonatanGetVoIP


8. Optimal Noise Levels


Christophor JurinTransitioning to a private office may leave your team working in an environment where the silence is deafening. There are optimal noise decibel levels that contribute to a more creative and productive environment. Moving to a private office may require supplemental sources of noise to help spur creativity and productivity. Sources such as music, water features, or other background noise may help. – Christophor JurinConstruct-Ed, Inc.


9. The Costs


Alex LortonMoving to a private office is a major step, but it is important to consider all financial implications. While operating in a coworking space, many overhead costs are included. These costs, which go beyond your office lease, need to be taken into factor. Remember that furniture, maintenance, equipment, utilities, the Internet, and your fridge (including everything in it) will now hit your bottom line. –Alex LortonCater2.me


The post 9 Factors to Consider Before Moving From a Coworking Space to a Private Office appeared first on AllBusiness.com

The post 9 Factors to Consider Before Moving From a Coworking Space to a Private Office appeared first on AllBusiness.com.