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We've just taken a 30 minute break. We're now heading to a leadership exercise, guided by Dinoe Signore form the Lowe Foundation. Then we are heading for an hour long reflective walk.

Scotomas are blind spots. We see what we look for. Everything else we screen out.

We then went on a reflective walk and reconvened to discuss some of the issues on which we were asked to consider during our walk.

Now we are on to Search Engine Optimization (SEO) and marketing...

• How Google searches the web
• For example:
  
• Organic marketing: Counting the number of inbound links and whether the page meets your search needs
  
• Reciprocal links: Pushing you down in the rankings
  
• Redirects: Pushes you down in the rankings
  
• Spam in the descriptors pushes you down
• Flash on the front page makes you invisible
• Frames makes you invisible to Google
• First three pages count
• First page about the fold is most important
• Inbound links must be relevant and gov/edu gets more weight
  
• 7 Ket Optimization elements Title, keyword, description, content, headline, site maps, ALT tags
• Optimizing tools are available on the web 
  
• Wesite Grader
  
• SEOMOZ
• Alexa
• Now we are focused on paid advertising on the web Google Adwords
• Google Local: You can fill out a form and get into the Google Local listing

Here are the key points of the GIS discussion.

• Primarily a tool for consumer markets (B to C issues)
• Primarily local market information
• Need geocoded data: Data that is specifically connected to a physical place.
  
• Requires specialized skills

Software platforms

ESRI ($3,00-$15,000): about 80% share of market

Other platforms include MapInfo, Site Targeter

(Note GIS tools are ncreasingly available on-line. For example: US Census Longitudinal Employer Household Dynamics.)

Datasets for direction marketing lists

The demograhic databases deteriorate at about 1% per year: Refresh every year

Pull a subset and run a test to check your return rates

Average 2% response rates

ESRI provides a web version. You can get a profile of your region for about $300. This service is useful in rural areas.

Now we are heading on to the tools:

• Database searching
• GIS
• Search Engine Optimization

Most of the participants are already working with databases.15-20% of the databases Littleton uses (about 12 databases) get switched out eah year. You can see a listing of the Littleton program databases here. Littleton has a $65,000 budget for databases a year.

Staffing in Littleton

In addition to Chris, Littleton has a full time database person. A second person doing GIS and Search Engine Optimization. A third staff seerves as utility.

Contact volume

About 400 contacts per year. About 125 to 150 "heavy duty" projects per year.

Service agreement

Littleton has a service agreement.

Vendor agreement

Littleton puts in a clause that Littleton is a public organization which will pass on the information at no cost.

Database Searching

We are going through a discussion of each of the databases.

Chris is now discussing search strategies of following threads to "a mother load". Information is clumpy. It's not evenly distributed.

Chris is going through analysis techniques: Organize information snippets into categories. Then you start seeing a trend or pattern. Keep boiling down the information with a clear and concise statement that answers the business' question. Remember: Answer the question.

Typical subjects:

• Market overview
• Market trands and size
• Strucutre of the market
• Distribution patterns

Focus on your customer base:

• Start-ups: (distinguish whether start up is or is not "growth oriented" start-ups) This can be a real time sink category
  
• Locals: Mostly have a sales/marketing question...but they are politically important...Get them as quickly as possible to a marketing list..through the strategy/targeting/marketing continuum. Figure 3 hours.
  

  (80% of the businesses in any economy have less than 10 employees and less than $200,000) This is the "long tail".
  

• exports: (pay-off)
• growth: (pay-off) (3%-5%) Most complex inquiries
  

Disclosures and confidentiality

Public offices may have difficulty with public records issues. This is one reason why a public office (e.g., a city) might contract with a private non-profit like a chamber. The underlying statute would have an impact. Some states have an exemption for proprietary business information.

We're now heading into an exercise on identifying the core strategy of a business. Defining the core strategy is the threshold inquiry in Littleton's EG program. Focus on strategy before marketing.

Strategy can be differentiated betwen two dimensions: volume (high/low) and margin (high/low)

The niche strategy has lower volumes than commodity businesses, but higher margin. Example of a niche strategy in a commodity industry: Antartic Connection

Another example: Apple Computers

The niche strategy has no permanent answer. The only defense is constant innovation. Niche is a temporary monopoly. Also, with niche strategies, the deeper they are (the more specialized), the broader the geographic market needed to meet profit targets.

Risk: Strategy drift. This happens when companies under stress become too concerned with solving the short-term challenges.

This is a really good explanation of why innovation matters.

We're now heading into an exercise to evaluate case examples of businesses. Everyone brought a business case to discuss. In groups of five, we discussed these case studies. (In our group, we only got into one: A particularly interesting challenge of a golf course and restaurant in a rural community in Illinois.)

Chris goes on to explain why commodity traps are so hurtful. These commodity traps arise when the primary source of wealth in a community depends on commodity businesses that must specialize based on low costs. The commodity trap is an arms race, a race to the bottom.

Traditional economic development is geared toward meeting the needs of commodity businesses: lowering costs.

Innovation is the way to get out of commodity traps.

Here's a brief article from Harvard Business Review on avoiding commodity traps.

We're continuing to discuss EG. Here are some of the challenges of EG in rural areas:

• Focus on culture. Chris will tie temperment, complexity to these issues. 
• As communities get smaller, the fewer entrepreneurial resources. How do we manage the expectations in a smaller community?
  
• Yet, the internet is changing the dynamics in rural communities

Chris focuses on some of the Core Beliefs:

1. Only entrepreneurs create wealth, jobs, not economic developers.
2. We all either own a company...Or, work for someone who owns a company...Or, work for somebody who taxes some who owns a company...Or works for someone who works for a non-profit that depends on someone who owns a company.
   
3. Entrepreneurs are evenly distributed and in all communities, but they tend to move to where they get supported
   
4. Entrepreneurs are about 10-12% of population
5. Growth companies = 3%-5% of companies (a bit different than Second Stage, a term that includes steady growth companies, as well as high growth companies)
6. The role of the public sector is to create a nurturing environment:
   
• Information
• Infrastructure
• Connections
7. It's not about a tool, it's about an idea...The tools are a way to implement an idea...the tools will change
8. Understanding the 80/20 rule and focusing on the critical drivers of growth: strategy, market dynamics, marketing focus, management teams, finance. (There is not a shortage of money there is a shortage of good ideas)
9. Investments are in the community that does not leave when a company leaves...Our investments stay in the community
10. Businesses are complex adaptive systems embedded in complex adaptive systems...Businesses grow by innovating..Focus on complexity science, network theory. 
11. Two critical principles to EG growth:
• Open Source
• Best practice verification
12. EG organization needs to be entrepreneurial. Focus on innovation, customer service, speed quality of the EG service offering
    

Chris's comments on questons asked:

• Libraries are helpful, but librarians need a focus on speed and answering the specific question asked
• Littleton puts money into the community not the company. Our focus creates the environemnt that entrepreneurs in which want to live. (Contrast Littleton and Sheridan ) 

We're starting off withan overview of EG.

We have two modules this morning:

1. Module 1: Foundation of the Program
2. Module 2: The Entrepreneurial Tipping Point

Chris Gibbons gives us an overview:

• EG is a set of tools,
• This is not a quick strategy, a quick fix
• We have distributed intelligence working on EG. Reference book: Wikinomics
• Our goal: Give us the scope and scale of EG (Chris is reviewing the agenda)
• Chris: The single best book on economics: The Origin of Wealth 
  • Contrast mechanical and biological thinking
• Companies want to come to Littleton now. 
• We distinguish between Stage 1 and Stage 2. Stage 1 companies: With these companies EG focuses on focused overwhelmingly on marketing and the niche v. commodity issues. 
• Simply asking entrrepreneurs whether they want to grow is the single most important predictor of whether a company will move from Stage 1 to Stage 2. Only about 3% will respond that they want to grow. Most people who go into business want lifestyle, not the headaches of growth. 
• Culture makes a difference. In the Midwest, the focus has been on managing the last wave's entrepreneurial wealth.

Chris shows us a video on what Littleton does.  It's a good overview of what the Littleton EG effort does.

The video mentions an SBA report on EG. You can download it here.

Chris then shows us another video on EG history.

Here's a note from Chris:

We’re looking forward to our first EG training session on the grounds of the Edward Lowe Foundation in Cassopolis, Michigan.  We have folks from all over the country (Bellingham WA, Vienna IL, LaJunta CO, Dickinson ND, Eugene OR, Atlanta GA, Boise ID, Chillicothe MO, Hartford City IN, Ponca City OK, Tacoma WA, Nashville TN, Greencastle IN, Joplin MO, Orlando FL, Purdue IN, Lansing MI, Macomb IL and Akita, Japan).
 
We’ve got a great mix of locations, urban/rural, core industries.  We have lots of case study and exercises built into this intense 3 day weekend and are scheduled from 7 in the morning till 9 at night. The group is small and should bond quickly.  I think we are all going to learn a lot from each other and push the entrepreneurial agenda even further into the future.
 

From Cindy Jones:

I joined this discussion group because our business is community
minded, and I liked the idea of rural communities embracing a new way
to grow business.  While it is correct that the internet provides a
new medium to reach new customers, I'd like to throw in a few thoughts
"from the trenches".  Although we do not have an internet business,
after 48+ years we feel we understand a few essentials.  First of all,
to be successful, you must do something nobody else can do, or
something nobody else wants to do.  If you have a "me, too" business
you must find out what differentiates you.  And, you must constantly
find out what your competition is doing and very quickly take action
to adjust to any new challenge.  Relying on research that includes
academic and government statistics gives only a very partial picture:
consider that few of these people have actually owned and operated a
business.  In other words, you can research something endlessly, and
not understand the real pressures of meeting payroll, keeping up with
ever-changing legislation, responding to real customers, and perhaps
most importantly, finding and keeping good employees.  We do pilot
programs, test marketing, and we actually talk to our competitors at
several levels on the idea that there's enough business for all of
us.  And we constantly seek advice from a kind of informal advisory
group of non-competing businesses.  Although we have "failed" in some
of our business decisions, we have quickly jumped to make corrections
to our course, thus learning as we go in ever-changing markets.

Bottom line:  consider the benefits of pilot programs, test marketing,
and other "stick your toe in the actual water" means.  Try partnering
or working with someone who is already successful at what you want to
do.  But recruit and court advisory sources from other entrepreneurial
points of view, an informal or even formal advisory panel of others
already in the trenches.  Often, these can be suppliers, vendors, or
others in non-competing businesses.  Yes, you can derive value from
public libraries, academicians, small business development centers,
CEO discussion groups, etc.  The addition of entrepreneurial advisors,
however, adds a dimension from those who only get paid when the
customer is satisfied, the employee shows up for work and does his/her
job well, problems get solved efficiently and effectively, and the
owner(s) constantly "inspect what they expect".

Another fairly novel idea:  be friendly with your competitors.  You
never know when you might trade resources, problem solving techniques,
etc.  Or you might be first in line to buy them out when they decide
to get out, because they have a trust relationship with you and know
you won't cheat them.  For distant competitors, this might be
attending conventions where your competitors are present, or
networking with them separately.  Do your homework first so you know
something about their marketing and their success rates.  Offer them
advice from your experience, solicit their advice.  There's nothing
like asking for advice, especially while praising honestly another's
success.

Yes you can be hi-tech, but look for ways to also be hi-touch.  What's
wrong with a hand-written "Thank you" written on a shipped order?  How
long does that take?  Anything to make it somehow personal!

If you have the passion, the internal and in-born absolute persistency
and consistency to overcome anything that arises, you will likely
succeed.  After all, you get what you think about the most: you are
always considering situations and their possible outcomes.

A candidate for the House of Representatives in Michigan proposes a shift in state strategy.

From Chris. Read more.

Note from Chris:

I’m really surprised that the WSJ would run such a simplistic story.  If you are in a commodity business and price is the only difference, then the lowest cost state will of course rank #1 for being “business friendly.”  But it’s not doing a lot for the standard of living in the lowest cost states which bring up the rear (ranking 22-41).
 
The least business friendly states have median household incomes ranking 1-21.  There’s got to be a little more to this discussion than recruiting commodity businesses.

A Wall Street Journal article on most favorable business locations 
 
Median HH Income by State

=====

Chris' post triggered this post from Al Jones:

The rankings for business climate always have some very strange
assumptions often designed to provoke a legislative response (lower
tax rates or worker's comp, union rules, etc.) and a political economy
philosophy (not a research-base, a series of remote guesses about
reality).   David Birch in his groundbreaking analysis of 13 million
real U.S. businesses, everything in the Dun & Bradstreet database over
15+ years, found that the accepted wisdom about business friendly
attraction was about 180 degrees wrong:  the highest cost, highest
density, highest regulated, etc. "worst places to do business" in fact
had far more start-ups, growth, relocation/branches opened, greater
scale etc. while the cheap places with little competition for
facilities, skilled workers, vendors, or much regulation/taxes were
far behind.   Why?   Pondering it for years (I'm kinda slow) suggests
that government and public policy don't matter anywhere near what they
imagine they do and it's the density of viable customers easily
reached, the caliber of vendors/suppliers/professional services
available because they have lots of clients to sustain and improve
themselves, the access to large customers who often take the same
selling investment as very small accounts, and a wide range of
business facilities to choose among so you don't have to stop and
build what you need.   In other words lots of customers, a large labor
pool to find experienced people in,  lots of opportunities to
outsource to very competent specialists/intermediaries.
Those efficiencies overcome communities with heavy taxes, bizarre
regulations, etc. .

David Birch,  "Job Creation in America" 1989?

That's why economic gardening is a more effective tool as it's focused
on finding customers, finding suppliers, and linking with hard-to-find
specialists in the region or beyond.   Look at the most remote places
where there's free or nearly free land and buildings, desperate cheap
workers stranded by fate, governments that will bend over backwards,
virtually no real regulatory enforcement because of the remoteness
from the regulators, low taxes, almost no bureaucrats period, and
often significant incentives...those places continue to struggle for
new activity and business growth.

James Cobb "Selling the South"

The weirdest and most useful state by state ranking I've found yet are
deep in Robert Puttnam's "Bowling Alone" where he takes multiple
measures of social capital with strong correlation to something that
really matters for quality of life and then ranks them by state.    So
instead of a percentage point difference in a tax rate settling the
comparison, Puttnam's are far less trivial:  how long will you live?
how will your children thrive? how often will illness strike and you
recover quickly?  how many friends and acquaintances will you have-a
social network or isolation?  is your community safe?  etc..
Minnesota and the Dakotas are typically at the top, my state Montana
is in the top 10, while Nevada, Lousiana, Mississippi are in the
bottom.   The effects of a restless population constantly moving in
and out fragments or never builds the social networks and may conceal
problems politcians can mostly then ignore ("If you don't like things
around here, why don't you leave?")   States where most of the
population was left of out of most decision-making for a long time
consistently score low, same where investment in the population
(education, infrastructure, social services, higher ed, etc.) were a
lower priority don't do well which makes sense too but in reality
those expenditures are rated AGAINST a state on most of the "most
business friendly places" measures (remember, lowest taxes, most
incentives/subsidies, most desperate workforce.)

Thanks as always Chris for pointing out the disconnects.  :)

And another comment by David Myers in Ponca City:

There are a lot of assumptions in both the WSJ and the responses to it.  I'm
in Oklahoma which typically is considered to be one of those
resource/commodity states by people that read twenty year old newspapers.

Most of my colleagues here have little to no interest in the low cost
companies that still roam the earth looking for cheap this and that. We also
have no idea what these people are talking about when they assume our state,
(as just one example) has lots of labor, few skills, little competition and
even less education.  These lists and articles are like reading science
fiction when we contrast this to what we see on the ground in Middle America
every day.  We live our lives far more in the descriptions of local
economies and the new age of economic churn, start-ups, commercialized
research and innovation generally reserved for our friends in areas
perceived to be more enlightened.  Coming from Los Angeles and experiencing
both ends of this dynamic, I don't pretend to understand the geographic
bigotry.

The world has moved on for most of us.  Hopefully, the WSJ and a media that
simply adores publishing lists of any kind from any source can move beyond
the old paradigms as well.

David

David Myers, CEcD
Executive Director
PONCA CITY DEVELOPMENT AUTHORITY
102 S. Fifth, Suite 3
Ponca City, OK 74601
580.765.7070 phone
580.765.0969 fax
580.761.9206 mobile
dmyers@goponca.com
www.goponca.com
AMERICA'S FAMILY BUSINESS HEARTLAND!