Who wants to work at a Fortune 500 company?

Apparently fewer than one in seven recent college graduates want to work at a big company, according to the Accenture Strategy 2016 US College Graduate Employment Study. This is a stark change from the many years when a large company corporate career track was the preferred way to work and prosper in America. The study found:

• Only 14% of the class of 2015 would “prefer” to work for a large corporation.
• 44% of new grads want to work either for medium-sized business or a small, entrepreneurial or start-up business.
• University grads are passionate, committed and willing to work hard – 69% cited picked their major in college because they were passionate about that area of study.
• But just 42% picked a major because it offered abundant job opportunities and only 23% indicated their choice was based on how much money they could make.
• Half of recent graduates surveyed feel they are underemployed.

Who is winning the battle for the top Millennial talent? 

LinkedIn just published a story “Behind the Top Attractors: How we discovered the world’s best hirers and keepers of talent.”

The story noted that Fortune 500 CEOs see lots of change on the horizon, and the ability to attract and retain top talent will be key to their future success. But the story missed a blinding glimpse of the obvious.

The experience for many Fortune 500 employees, especially the entry level millennial generation crowd, is not so great compared to what it used to be.
Are the Fortune 500 firms themselves are to blame for the talent flight to start-ups and smaller privately held firms?

Here’s what many of the big companies used to offer, but seem to have walked away from in name of cost-cutting and corporate efficiency. But it’s interesting to note that a number of the LinkedIn “top talent attractors” are bucking these trends and delivering what clearly matters to their employees:

Employee Training / Clear Career Development Paths:

The Accenture study analysis suggested that the next generation of workers are in fear being lost in the dense forest of a large corporation. They are concerned their individual needs and talents will be neither noticed nor nurtured.

Big corporations continue to cut back on formal training programs. The thought is “why bother training them… they are only going to leave” is often the excuse. Larger companies now emphasize on-the-job experience, coaching, collaboration and self-directed learning. In short it’s sink-or-swim for many employees, with no lifeguard on duty.

Current Best Practice: Microsoft offers a unique approach to career development: “an individual adventure” as they define it.

Its 118,000 employees are encouraged to plot their own path, working towards becoming a specialists or generalists. Career resources include 2,000 training programs.

Long-Term Wealth Building Opportunities:
Many emerging growth companies / start-ups are offering their employees stock options as way to be competitive with larger firms and help attract and retain the best and brightest people. In contrast most big corporations reserve stock options for only their senior people.

Nearly all big firms have eliminated their defined benefit (pension) plans and most have cut way back on their 401(k) matching contributions and employee stock purchase plans. Many Millennials think it doesn’t pay to hang around big companies waiting to get rich.

Current Best Practice: Last fall Apple launched an RSU Grant (Restricted Stock Units) Program making everyone who works at Apple eligible for the new program. Grants were given to employees worth $1000-$2000 in Apple stock. This is addition to the existing Apple Employee Purchase Stock Plan (ESPP) which makes Apple stock available to employees at a discount.

Willingness / Ability to Embrace Technology-Driven Innovation: 

Many Fortune 500 firms are on the back-end of the tech innovation curve. Who’s still buying all the blackberry phones and PCs these days? How many big firms have really cool smart-phone apps?

How many have created and tested highly disruptive business models? Have offered their rank-and-file management an opportunity to learn computer coding? Encouraged senior people to pair-up with junior digital natives as tech mentors?

Current Best Practice: Goldman Sachs gets kudos for being an old-line investment banking firm that is repositioning itself as a tech company, with about a quarter of its 36,500 employees being engineers and tech staffers. The company is actively investing in early-stage fintech companies and partnerships are more common than acquisitions. They've even sponsored hackathons.

Placing Value on Seasoned Employees: 

Seems that being over 50 and making more than $150K+ a year puts many large corporate employees on the “endangered species” list. Institutional knowledge is being shown the door every day in corporate America in the interest of cost-cutting.

“Cheap and Cheerful” employees seem to be the new order of the day. The younger employees often don’t even know what they don’t know, worse yet senior management often doesn’t seem to care. Customer satisfaction and loyalty can suffer in the end.

Current Best Practice:  Barclays Bank has launched an innovative apprenticeship program for professionals over 50 years of age. The banks views this as a way to up-skill the younger generation of their employees. The bank predicts “that bringing in apprentices over 50 years of age will make the institution more accessible, providing greater empathy with requirements of certain customers.” 

Attractive Corporate Cultures: 

The Accenture study shows that corporate culture matters to this new generation. 74% of recent college grads would choose to work at an organization with an engaging, positive social atmosphere, even if it meant accepting a lower salary. And a striking 92% of 2016 grads say it’s important to be employed at an organization that demonstrates social responsibility.

Current Best Practice:  Last year Google achieved the #1 ranking for corporate social responsibility from the Reputation Institute. What put Google on top?

The company has been carbon neutral since 2007 and has implemented numerous environmentally friendly initiatives, including Google Green.

The LinkedIn study was interesting because it was based entirely on actions of users – drawn from LinkedIn primary behavioral data. It leveraged actions such as job applications, engagement (non-employees viewing / connecting with current employees) and new hire staying power.

The companies at the top of the list are disruptors, tech savvy, innovative in creating new types of workplaces, provide professional growth opportunities, job flexibility and even stock option plans to large numbers of employees.

An even more interesting data point is the market cap and growth trajectory of the 40 companies on the LinkedIn “Top Attractors” list. If the charge of a public company is to maximize shareholder value, most of these companies are doing it in spades.

By delivering long-term profitable growth, the capital markets are rewarding them with higher equity valuations. And this all may be underpinned to a large degree by happy, hard-working, loyal and satisfied employees. Go figure.



 

Disruption Decends on the Financial Services Sector.

A perfect storm is sitting on top of the financial service industry today, one that is likely to massively disrupt this business sector over the next ten years. The converging storm fronts include the following:

FinTech Competitors:

Many aspects of financial services are under attack by a host of aggressive Fintech competitors including consumer banking, wealth management, payments, lending, currency and insurance.

Players include Stripe who wants to redefine the way payments are made (without banks), Common Bond is radically changing student loans, Betterment is robo-advising people about their retirement savings at a much lower cost than traditional financial advisors, and Bitcoin and other virtual currencies are creating the digital cash marketplace.

From the Silicon Valley to NYC these fintech firms are primarily using technology to create new business models that exploit inherent weaknesses present in banks and other financial services firms: High costs, poor customer service, thin value propositions and glaring lack of product / service innovations.  

The NY Times devoted an entire special section to the subject this past spring called “FinTech’s Power Grab.” The lead-in summarized the situation:

“If you spend more than 15 minutes with any senior executive of a large bank these days it is almost impossible to not to hear the phrase ‘fin tech’ uttered. It is usually spoken with a sense of optimism, but sometimes with a sense of dread.”

It is estimated that $19 billion has been invested in the fintech sector in the past year according to Citigroup, up from just $1.8 billion just five years earlier. Big banks have good reason to fear these well financed fintech competitors.

Environmental Issues:

The banks themselves have been distracted by huge increases in regulatory requirements coming out of the financial crisis of 2008. For example, JP Morgan has hired an additional 13,000 people in the area of compliance since 2012.

Banks have also been forced to make massive investments in IT to fend off new cyber-security threats. The American Banker identified a number of them last year including: mobile banking being ripe for attacks, SMS and malware strikes on Android devices, payment breaches surging ahead of the shift to EMV chips in debit / credit cards and the Internet of Things (IoT) creating new vulnerabilities.

Financial services firms also face extraordinarily stiff competition from start-ups when it comes to attracting and retaining bright and motivated employees, especially in the IT and senior management professional tracks.

Cuts backs in training programs and the glaring lack of long-term wealth building opportunities for most financial services sector employees have made working in the area far less attractive than it once was. Many of the best and brightest business school grads are opting for careers with start-ups and in the tech sector rather than banking.

The Trust Factor:

There is also a glaring lack of trust on the part of many consumers and businesses in the banking sector. Banks have undertaken huge cost-cutting initiatives that have adversely impacted the quality of customer service, continued to increase fees and focused a large amount of energy on their own trading activities in an attempt bolster sagging profits.

In the end - bank customers have gotten the short end of the stick and are more than ever customers are considering non-banking options for their financial service needs.

According to the most recent Chicago Booth / Kellogg School Financial Trust Index survey fewer than half of the people surveyed trust banks in general and even fewer trust national bank brands.

Branding Challenges:

In 2015 the Harvard Business Review wrote an article entitled “Why our trust in banks hasn’t been restored.” They reported “Since the financial crisis of 2008, a major question has been how banks can restore the trust of their clients.

For example, JP Morgan has hired an additional 13,000 people in the area of compliance since 2012.” I suspect this was a reactive and defensive measure on the part of Chase.

The banks seem to be missing a blinding glimpse of the obvious: Financial service brands are built on trust, and that is earned based on positive customer experiences.

At the top of the list for improving the customer experience by banks is timely problem resolution. This seems to be a lost practice these days. Think about how many times you’ve been put on hold when calling your bank’s toll-free service number, only to be connected to an overseas-based customer service rep, with a limited knowledge of the English language.

The HBR goes on to suggest that banks would be better served rebuilding trust, and thereby their brands, by focusing on three elements identified by research:

Ability: Are you competent?

Integrity: Are you honest?

Benevolence: Do you care about my interest?

Most people might be hard-pressed to apply any of these attributes to a major bank – therein lies the opening for many alternative / disruptive financial services businesses.

Changing Consumer Expectation and Behaviors

Millennial consumers are especially unhappy with banks. A recent study published by  Scratch – part of Viacom Media found that banks are at the highest risk of disruption. Why?

·      53% don’t think their bank offers anything different than other banks. 

·      71% would rather go to the dentist than listen to what their bank has to say.

·      1 in 3 are open to switching banks in the next 90 days.

·      All 4 of the leading banks (JP Morgan Chase, Bank of America, Wells Fargo and Citigroup) are among Millennials’ ten least loved brands. 

·      73% said that they’d be more excited about new financial services options from Google, Amazon, Apple, PayPal or Square than from their own nationwide bank.

These data points should strike fear into the hearts of senior management and marketing executives at the larger banks, but alas, they’re probably in a compliance meeting and won’t notice.

Surviving in a Disrupted World?

The Deloitte Center for Financial Services recently issued a compelling report called “Banking Reimagined – How disruptive forces will transform the industry in the decade ahead.” 

Deloitte’s basic premise is not If the banking sector will be disrupted, but how, when and to what degree it will change.

The question is not whether the disruptions that we are witnessing today will transform banking and capital markets, but rather how will they do so?

Which entrants will have the most success? What technological disruptions will take root and transform the way business is done?

What does the future hold?

The likely outcome of all this disruption will be a vastly different competitive landscape for the financial services sector. New entrants will leverage technical expertise with a clear focus on improving the customer experience. 

There will be greater industry fragmentation as consumers turn to alternative financial service offerings, many web and mobile based. 

The big banks will face pressure to adapt new business models or face massive customer defections and market share losses. They will need to make big investments in talent and technology if they hope to remain relevant, viable, competitive and profitable.

Who on Earth Wants to Work at IBM?

Who on Earth wants to work at IBM these days? Or for that matter, any other Fortune 500 corporation? That seems to be the sentiment among a huge number of millennial business school graduates these days.

“For the first time ever last spring – top investment banks (Goldman Sachs) and consulting firms (McKinsey, Boston Consulting Group) were not filling their on-campus recruiting interview schedules with enough interested candidates,” according to Ellis Chase at the Career Management Center of the Columbia Business School.

And there is good reason for millennials to turn their backs on Fortune 500 firms. As Reid Hoffman points out in his book The Start-up of You the traditional corporate career escalator simply does not work anymore.

As Hoffman states, “that escalator is jammed at every level. Many young people, even the most highly educated, are stuck at the bottom, underemployed or jobless.” Unpaid internships now seem to be a part of the “career path” of many college grads.

Is there anything large Fortune 500 firms and other old-line prestigious firms can do about attracting and retaining the best and brightest millennials entering the job market?

They might start by focusing on what’s important to millennials these days when it comes to considering a potential employer. According to a recent survey of American college students by HR consulting firm Universum, students focus on employers that will offer:

1. Respect for their employees.
2. Secure employment.
3. A creative and dynamic work environment.
4. Professional training and development.
5. A friendly work environment.

It’s little wonder that startups present themselves as such an attractive alternative career path to large corporations. Millennials came of age during the Great Recession, a time when headlines were rife with mentions of massive headcount reductions, cutbacks in training programs, and reports of generally staid and often boring work environments.

Hoffman later advocates in his book that people should adopt the same principles that have propelled the massive success of Silicon Valley startups: take intelligent and bold risks to accomplish something great; pivot to a breakout opportunity.

Savvy Fortune 500 firms are adopting this philosophy with the rise of employer branding initiatives.

The Harvard Business Review reported the trend earlier this year. The HBR states: “As the global economy picks up, there is a growing concern among CEOs about finding and keeping the best talent to achieve their growth ambitions.” Many firms reported talent shortages and are concerned about the availability of new skills.

So what are Fortune 500 firms actually doing about this recruitment problem?

IBM is a company in transition, moving from mainframe computers to a new set of strategic imperatives including data management, security, cloud computing, mobile technology, and cognitive computing with IBM Watson. But it is a safe bet that most college graduates are unaware of this shift, or even what it is like to work at IBM.

IBM Instagram Post

IBM has wisely adopted the lingua franca of millennials: social media. They’ve developed surprisingly attractive content that is driving their reach, engagement, and message amplification. All of these elements are key to successful employer branding in 2016.

“While we certainly enjoy widespread brand recognition, we need to help overcome their murky perception of what IBM does…we need to communicate our strategic imperatives: Data management, security, cloud computing, mobile technology, IBM Watson,” noted Jennifer O’Brien, Global Candidate Attraction & Social Media Recruitment leader at IBM.

Other companies, GE for example, have taken to using expensive, high production value TV ads  for their employer branding. This new campaign from Madison Avenue ad agency BBDO uses humor to explain how GE is evolving as a company, and that it is a great place to work. This message seems contrived, less than authentic, and potentially easy to ignore, or for the viewer to feel “talked at” with hype rather than being engaged with a relevant message.

Even companies that rank near the top of the “Ideal Employer Rankings” are finding it necessary to address the concerns of potential employees. Take for example consulting giant McKinsey. While consulting has always been considered a great career path for top business school graduates, it comes with a well known cost: 70+ hour work-weeks and the constant need to be on the road.

McKinsey has countered this problem with its "Take Time" program that allows consultants to take off between 5-10 weeks per year between engagements to pursue personal interests and passions. And they are aggressively promoting this program on social media and with digital marketing.

  

Looks like savvy Fortune 500 firms are embracing the new world order of employer marketing that attracts and engages their millennial audiences, and using smart phones, social media, and employee generated content to make their message authentic. Pity the firms that miss the boat on this trend, as they will need to endure fast thinning ranks of qualified recruits to build their futures.

Can better customer service disrupt financial services?

It is no secret that customer service at most financial services companies is just awful. Banks, brokerage and insurance companies have been cutting back on customer service for years in an attempt to reduce costs and improve profitability.

At a recent Harvard Business School alumni event in NYC entitled “Innovation in Financial Technology: The Startups” three founders shared their successful (and disruptive) business models focusing on delivering better customer service in financial services. The common thread for all three featured firms was their involvement in marketplace lending.

Marketplace Lending 

Marketplace lending is “about the reinvention of consumer finance” according to the American Bankers Association. Until recently it was better known as “peer-to-peer lending” lead by the likes of Lending Club and Prosper.

David Klein

David Klein is the CEO and co-founder of CommonBond and he described marketplace lending succinctly in a blog post this past summer:

“The rise of marketplace lending in recent years is part of a massive wave of disruption that has taken hold in the financial services industry – and it will only grow larger, as marketplace lending is projected to be a trillion-dollar industry within the next 10 years.”

Klein describes marketplace lenders as:

1.    A non-banking financial institution.

2.    Heavily leveraging technology to drive simplicity and speed of process.

3.    Serving a two-sided market of consumers and investors.

More Affordable Student Loans

CommonBond describes itself as “A values-driven fintech company that is re-imagining the student loan experience.” Klein described the origins of his business based on a very personal experience: the pain of student loans.

While he was attending Wharton he had only one option: The Federal Government, offering one rate, no matter where the people when to school or what their credit record was like. “It was a hard process with really bad service, and I knew there were lots of other people in the same position. But what could they do?”

Klein looked at the simple math of student lending: Investors were getting 2% returns, while students were paying 8% interest. “I saw the opportunity there to refinance student loans, saving student borrowers 2-3% in interest in the process.” A more affordable student loan option was born.

“Some call us a shadow bank, but we consider ourselves a sunshine bank, doing something good for consumers.” Klein is adamant about CommonBond’s benefits: “We offer a better product choice, a cheaper price, and use technology to speed up the process and offer improved customer service.”

He observed “We as marketplace lenders are closing the cost of capital and closing the customer service gap versus big banks. This will allow start-ups in the fintech sector to win.”

Faster Small Business Loans

David Haber

David Haber is the co-founder and CEO of Bond Street. The firm is transforming small business lending through technology, data and design. The company believes small business owners are the foundation for growth in the economy, and yet today’s banking system has left them behind.

As Haber explained he took an unconventional path to fintech, having studied biochemistry at Harvard. He then worked at a small venture capital firm.

He saw small businesses struggling to raise money, along with the fact that big structural issues faced banks serving the small business lending market. He told the gathering: “In most cases you can’t apply for a small business loan from a bank online. Then 80% of the applicants got rejected. It’s a really bad customer experience.”

Haber further noted that the consolidation in the banking industry has concentrated assets, and as a result the percentage of banking assets available for small business lending has dramatically declined.

“A $5 million loan takes the same time to process as a $150,000 loan.” So there isn’t much incentive for banks to lend at the smaller end of the spectrum. “And banks don’t want to cannibalize their lucrative credit card portfolios with more attractive lending options from the customers perspective.”

Bond Street offers small business loans from $50k-$500k with rates starting at 6% and offers and a vastly improved customer experience in terms of speed and convenience. Applications are made online and approvals are given in less than 7 day versus the typical 6-8 weeks a bank takes to evaluate small business loan applications.

Better Marketplace Lending Information

Matt Burton

Matt Burton works the B2B side of fintech. He’s the Co-Founder & CEO of Orchard, which provides analytics to the marketplace lending industry.

The company serves three distinct targets: Investment managers who need data to analyze potential lending investments for risk and yield criteria. Loan originators who need access to a wide spectrum of high quality investment managers and institutional investors, and institutional investors interested in entering the marketplace lending sector.

In essence Orchard provides analytics to the marketplace lending industry. They also created a unique marketplace platform between institutional investors and borrowers, show in a great “online lending ecosystem” chart on their website.

Matt admitted that he fell into his start-upbackwards. “I was working as consultant to the hedge fund industry, looking at small money managers, hoping one would have good system for tracking portfolios of small loans. They didn’t.”

Burton saw the opportunity to fill the analytic gap with great customer service.

“All these guys tried to do it on their own” Burton said. “I decided to start a business that would provide analytics to the marketplace lending industry.”

Forbes reported earlier this year that the volume of loans made by online matchmakers last year totaled $14 billion and will grow by a compound annual rate of 47% through 2020.

Orchard typically charges clients about three basis points against the amount invested or managed through the company. This year Orchard expects to have about $3 million in revenue. In July the company’s 59 clients make $227 million in loans using Orchard. They’ve raised $12 million in financing, which valued the company at $50 million.

Backers include a prestigious group of former big-time Wall Street executives including Virkam Pandit (former CEO of Citigroup), Jack Mack (formerly of Morgan Stanley) and Capital One  founder Nigel Morris. 

in the Forbes article Jay Posner, managing director of client Blue Cub Capital Management, said Orchard "levels the playing field. The ability to buy loans milliseconds after they're available allows me to compete with larger funds that have more resources."

Burton observed at the HBS event "Lots of people are fleeing banks, especially the under 40 crowd. This will only build the marketplace lending sector." He continued "Traditional banks are facing death from 10,000 cuts from startups."

Measures of Success 

These three startups are delivering compelling evidence that focusing on superior customer service, expressed as a lower cost, faster service or better information can indeed disrupt the financial services sector. 

The clearest vote of confidence in these companies has been their success at fund raising and business growth.

In September of this year, CommonBond raised $35 million in a Series B funding round led by August Capital, and surpassed $100 million in refinanced student loans.

Bond Street announced $100 million in funding last June from venture capital firm Spark Capital and global investment bank Jefferies. "Our biggest challenge for the past year was not having enough lending capital" said David Haver.

In September Orchard Platform raised $ 30 million. The NYC based venture capital firm Thrive Capital lead the round of new investors, which also included former Goldman Sachs president Jon Winkelried, Victory Park Capital and Thomvest Ventures. This latest round brings Orchard’s total fund raise to $ 44.7 million.

What my dog taught me about social media.

I got an important lesson about social media recently from my dog, or rather from his passing. I posted the following piece on Facebook without giving it much thought:

Decoy our Black Labrador Retriever died peacefully on Monday night 10-12-15 at the Animal Medical Center in NYC. 

Decoy

He came to NYC over eleven years ago as a rescue dog from Charlottesville, VA. Since then he enjoyed a full life with long walks, ocean swims, interesting smells in NYC, frolics in the snow, back rolls on the beach and dog treats at every port of call. 

Decoy made many friends throughout his life, including the staff at our apartment building, the owner of our dry cleaners and the guys at the local FDNY firehouse, in fact anyone with a biscuit in hand. 

He was a member of our church, where he often worked as an usher and appeared in the annual Christmas Pageant - as a black sheep. 

Despite his best efforts both in Central Park and on Eastern Long Island, Decoy never successfully caught any rabbits, squirrels, ducks, geese or deer, and he made hundreds of attempts at the chase. 

He was a family member and friend who will be missed, and never forgotten. RIP Decoy.

The response I got back was overwhelming. So what did I learn about social media? 

Write from the heart if you want to connect with people. I have to  put aside all the logic, process and strategy I learned in business school and practice professionally once in a while, and let my heart speak in my writing. Apparently it resonates with lots of people. 

Live in the moment. Decoy never worried about what happened yesterday. He lived for our early morning runs in Central Park and visits to the beach on Long Island. As far as I could tell he never worried about the future. I shared this in my Facebook post. Capturing the simple moments that make up our lives and sharing them is what social media is all about.

Trust the Data: I work with lots of clients on social media marketing programs, and tell them to closely observe what creates engagement with their audience; then use that data as a guide to creating content that matters to people. After my article on Decoy appeared, my Klout score (measuring my online social influence) went through the roof.

Of all the messages I got back from the Decoy Facebook post, my favorite was the following: 

Dogs come into our lives to teach us about love, they depart to teach us about loss. 

A new dog will never replace an old dog. It merely expands the heart. 

If you have loved many dogs, your heart is very big. 

Decoy expanded my heart in countless ways, and in turn opened my perspectives on how to share that gift, using social media.

 

The Need for Substance Behind Disruption.

Much has being written about the merits of disruptive business models. They are redefining numerous business sectors and creating new companies with massive valuations in the process. But many startups, using disruptive business models, fail for the lack of a sound strategy and basic business acumen.

Many young entrepreneurs, founders and investors dive into business sectors they don’t know much about. And for all the creativity, drive and vision of gifted programmers and founders - writing code is a completely different skill-set than many years of industry expertise, or the basic lessons learned in graduate business schools.

Here are four cornerstones of “substance” that emerging growth companies should consider:

Sound Business Acumen:

Groupon offers deals and coupons for restaurants, retailers and service providers. It made a big splash back in 2011 when its IPO it went public raising $805 million. Investment banks including Goldman Sachs made millions in fees.

Only a few months later, regulators flagged some questionable accounting practices. The company admitted to “material weakness” in its internal controls, restated its 4 Q 2011 financials and the stock tanked by 44%, and $350 million in equity valuation vaporized. Groupon’s accounting practice gaffe reflected the extreme downside risk of not having sound business acumen, especially in accounting matters.

Industry Expertise:

Some startups simply don’t understand the business sectors they’re entering.

The American Bankers Association recently posted a video on the need for financial technology startups to hire both seasoned executives that understand the industry (including regulations) and younger developers who bring creativity, innovative and disruptive ideas.

A great example of this combined skillset in practice is Polly Portfolio.

Barron’s recently featured a cover story on the rise of “Robo Advisors.” Firms like Wealthfront and Betterment offer web portal access for investors seeking a simpler and less expensive way to manage their investments. This approach is perfect for Millennials who don’t see the value in an expensive investment advisor sitting a fancy office.

But do the developers and founders behind these online asset allocation algorithms have the investment management experience, regulatory insight and proven track record to match Wall Street? The jury is still out.

Polly Portfolio has the pedigree of some leading Wall Street hedge fund managers and their quant investment models. The company offers a sophisticated portfolio asset allocation customization feature with great graphics, and the benefit of active portfolio management and rebalancing.

If you don’t quite understand all this, it simply translates to turbo-charged industry expertise in investment management, delivered conveniently to your laptop, at a fraction of the cost compared to traditional investment advisors.

Clear and Tangible End Benefits:

A basic tenant of good marketing is that people are much more motivated to buy benefits from a product or service rather than features. K Mart sells lots of Craftsman drills with nifty features, but in the end people buy a hole in the wall.

Uber stands at the pinnacle of the startup unicorns, companies valued at a billion dollars or more. They closed $1.6 billion in financing earlier this year. Their concept of affordable and safe, on-demand transportation delivered by a smartphone app has translated into 58 countries and 300 cities worldwide. They use a clear and simple “value proposition.” Uber makes makes local travel in all these cities easier, more accessible, and often more affordable than options, in most cases local taxis. 

They are presently estimated to be worth $50B on annual revenues of $10B. Not a bad growth track for a company that started with $200,000 in seed funding back in 2009.

Sustainability:

Smart entrepreneurs design business models that are sustainable. Sometimes this requires them to “pivot” or evolve their business models over time to find something that works. 

Zygna is the company behind online games such as FarmVille, a farming simulation social network game they launched back in 2009. Despite the initial success of the game, it garnered some negative reactions. TIME magazine called the game "one of the 50 worst inventions" in recent decades, due to to its being "the most addictive of Facebook games" and a "series of mindless chores on a digital farm.

Zygna launched its IPO in late 2011 and raised $1.2B with a $20B valuation. 

In the end Zygna became a "one hit wonder" of sorts with FarmVille, and the stock quickly went from $15 per share to $2 per share and it has bounced around that value for the past three years. While the company still have a market cap of $2.4B, many investors took big losses on a company that did not have a sustainable offering. 

The company is now facing a lawsuit that contends that they defrauded shareholders about its financial prospects before the December 2011 IPO. Shareholders also claim that Zygna hid its true earnings potential to enable insiders to sell $592 million in stock before a post-IPO lockup was to expire, thus avoiding the 75% drop in share price. 

It's clear from these huge success stories, promising up-and-coming startups, and roadkill just examined that a combination of sound business acumen, clear end benefits, relevant industry expertise and a sustainable business model will go a long way towards driving long-term startup success.