Jake Steinfeld, of Body by Jake fame, has a new book out – I’ve Seen a Lot of Famous People Naked, and They’ve Got Nothing On You. It is a book about success, motivation, and entrepreneurship.

There are a couple of cool things he is doing to promote the book. First, Jake has an audioblog. He is using Audioblog.com and leaves one to three minute audio pieces. I think it is a great use of the technology and allows Jake’s fans to get a dose of him every day.

The second thing is a little bigger. Today, Jake was on Fox & Friends (that is what started this whole post) and he announced the Live Your Dream Contest to go with the book. He is going to giveaway $200,000 to the best business idea he sees submitted for the contest. The winner also get $50,000 worth of flight time from Marquis Jet.

Yesterday, we had a visitora blog visitor. We had the pleasure of hosting John Nesheim, the author of the new book, The Power of Unfair Advantage: How To Create It, Build It, And Use It To Maximum Effect.

Heres another link about his new book. Feel free to check it out.

“Dont leave home without it” quipped Johannes Hoesch founder of the 8020 Group. He was serious. And so are others I interviewed. Either you have it or dont show up. You cannot play tennis without a racket. You cannot win the Tour de France without a bicycle (and team, strategy, plan, deep financial backing, training, biotechnology, soul, organization culture and a lot more that adds up to an unfair advantage). Lance Armstrong gets it. He understands unfair advantage.

People who start with a dream need to respect unfair advantage. Without it the dream pops very quickly and painfully. New enterprises are deeply personal. They are packed with emotions, spiritual passions and even impact the health of the participants. The cost of na failure is very high.

With unfair advantage, the unborn baby has a chance to not only survive, but to thrive. The parents can confidently proceed to consummate and give birth, expecting to finish with a healthy infant, able to be managed into adulthood. The child can win the Grand Prix of the modern new enterprise race. The race is to dominate a new market category just like Google, Yahoo, Cisco and many before them. That produces the gorillas that become world-class brands. They go IPO in less than a decade. They create hundreds of millions of dollars of company value and rapid job growth. They are the envy of countries around the planet. Everybody wins.

And it all started with an unfair advantage. So go score your own unfair advantage. Use the score sheet in the Appendix The Power of Unfair Advantage: How to Create it, Build it and Use it to Maximum Effect.

Do you know of good ideas that started without an unfair advantage and ended up more like struggles to survive than winners who thrived? Tell me about some of them and what happened. We can all learn from the examples.

“So much changes that your plan is obsolete by the time it is printed.” That was a common refrain I heard from CEOs and their core teams while doing the research for The Power of Unfair Advantage: How to Create it, Build it and Use it to Maximum Effect. Yet the serial entrepreneurs I met were clearly following a plan to quickly move from an idea to a world-class IPO within five years. So what was going on?

I finally got it! What the veterans meant was that their initial unfair advantage had to be able to change over time. It had to react to counter-moves by competitors. It had to drop some elements and add others as the new enterprise grew from child to adult. Those changes made unfair advantage a living thing. It is organic.

As soon as you launch your new product, the competition reacts. Then you have to react to their reaction. When CEOs and their core teams that can do that, year after year, they can build a wildly successful new enterprise. They have a competitive advantage based on their ability to react dynamically with swift, powerful strategic responses. They are able to anticipate as well as deal with good and bad surprises, much better than their arch rivals. You can read examples of this in Chapter 9 of The Power of Unfair Advantage: How to Create it, Build it and Use it to Maximum Effect.

So what in your core management team is evidence that they are people with the ability to dynamically respond to tough reactions by tough competitors, and then emerge from the battle as the winner, the gorilla that dominates the new hill? Icons of Silicon Valley like Don Valentine founder of Sequioa Capital look for such managers in the companies his firm invests in because they produce the Ciscos of the world.

Try writing how you plan to react to your competitions reaction after your next product launch. Do it in less than a page and tell me what you discovered as you wrote it. For instance, did it reveal a weakness in your competitive position? How will that affect your story to investors and potential employees?

“Focus, focus, focus” is what I kept hearing from the people I was interviewing. “Without it, a new enterprise will fail” according to entrepreneur and investor alike.

“So what should they focus on?” was my reply. The answer was quick and simple: “Focus on creating such a compelling value proposition that the ideal customer will leap out of his chair and race to buy what you are offering.”

So now I know. And so can you.

Give this exercise a try:

1. Who is your Ideal Customer?
2. What is so compelling that that Ideal Customer will rush out and buy what you are selling?
3. Why is that so much more compelling than what your main competitor is offering your Ideal Customer?

Tip: Make the definition of Ideal Customer as narrow as possible, including gender, age, income, lifestyle, employment, location of work and home. Remember that people make decisions to buy things, not companies. For details see The Power of Unfair Advantage: How to Create it, Build it and Use it to Maximum Effect.

When you are done with that homework, let me know what you learned from the exercise. Did it strengthen your competitive advantage? Did it move you into the category of an unfair advantage competitor?

Can you build a brand like the iPod with unfair advantage? Can it be used to set a new industrial and technological standard like Research in Motions Blackberry? I found out the answer. An endless stream of responses to my survey questions was an unqualified Yes!

In fact, without unfair advantage, the end result was not a gorilla brand. Instead it was a starving monkey. Only with the power of an unfair advantage did the idea for the new enterprise move from infancy to a name that stood for something important to millions of people around the globe. That is what manager after manager told me. They gave countless examples.

The trouble I had in seeing this was because there are so many misconceptions about how to build a brand. From misused advertising to foolish choices of strategy, the blind were leading the blind. That included me.

I reluctantly saw the light after being introduced to works by the godfather of modern market positioning, Al Ries. His insights were on the mark, coincident with the newly arrived world-class venture investors and serial entrepreneurs. They too had discovered how to use PR to build a brand. They were great at positioning to out-maneuver competitors and constructed value propositions to compel ideal customers to rush to the store to buy their products. Proponents like Geoffrey Moore Crossing the Chasm agreed.

So now I can see how it is done. And so can you. For instance, read about how the Blackberry was born and converted into a world-class brand in Chapter 1 of The Power of Unfair Advantage: How to Create it, Build it and Use it to Maximum Effect.

So give it a try: Tell a quick story about how you will convert your idea into a world-class brand that so excites your ideal customer that that person races to make the purchase. Id like to read your version.

“John, just tell me what investors are looking for and then well get our money!” That is what I am asked so very often. Engineers are especially eager to find a magic formula. Asians generally believe an introduction to the right person is everything. First time entrepreneurs think if they just get their hands on the secret, then they too will get funded.

Serial entrepreneurs know there is no alchemist’s elixir. There is only unfair advantage. That is what gets the money.

Veterans learned investors are seeking special things in each story (see yesterdays blog about stories). My research showed the following is the rank order of what people with the money are looking for (from Chapter 3 of The Power of Unfair Advantage: How to Create it, Build it and Use it to Maximum Effect): Management that can get the job done; Large, open, rapidly expanding market; Brilliant technology or idea that can be commercialized; Attractive exit strategy for investors; and Strong (unfair) advantage that ties together all of the above. And try reviewing the checklist from venture veteran Eric Young of Canaan Partners (Chapter 30).

Note the list starts with people, the managers that know what to do and can get it done.

Let me know if you think other elements belong on the list and why.

What would you do if you bumped into an investor in the lobby of a hotel who said “Ive got $5 million to invest in you if youve got an exciting story to tell me.” It could be an angel, venture capitalist or the vice president of business development at your employer. What would you tell that person holding the checkbook? What story do you have to tell?

People I interviewed said the same thing: “The person with the best story gets the money.” They had seen it happen in person. Entrepreneurs who got funded had the best stories. They were stories about how a small band of courageous adventurers planned to start with nothing more than an idea and transform it into a world-class business within less than a decade. Such stories are exciting, stirring the financial souls of people holding the purse strings so much that at the end of the speaker’s last words, the investors cannot wait to invest.

These stories are all about the same thing: how to build an unfair competitive advantage that propels the new enterprise to become the king of a new hill. That is how ideas become gorillas. You can read an example beginning on page 36 of The Power of Unfair Advantage: How to Create it, Build it and Use it to Maximum Effect.

Whether you appeal for cash from a corporate vice president or grizzled venture capitalist, youll need an exciting story about your unfair advantage to get them to reach for their checkbook.

Do more do you think you need to tell your story?

How did you do with your homework from yesterday? Could you produce a short statement about the unfair advantage of your business?

If you cited a single element, such as “Bill is a god!” then you don’t understand unfair advantage. My research revealed that serial entrepreneurs use many things to build an unfair advantage. They assemble several elements and weave them together into an impressive tapestry. They create grandma’s secret recipe, a collection of ingredients for a dish that is unforgetable.

Try using the following elements to improve your advantage. They are from Chapter 2 of The Power of Unfair Advantage: How to Create it, Build it and Use it to Maximum Effect: Customers, Competition, Capitalization and Investors, Strategic Partners, Strategy, Progress, Culture, Compensation of Workers, You and Your Core Team, and Experience Capitalizing on the Big Breaks.

Can you weave more of those elements into your statement of the competitive advantage for your enterprise? When you can, you will be on your way to building an advantage that your competitors will complain is “Unfair!”

Try giving me an example or two of elements you think are especially important to use to build an unfair advantage. Ill tell you if I agree with you.