they're called preppers, people who are ready for any type of disaster, natural or manmade. how entrepreneurs are marketing to them. and she had a great business plan for a new shoe company until someone ripped off the idea. protecting yourself. coming up next on "your business." small businesses are revitalizing the economy, and american express open is here to help. that's why we are proud to

present "your business" on msnbc. ♪ >> hi there, every. i'm j.j. ramberg, and welcome to "your business," the show dedicated to giving you tips and advice to help your small business grow. business psychologists will tell you that consumer purchases are generally based not on pragmatism but on emotion. and that's why a growing number of entrepreneurs are marketing to a phenomenon of our times, those who fear the unknown and want to be prepared in the event of a disaster or domestic terrorism. we found one small business that searches the so-called prepper movement and practices what they preach. ♪

>> it's so important for people to prepare and to protect their family from what's coming. and for me, it's not if, it's when. >> i'm proud to be a prepper. i think most people are preppers. >> reporter: while they proudly call themselves survivalists or preppers, darren and dave, the owner and manager of california-based off the grid survival supply store also call themselves entrepreneurs. >> we carry the products that you may need in an emergency to take care of your family. >> that's 1 million volts, okay? now, volts won't kill you, all right? but what's going to happen is, every muscle in your body, when you get hit by this, is going to -- and then you will go over. if you have to start with empty plastic bottles, get the ball rolling. know that you have a supply of water that you can go to because, again, three days without water, and you are dead. here's the question. how much water do you have saved up?

because you think you're good, you know. >> we usually keep, like, three cases. three cases of gallon waters. >> okay. >> which is probably like 12 gallons at the most. >> oh, that's terrible, guys. that's terrible, okay? >> fear is a very immediate motivator, and i think it's therefore an especially powerful tool in marketing for good and for bad. >> reporter: adam alter is a professor of marketing at the nyu sterns school of business. he says entrepreneurs like darren and dave use fear in a very direct way to market their products. >> what i would like you to do is make a plan and then work your plan. >> one of the big keys is if people are feeling fearful, that you also give them a tool or tools to deal with that fear. and you give them a sense of control. >> i really equate it back to insurance. our demographic is people who want to be able to be comfortable and survive if there's an emergency. >> so they actually manage the fear, overcome it. even though the chance of something bad happening is small, we want to know that it's something we don't have to worry

about. >> fear is a very strange emotion because it's very beneficial but it's also very destructive at the same time. >> reporter: like many preppers, dave, the store manager, lives on a compound at this remote location. he keeps his family and emergency supplies secured behind this steel fence. >> let's say it's a terrorist attack or major earthquake or crash of the dollar. when that takes place, i highly suggest somebody has -- you know, you have weapons to protect you and your family. because those people that come to take, they're not going to be asking nicely. >> reporter: when that moment of crisis arrives, dave feels he's going to be well prepared. he's got a solar-heated stove, water supplies, independent energy sources, a defensive lookout tower and a pantry stocked to the ceiling with food, medicine and weapons. darren told us one of his most important marketing lessons came from listening to one of his customers, a prepper who came in right after the store opened.

he was stationed at a nearby military base, and his small comment made a big impression on darren. >> he goes, cool store. i wouldn't buy anything here. and i said, well, why is that? he said, well, because this is all survival kits. where's the, you know, mini survival wallet with the file if i need to file to get out of, you know, a tied handcuff if i'm being kidnapped? where's the mres? where's the knives? >> reporter: right away darren expanded his selection, and sales took off. his customers didn't need to be lured into the store. when they arrived, many walked right past the front counter to get advice from other customers in the back. one was a dedicated prepper who knew a lot about the gear and the politics. that was dave. >> what i would say to them is, you know what? please get your head out of the ground. open your eyes. look at what's going on around you. >> dave actually came to me and said, hey. i just want to hang out in your store. i want to talk to other people.

and i want to share ideas and learn what they're doing. >> reporter: that's when darren decided to hire dave to man the front counter. >> my only complaint with dave is, he's so good at talking. sometimes he's not selling. but the great thing is, most people don't make their major purchase on their first visit. you know, they really want to go home and study are it and make sure they're getting the right things. >> what you want to look for is the fit between the paelzperson and what they're selling. if you're a prepper or survivalist and interested in selling to others, at that point they're certainly concerned about the situation at hand. they're already engaged. >> reporter: adam says industries that market products to answer people's fears, whether it's health, fitness insurance or something else, all walk a very fine line. >> can you overload people and overthem with fear. not enough fear obviously doesn't motivate people. what you want to find is that sweet spot, that moderate level

of fear so they can mitigate the fear. >> if something happens, god forbid, i would want to be prepared for that. >> this company is clearly tapping into people's emotions. so what can we learn from what they did that can be helpful to your company? two great guests to give us some insight into that. marketing expert and change agent jeffrey is the head of the hazlet dprgroup and larry winge the author of "grow a pair." larry, nice name. >> thanks. >> that is a memorable name for a marketer. all right. well, great to see both of you guys. >> it's always great to be here. >> what i was thinking as i was watching this, a bunch of things about why they're successful, but one of them was something someone told me this weekend, which was tell, don't sell. these people clearly walk the

walk. they're experts. they got the expert to talk to the customers. you know, the customer who was an expert. and that is the best marketing you could do, right, jeffrey? >> well, always about being the brand that you are, being the promise that you want to deliver. that's what brand is all about. that and something you put on a cow or a horse. does fear work? absolutely. but every emotion works. it's just do you want your brand associated with that? i mean, certainly there are companies. remember the y2k scare where we went out and got prepared and people used that? and then nothing happened. the key thing for you is do you want fear associated with your brand? is it part of your message? let's use listermint or listerine. you can tell which brand i use. they use fear of cavities, hall to hallitosis. >> that's so interesting. i was about to say the same thing which fear is not the fear of a terrible disaster. >> dying. >> it could be fear of i'm not

dressing correctly for work. is fear a good way to look at this. in the same way of what problem am i solving. >> we need to understand that what we heard growing up about love makes the world go around is an outright lie. fear makes the world go around. everything we do is because of fear. never kid yourself about that. it absolutely works. turn over to the religious channels. we're not selling heaven. we're selling fear of hell. and we don't sell watches so you can be on time. we sell watches so you won't be late. we buy deodorant because we're afraid of smelling bad and people won't like us. everything we do is based on fear. and people buy from me, not because they're hopeful to find out how to be successful. it's because they're afraid to be a failure. you've got learn how to use fear correctly and not just hit them over the head with it and scare them so much they won't buy, but use it to sell. >> so should we all be taking a

look at our companies no matter what we sell and say, okay, how -- how can -- what fear are we answering? sort of turn it around? >> it gets to the message directly. and i think that's a key question you want. he's exactly right. that's what we're always selling in some way. we might be delivering the message a little different. you can sell fear with humor. there's lots of different ways in which you can do that. whether it's about bad breath, whether it's about car safety. it's about everything. but in the essence what we're trying to do is the anti. it really gets back to some really fundamental things that we learned back in psychology class. fessner theory which everybody does. every politician practices every single day. what they try to do is get you off the fence. they say something positively or negatively to move you off that fence. that's what advertising is doing. that's what selling is doing. and fear is a great motivator and always has been. again, do you want to be associated with the ultimate fear? >> right. >> and that's really a thing i think you want to really be able to have i agood understanding of

what it is. he has a book called "grow a pair," you know it's going to be direct. and that message is very, very clear. >> you don't know larry very well. he's not direct at all. larry, a shrinking flower over there in the corner. larry, one other thing that i took from the piece is this idea that he listened to his customers. his customer said this isn't the product i want. i want something else and immediately he changed it. >> well, there are a lot of great business lessons in the video we just saw. he does listen to his customers, and his customers actually determined what he was going to eventually sell, and that's the stuff that's selling best. we should all listen to our customers. and he hired a customer to run the front desk because the front desk needed that kind of expertise. i think there's a lot to learn from that. >> all right. larry and jeffrey, thank you for this advice, this discussion on this piece. stick around because we've got more with you in a minute. imagine what it must be like to come up with a business concept, share it with other people only to discover someone

else ripped off your idea and then made a business out of it. it's like a dagger to your heart, right? well, one business owner says that is exactly what happened to her. ♪ >> reporter: cassie rimple has a thriving washington-d.c.-based shoe business, but this is not the company she thought she was going to start. that business was launched by someone else. >> they took the lease and almost took the same name. it was one of these things where is this reality? did i really just about open the store and have someone take this idea from me? >> reporter: it all started in 2003 when cassie quit her job as an accountant to follow her passion and open a specialized shoe store. >> when i was planning to do then was offer something that's unique and offer this edited collection, which a lot of people go to boutiques specifically for that. >> reporter: even before the launch, cassie was sharing her concept with friends and family.

>> i was very proud, very excited, was telling lots of people. >> reporter: at a wedding, cassie told some folks about her idea. and she says those people shared the news with others. soon after her dream turned into a nightmare. while attending a trade show in las vegas, she quickly realized her business idea may have been lifted. >> i went to meet with one of the designers. and i had already previously met with her. and she said, i am so confused. somebody just came in. i thought they were with your company. they had a similar name. you know, obviously they're buying my collection. and so, you know, i thought it was you. i said, well, that is strange. do you happen to have their card? >> reporter: cassie called the phone number and got quite a surprise. as she recounts the conversation, it went something like this. >> i said, well, my name is cassie remple. you're not going to believe this, but i was about to open the same exact store in the same location. and really, it almost had the

same name, too. they're, like, well, you just must be shocked, but it's not a coinciden coincidence. we actually heard about what you were doing, and we thought it was a great idea, so we decided to do it ourselves. and at that point, i was speechless. >> reporter: it's hard to imagine that someone would actually casually add manity to stealing her idea. but whether they did or they didn't, cassie says because it was still just an idea, her hands were tied. >> there was nothing i could do. there was nothing tangible that i could go back and act upon. and i'm not sure i would have anyhow. >> reporter: it took months for cassie to get over her disappointment. but she was determined to stick to selling shoes. and that's when devastation turned into inspiration. >> out of that really disparaging, heart-wrenching experience, my business was born. >> reporter: cassie reached out to other professionals for a crash course in catalog sales. while some people doubted her, she was determined to push

ahead. >> at the time people were thinking, shoes in a catalog? that's never going to work. >> reporter: of course, that was then. and this is simply soles now. staying true to her original mission, cassie owns a company that sells designer names, and she's even added designs of her own. >> my brand is lillybee. and i started lillybee in spring of 2008, and it's become our best-selling collection. >> reporter: and while cassie admits she's now a bit tight-lipped about her ideas -- >> i'm a little bit i would say more cautious. i think that would be a wise suggestion. >> reporter: she's found peace with her past. >> i am where i am, and i'm very grateful to be here. so i really strongly believe that good or bad, every experience helps mold you and shape you for what's to come. >> small businesses have a higher fraud rate than larger companies. so how secure is your business?

here now are five ways to protect yourself from some common forms of fraud and cyber crime courtesy of the u.s. small business administration. one, separate your personal banking from your business accounts. that way fraudsters can't get their hands on all your money. reporting deductions on your tax returns will also be easier. two, use a dedicated computer for banking. make sure it's one that isn't used for any other online activity like social media, e-mail and web surfing. these tasks can make machines more susceptible to vulnerabilities. three, have a password policy. make sure you and your employees change them regularly. also, set rules that passwords are complex and use different passwords for different online and system accounts. four, do background checks on potential employees. the first step to prevent fraudulent employee behavior is to make the right hiring decisions. and five, secure your i.t.

invest in a firewall as well as antivirus, malware and spyware detection software. when we come back, jeffrey and larry will answer some of your small business questions about how to expand your staff and marketing reach. and it's that time of year to go back to school. so i return once more to my alma mater to learn more about succeeding with a minimum viable product. if i can impart one lesson to a new business owner, it would be one thing i've learned is my philosophy is real simple american express open forum is an on-line community, that helps our members connect and share ideas to make smart business decisions. if you mess up, fess up. be your partners best partner. we built it for our members, but it's open for everyone. there's not one way to do something. no details too small. american express open forum.

this is what membership is. this is what membership does. it's time now to answer some of your business questions. jeffrey and larry are back with us once again. the first one is about effective ways to grow your employee base. >> what advice do you have for young companies as they're looking to grow their teams? what best practices on hiring would you have? >> lar, i'm going to start with you on this one. what advice do you have for him? >> go slow, especially when you're new and you don't have a lot of extra money. the most expensive thing you're going to ever have is a line item in your budget will be people. so you make darn sure you really need to hire more people and that you can afford to hire more people. the first thing i would do is ask more from the people who already work for you.

as far as best hiring practices, ask the tough questions. ask them what books they've been reading lately. ask them what they know about you and your company and your industry. if they go listen, buddy, i'm just looking for a job, let them look someplace else. >> there's a key. if they don't know anything about your company, it's not worth talking to them. >> i'd offer up ask friends. the best people i've always found have been my family and my friends and the network of that group. i've always found the best people that way. the other thing is i'd ask them why wouldn't i hire you? it's amazing how many people actually answer that question in an interview. so when i talk to that potential hiree -- >> in a real say, they don't say oh, i work too hard? >> they say something stupid like well, i'm always late or things like that. it's amazing how i can just check them off the list. i'm with larry, ask some really direct and hard questions. >> the next one, here's a question about getting more exposure for you and your company. >> i would like to ask how the companies that you've been

involved with have successfully garnered media attention and utilized that to their best ability to either launch a product or bring their brand and image to a larger scale. >> this is your expertise, jeffrey. >> i love opm, other people's money, so i'm going to get other people to talk about my product, and the best way to do that is deliver the product and service beyond anything you've ever done before. people will go out of their way to recommend you, and that is the best way. so do a great job at what you're doing. >> is it just a matter of delivering something great, or do you also have to ask your customers, hey, write about us? >> there's nothing wrong with asking. in fact, you should be asking. i say in my last book, never stop selling your company. always keep selling. i can tell you the number of times i've gone into someone's office, a friend of mine, and they go, i didn't know you did that. so i failed to do that. i learned early on, sell, sell, sell. >> larry? >> well, the worst tinge -- ahin

do is to get media attention is to say look at me, look at me, look at me. it's much better to have other people say look at him, look at him, look at him. you'll get a lot more attention that way. and the way you get people to say look at him, look at him is to be amazing at what you do. you just -- in today's times, you just can't be good. you've got to be amazing. you've got to have great products and amazing service, and there's nothing wrong with asking people to talk about you. >> yeah. i really -- i mean, i've had great experiences, and it doesn't occur to me necessarily to post it on facebook or write about it. but if a company comes and asks me, then i'll say sure, i'll write something. >> other people's money is the best kind of advertising can you get. >> the next one from paul writes, we've been marketing to small groups of users, getting one-on-one feedback. when is the right time and what are some strategies for broadening the marketing to larger groups? we're talking a little bit about the same thing here, larry, right? so if you market to small groups of people, you do a good job, hopefully they'll get the word

out for you. >> yeah, but i would throw a word of caution in here. make sure you're able to handle those large groups. one of the worst things you can do as a small company is to do a really good job for the customer base that you have and say look, we're ready to expand. then you go out and you actually, it all works. and you start to get people's attention. and then you're not capable of handling all of that extra business. and then you screw the whole thing up because everybody's level of service goes down. so be real careful when expanding to make sure you really do have the resources to deliver the service. >> you know what's interesting about his question also, jeffrey, is he said getting feedback from a small group of people. >> yeah, i don't understand the difference between feedback from smalls and large. i say -- and when it comes to feedback, i'm with larry in terms of how you sell and the way in which you're able to serve those. but when it comes to feedback, add a zero. there's nothing wrong with adding a zero and getting more feedback, and you start to find new ways that you can sell to different people that you didn't know before because when we first get started, we start off with that small group. and they're usually a lot like us. >> right. >> and so we want to expand

those that are a lot like us. again, this is a great example of social media. social media is a great way to be able to do this. and there's lots of survey tools out there that you can use that are free and some that you have to pay for. you should be adding more zeros here. >> and also about getting feedback -- and this gets to your point, larry, about being ready to handle. if you're going to get feedback from people, you have to be prepared to be able to react to it, right? >> yeah, especially negative feedback. for a guy who sells all that fear, i get a lot of negative feedback. and you have to be able to handle that criticism and learn from every critique that you get. >> all right. larry and jeffrey, i love talking to you guys. i hope you guys are back soon. and if any of you out there have a question for our experts, just go to our website. the address is openfor openforum.com/yourbusiness. once you get there, hit the ask the show link to submit a question for our panel. again, that website is openforum.com/yourbusiness. and if you'd rather, e-mail us

your questions and your comments, too. that address is yourbusiness@msnbc.com. are you constantly forgetting all of the passwords for different websites? check out our app of the week. roboform allows one-click logins in a safe and easy way. sync to update from either your mobile device or desktop. information storage is protected by an extra security p.i.n. so if your phone ever falls into the wrong hands, your information is still safe. i think one of the most interesting concepts in business today is the idea of a minimum viable product. now, a few months ago i went to my business school reunion at stanford and got to sit down with a handful of professors to talk to them about what they see as key factors to business success today. well, we have the last piece in the series for you. i chatted with russell siegleman, a lecturer in management, who spent seven years at microsoft and 11 years

as a venture capitalist. and i started by asking him to define mvp as it relates to companies. >> a minimum viable product is the idea that you create a very simple prototype, what i call a low-resolution prototype, very simple, that allows you to put the product in front of your early adopter customers and see if they respond to the few pieces of function, the few use cases that you want them to respond to. so in other words, just try to address the core of the problem, and don't bill lots of bells and whistles because that could be a lot of waste. you could spend a lot of time building things customers don't care about. >> this isn't even about just starting up. it's launching a product as an existing expect or service. >> in fact, one company here, intuit, this is how they launch new products. >> so you strip a product or service of its bells and whistles and get it out there to a few customers and see what they think? >> yeah. it's all about experimentation. see if customers have some interest in doing what you're

doing even at a very early stage. the earlier the better. in a sense what you want to find out is whether you're solving the problem before you invest a lot of time and energy. >> it's hard, though, when you have an idea for a product or a service and you can see the big picture, the perfect picture, how do you strip it down and still test it, still get them something that is viable as a consumer to experience? >> yeah, it's a trick. and i'll be honest with you, a lot of entrepreneurs have a struggle with this because they see this grand vision. they see this wonderful product. and it's like why would i show a very limited function that's not, you know, sort of have the final fit and finish that i expect? put it in front of a customer. of course he's not going to like it. the truth is, there's some truth to that, but the truth is if you find early adopters who really care about the need, they should respond to that. and if you don't get that spark, you're probably headed off in the wrong direction. we do advise start really low-resolution prototype, simple

things and see if you can get customers to respond to that. >> what do you do? ask them questions after? give them surveys? how do you know what to do? >> yeah. that's sort of the trick of the mvp. customers' stated intentions and what they do are often quite different. you know, yeah, you can do market research. you can ask them for surveys. you can ask them what they think. but at the end of the day, it's better to see them do something. and that's the whole idea behind mvp. i might tell you i want something. i might tell you i'll use your product, but force me to try to use it and see if i actually do. >> okay, so you launch your mvp, your minimum viable product. how do you get enough feedback so you know how to move from there? >> there's nothing really special about that. what you need to do is you need to enlist early adopters. those are the people that are really motivated to use your product. you give it to them, they start using it. hey, how often did you use it? one of the things about internet products, you can instrument the products and watch how often they use it. >> the key to all of this, then,

is having an open mind because you have, again, this idea of a product. and once you get feedback, the end result that you should be getting may be entirely different. >> that is so true. we tell entrepreneurs, get locked in on the problem, not the solution. because the solution should come from the customer. i mean, you have to have the vision. you want to sort of direct the vision, you know, in a general direction. but you don't want to get too focused at the beginning on the solution because you don't really know what's going to solve the customer's problem. >> i think it's fascinating. we talk so much about listening to the customer and this is the way to actually act on it, too. thanks so much, russ. >> my pleasure. thanks so much for joining us today. to learn more about today's show, just click on our website. it is openforum.com/yourbusiness. once you get there, you'll find all of today's segments, plus web exclusive content to help your business grow. and follow us on twitter as well. it's @msnbcyourbiz. and don't forget to become a fan

of the show on facebook. next week, when you first start your business, every cent counts. so quite often the cheapest place to take up headquarters is right at home. >> it was really just a function of necessity. we needed a place to work. and the home was the best option for that. >> see how these two entrepreneurs are getting clients to see their start-up as reputable despite the fact that their kitchen doubles up as their conference room. till then, i'm j.j. ramberg. and remember, we make your business our business. if i can impart one lesson to a new business owner, it would be one thing i've learned is my philosophy is real simple american express open forum is an on-line community, that helps our members connect and share ideas to make smart business decisions. if you mess up, fess up. be your partners best partner. we built it for our members, but it's open for everyone.

there's not one way to do something. no details too small. american express open forum. this is what membership is. this is what membership does. something weird happen in the capitol today. a genuine real life bill signing happening in our congress. it wasn't a major bill or big ticket reform. just a small jobs packet with small funding for job training. still, though, if you follow politics, if you like the idea of our government working, it's a welcomed sight. it's not what we usually get from this republican house. this is a body that has settled on being against everything obama no matter what. >> this week we're passing two more bills that would encourage businesses to invest and to create jobs here in america. now, compare all this to the president's tone deaf celebration of our struggling economy yesterday. we'll talkut