Monday, August 31, 2015

6 Reasons To Reconsider Your Planned Corporate Escape

Work_life_balance_rat_race The grass is always greener on the other side. It seems that everyone I know who works in a corporate environment dreams of escaping to become an entrepreneur, and every entrepreneur wishes he or she had the security of a regular paycheck.

As someone who has experience on both sides of this fence, I’m convinced that the move from employee to entrepreneur is far more risky.

Many good entrepreneurs I know have found that corporate roles are “recovery and recharge” positions between startups, since experienced entrepreneurs usually have a broad range of skills, and the flexibility and confidence to adapt. On the other hand, employees who have lived in highly structured and narrow corporate roles often don’t have a realistic view of the world outside:

  1. A lack of focus on the business side of an idea. Technical professionals, in particular, often forget that an innovative product is necessary, but not sufficient, to make a business. Their prior narrow focus in a corporate job gives little insight into the challenges of a winning business model, cash flow and marketing. Customers can be very tough bosses.

  2. Pay from a startup takes longer than you expect. Startup-marketing guru Seth Godin once said “it takes about six years of hard work to become an overnight success,” and he is an optimist. Professionals who leave corporate roles for more money are usually disappointed. Startups cost money for a long time before they pay.

  3. Startup challenges can be more painful then corporate frustrations. Professionals who are currently unfulfilled at a corporate job may not be ready for the startup roller coaster. Entrepreneurs consider vacations, training classes and administrative staff a luxury they rarely see. Make sure your passion is running to a startup, not away from corporate.

  4. A self-centered view of performance. In your corporate role, success is often measured by personal performance, independent of business growth. In a startup, a customer-centric view is required, and business success or failure overrides all personal measurements. There is no room in a startup for the egotistical Lone Ranger.

  5. Unprepared for the loneliness at the top of a startup. Running a startup is tough, since you are really on your own, with no peer support. If your personality already leans toward narcissism, being the boss can bring out the worst in you, leading to intimidation, deception and the use of coercive power. Of course, that leads to further isolation.

  6. Thinking that a startup is a job vs. a lifestyle. A corporate business role may be a short-term job, but the entrepreneur role is a lifestyle commitment. It’s not a job promotion to the next level, nor an escape from too much stress or responsibility. A lifestyle requires a passion for the journey, more than the destination.

Every employee needs to understand these challenges, since the days are gone when people commit early to a lifetime career with one company, or a lifetime of entrepreneurship. Even the average baby boomer today will have switched jobs more than 10 times, according to the U.S. Bureau of Labor Statistics, and Gen-Yers are already switching much more frequently.

If you are planning a corporate escape as your next move, it pays to think hard about a plan B, just in case this one doesn’t work out. Don’t blow up your bridges as you exit, just in case you want to return. Jumping randomly from one bad situation to another is not very smart. Maintaining good connections and good relationships in both worlds is always valuable.

Many corporate employees seem to think all jobs are a necessary evil, and are always looking to minimize the pain. Successful entrepreneurs don’t think of their roles as work, and tend to approach it with passion and excitement. Making that mental transition is the key to any escape, and it needs to happen before you make the move, not after.

Remember, we all spend most of our lives at work contributing something to others, and getting something in return. It’s up to you to make it a satisfying and productive experience, rather than a prison that you dream of escaping from. Maybe it’s time to reset your mindset before hoping that a career change will do it for you.

Marty Zwilling

*** First published on Entrepreneur.com on 8/21/2015 ***


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Sunday, August 30, 2015

4 Customer Decision Moments And How To React To Each

Elizabeth_II_at_an_office_opening Today’s customers are much more in control of their buying decision, as they have more choices and more information than ever before. Almost instantly, via the Internet or on their smartphone in the store, they can find the lowest price alternative or their favorite features, without waiting for push marketing or listening to your best sales person.

This can be an advantage to startups who don’t have the resources and brand awareness of mature businesses, if they understand and position themselves to win in the decisive moments of the new customer buying process. These decisive moments, and how to respond, are outlined in Robert H. Bloom’s classic book, “The New Experts: Win Today's Newly Empowered Customers.”

Bloom is a widely known expert on managing business growth, and he starts by summarizing the three key weapons of current customers, which include an instant summary of choices, prices, and features. His research indicates that they don’t have any old-fashioned customer loyalty, and they want precisely what appeals to them at the moment, preferably customized just for them.

New startups actually have a flexibility advantage over more mature businesses in anticipating and reacting to the four key decisive moments that Bloom outlines and I have observed in the new customer buying process:

  1. Survive the now-or-never moment. You only get one chance to make a great first impression. If you can’t get a positive customer perception at this first moment, you will likely never get another chance – with so many other alternatives. The key to winning in that moment is to think like a buyer, not the seller. Build a relationship and trust quickly.

  2. Win the make-or-break moment. You win here by getting the customer immediately engaged, and keeping him there, by knowing their interests and expectations better than any competitor or alternative. Avoid the extended period of evaluation and negotiation during which the customer will likely move to other transaction alternatives.

  3. Sustain the keep-or-lose moment. The buying process is just the beginning of the customer experience, and it has to remain a good one throughout the time that your customer actually uses your product or service. Great startups manage to continually improve the relationship through outstanding follow-on support and service.

  4. Capitalize on the multiplier moment. Of course you want your customer to come back, but the best ones also become your evangelists in bringing their friends to you, and broadcasting their positive experiences to the world through social media. This is a key moment where your customer acquisition costs go way down, and your profits go way up.

This new world is all about empowered customers. As an entrepreneur and startup, you should love this environment and cater to it. Many existing businesses see it as a big problem, and can’t adapt easily. That’s your chance to step in and compete at every moment of the customer buying process, usage experience, and follow-on events.

As you bring on employees to facilitate your growth, they have to embrace the new reality. Empowered customers required empowered employees, and your internal business processes have to be aligned with the same principles and the same smartphone and Internet technologies. Make sure you adopt the right hiring practices and training to keep your team responsive.

Then you have to trust the team to think and act proactively on behalf of your vision and mission. Of course, both you and they will make mistakes, which are the best learning experiences. Continuous innovation and change are the keys to staying current, reducing complexity, and delivering the winning customer experience to keep you ahead of the competition.

What most companies don’t realize is that businesses don’t drive customer trends anymore, customers drive business trends. Consumers are well aware of the latest technologies, and their expectations are usually ahead of even the most forward-thinking startups. It’s up to you to understand and capitalize on the decisive moments of empowered customers, or you will become a “has-been” before you even start.

Marty Zwilling


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Saturday, August 29, 2015

4 Strategies That Must Be Part of Customer Marketing

customer-marketing-strategy With the advent of social media and the pervasive move to smartphones, even customers who still prefer to purchase in brick-and-mortar stores have dramatically changed their shopping habits. Many people don’t post about their experiences, but still routinely check first to see what others are saying about the brand and the product online.

This new customer paradigm is no longer a homogeneous group driven by traditional media, but a network of unique individuals who interact with each other to develop buying criteria and expect businesses to interact with them in a visible way. If you refuse to play by their rules, they have the power to easily find alternatives, and actively pull other potential customers away.

For example, mobile now has become the formidable new communication channel, posting a year-over-year growth rate of 47 percent in 2014, according to WBR Digital Research. That means your marketing must now include shopping apps, location-based services and mobile wallets. Customers expect personalized messages, delivered to them wherever they are.

Here are four new strategies that every entrepreneur must now include in their marketing platforms to survive and thrive in this digital and highly mobile age, ranked by effort and cost on your part:

  1. Frequent new content on the web, social media and via mobile. I still see too many websites that look like they have had no updates or blogs in months or even years. Today’s customers ignore these sites in favor of ones with dynamic daily specials, promotions and positive reviews easily accessible on their mobile devices.

  2. Get beyond push messages to real customer engagement. Interaction with customers is usually started by responding dynamically to customer-service requests, but must be extended to online chats, comments and social media. Blogs must provide value to customers.

  3. Provide personalized solutions through customer interaction. Today’s customers expect to be able to quickly find what they need with powerful search capabilities on your site, or even the ability to customize your solution to fit their unique needs. One example of this is Nike’s shoe size page. The best sites engage customers more deeply and add more value.

  4. Engage customers to support shared cultural and societal causes. Motivate your customers to support you by helping them support a common social cause, such as feeding the hungry or saving the environment. See this Business News Daily article for some great examples that have benefited the customer as well as the business.

While most entrepreneurs I know would agree with these initiatives, and profess to understand the new customer paradigm, I still see some common pitfalls, usually brought on by too much ego and passion for their new ideas:

  • Assume that everyone loves hot new tools. Most startup founders are early adopters, so they love the latest and greatest technology. The great majority of customers, however, are wary and frustrated by new technology. The best tools, if expensive or hard to use, won’t fit the new customer paradigm you seek.
  • Assume that customers are all like you. Entrepreneurs sometimes minimize customer interaction under the mistaken notion that their personal passion will be shared by everyone in their market segment or generation. In fact, customers are all different, and want to be treated uniquely. In addition, trends change rapidly and you need to keep up.
  • Assume that more options are better. Focus is critical. More features only confuse your customers and complicate your message. Trying to do too many things as a startup usually means that all are done poorly. Start with a clear vision, and focus your measurements and communication around this goal.

Connecting and interacting with the new customer is everything today. These actions will help you drive sales, reduce costs and find better ways to compete, whether your business is online or on the ground. The old customer paradigm is rapidly going away, and so will your business, if you don’t change. In today’s business, maintaining the status quo is a losing strategy.

Marty Zwilling

*** First published on Entrepreneur.com on 8/19/2015 ***


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Friday, August 28, 2015

6 Top Motivations That Drive The Best Entrepreneurs

In my experience mentoring new entrepreneurs and aspiring business leaders, I see far too many who seem to be driven by all the wrong reasons. Everyone seems to espouse extrinsic motivations, such as getting rich, having power, and fulfilling parent dreams, when in fact a focus on satisfying internal interests and desires will likely lead to more success, as well as satisfaction.

I’ve had the pleasure of working with a couple of the best-known entrepreneurs of our time, and read about many more in the updated version of a classic book, “Discover Your True North,” by Harvard leadership expert and best-selling author Bill George. He makes a convincing argument that the best leaders and entrepreneurs follow their intrinsic rather than extrinsic motivations.

He emphasizes the value of finding a way to align your strengths with your intrinsic motivations, which he calls the sweet spot. Some of the most effective sweet spots and intrinsic motivations for today’s entrepreneurs would include the following:

  1. Making a difference in the world. When Bill Gates acted on his dream of putting a computer in every home and on every desk, he had no idea of the fortune it would bring to him, since he wanted only to make a difference. Extrinsic motivations often work against entrepreneurs by leading them to set unrealistic and overwhelming goals.

  2. Find personal meaning from building a business. In his book, “The Art of The Start 2.0,” Guy Kawasaki exhorts entrepreneurs to focus on making meaning, not money. He has said many times that if your vision for your company is to grow it just to flip it to a large company or to take it public and cash out, "you're doomed.” Do it for meaning.

  3. Satisfaction of doing something great. Steve Jobs summarized his intrinsic motivation in 2005 at Stanford in a talk titled “How to Live Before You Die.” He said, “Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do.”

  4. Personal growth and accomplishment. To be a successful entrepreneur, one can never stand still. The best entrepreneurs enjoy the journey as much as the destination. They have a thirst for knowledge that helps them in their business, as well in their own personal growth. That synergy creates a sweet spot that maximizes their impact.

  5. Seeing the real value of one’s beliefs. When asked why he created Facebook, Mark Zuckerberg replied “It's not because of the amount of money. For me and my colleagues, the most important thing is that we create an open information flow for people. Having media corporations owned by conglomerates is just not an attractive idea to me."

  6. Helping others achieve their goals. If you want to achieve your goals, help others achieve theirs. Great entrepreneurs keep your eyes open for other businesses in a related space that can complement theirs. Elon Musk has opened up Tesla car battery patents for use by anyone, which obviously will benefit his business as well as theirs.

Most entrepreneurs will tell you that once they discovered the real purpose for their efforts, they found a new sense of commitment and leadership which allowed them to really inspire and empower others, as well as direct their own actions. At this point they can make the strategic decisions they need to really make a difference, enjoy satisfaction, and leave a lasting legacy.

Many have found that initial failure is one of the best teachers in this regard. I counsel new entrepreneurs to expect failure, and wear it as a badge of pride, rather than trying to hide it. In fact, most investors are wary of anyone who claims to have never failed, reading that claim as an indication of too much caution, or not able to face their own reality.

The primary message here is not to hide your real motivation from yourself, your team, or your investors. You can’t fool them all for very long, and you won’t be happy trying. If you can’t find any intrinsic motivations for what you are doing now, it’s probably time to take a hard look at your lifestyle and your future. Life is too short to be unhappy and unfulfilled for any part of it.

Marty Zwilling


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Wednesday, August 26, 2015

7 Principles Of Business Agility To Dodge Disaster

agility-dodge-disaster Most small businesses are trying to forget the last recession, and get back to “business as usual.” They don’t realize that business as usual is gone forever. With social media and smart phone conversations, real product information spreads at astounding speeds. Entrepreneurs that are not listening, not engaging, and not changing will be left behind even in the best of times.

Business agility is defined as the ability to adapt rapidly and cost efficiently. It is required today for new innovation strategies, analyzing markets for new opportunities, and organizational changes. Today’s customers are much more proactive in going online for the latest information, rather than simply reacting to the “push” messages that businesses traditionally use to drive commerce.

According to a survey conducted by Dimensional Research for Zendesk, 90 percent of respondents asserted that positive online reviews influenced buying decisions, and 86 percent admitted buying decisions were influenced by negative online reviews. Yet there is evidence that as many as half of the small businesses out there still don’t even have a website or go online.

If you as an entrepreneur are not “listening” to your online reviews, and not moving quickly to make changes, you are losing ground. Moving forward, you should expect the market volatility to increase, driven not only by customers, but by new technology, changing government regulations, and a surge in new competitors.

For a business, volatile markets are a source of great opportunities, as well as great risks. Every entrepreneur must be alert enough to spot the change early, and agile enough to adapt quickly. Here are some key principles of agility that are required for you to survive and prosper:

  1. Stamp out organizational inflexibility. Bureaucracy can appear quickly in startups as well as large companies. The real problem is inflexible people. Every organization must constantly review its hiring practices, training, and leadership to make sure the focus is on people who are motivated, open-minded, and empowered.

  2. Continually watch for new opportunities. Don’t wait for your competitors to uncover new markets that you wish you had jumped into early. An agile business doesn’t wait for their current product line to fail, before planning some enhancements. The days of the “cash cow” are gone. Make sure you have a process in place to find your next big thing.

  3. Rotate team members into new roles. If a key person in your organization has never changed roles, that person is likely limiting their personal growth, as well as the growth of your business. Maybe it’s time to find the real strength of your team by giving top performers additional new responsibilities, and rotating the lower performers out.

  4. Define a continuous innovation culture. Innovation doesn’t happen without active leadership, a mindset of commitment from the team, and a defined process. Discipline is required to continually track results, return on investment, and customer satisfaction. Let your continuous innovation become your sustainable competitive advantage.

  5. Foster a performance culture, and avoid analysis paralysis. A strategy of speedy execution is required. If you organization routinely thinks in terms of months or years to make any change, it’s falling behind and probably already obsolete. Don’t wait for expensive outside consultants to tell you it’s time to change, or make it happen.

  6. Practice small change experiments often. The “big bang” theory of change, where innovations only come through huge and expensive new projects, with big rollouts, is a thing of the past. New innovations should be seen as experiments, which are inexpensive, measurable, quick to fail, and without retribution if they don’t work.

  7. It all starts with agile leadership. If you are the entrepreneur, or the top executive, you set the model and the tone of your business. You can’t have an agile business without effective communication, an empowered team, and a constant influx of new ideas. Managing an agile business means managing change, not solidifying a status quo.

Business agility is simply to ability and intent to make small changes, on a daily basis, to penetrate new markets, add new revenue streams, reduce costs, and prune out products that are no longer carrying their weight. All you need to win with customers is to be slightly more visible and have a few more evangelists in the marketplace.

It’s time to take a hard look at your own business. Is it pulling ahead, or falling behind? Standing still in not an option.

Martin Zwilling


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Monday, August 24, 2015

Smart Startups Learn How To Create And Manage Hype

StartupBus Creating a successful startup is all about marketing these days, no matter how compelling your solution. Technologists have long believed that marketing is only required when selling the next pet rock, but in this age of information overload, even the most exciting solutions will be lost from view or assumed to have no value unless they are surrounded by hype.

According to Urban Dictionary, hype is “a clever marketing strategy where a product is advertised as the thing everyone must have, to the point where people begin to feel they need to consume it.”

Even technology solutions with a large intuitive value, such as a cure for cancer, need hype for visibility, education, side-effect considerations and to avoid a scam label. What most entrepreneurs fail to appreciate is that even the most basic marketing takes time, money and creativity, and even the best still may not succeed in winning over competitive approaches or the status quo.

Marketing acceptance, especially for new technologies, actually goes through several predictable stages, called the hype cycle, as outlined by Gartner research. This cycle is actually an evolution to total acceptance of a specific solution or technology, based on the effectiveness of the marketing and hype and on the feedback of early users.

Progress through these phases is unpredictable in time, often takes many years, and can only be measured by customer surveys and market penetration analyses. Here are the five key phases:

  1. Innovation trigger. Every new startup rolling out an innovative solution is the start of a new cycle. Early hype actually should precede the final product, and consists of proof-of-concept stories, media events and industry exposure. Every entrepreneur in stealth mode who insists on waiting for their product runs the risk of being a non-starter.

  2. Peak of inflated expectations. This is the phase where the marketing hype has fully kicked in, often creating unrealistic expectations which the solution can’t yet deliver. Many startup solutions flame out at this point. According to Gartner's Hype Cycle Special Report for 2014, wearable user interfaces such as Google Glass are now in this stage.

  3. Trough of disillusionment/ Solutions and startups that stumble under inflated expectations quickly lose their allure, and enter a long period of slow growth or even a big downturn. Technologies used in these solutions are then seen as red flags by investors. Examples include mobile health monitoring, NFC (near field communication) and virtual-reality systems.

  4. Slope of enlightenment. Over time, with more marketing, and with further enhancements, customers begin to understand and accept the practical benefits of a given solution. This is the phase where strategic partnerships and new markets are key. Investors seek out startups at this point that are well positioned for rapid scaling.

  5. Plateau of productivity. This phase more specifically applies to technologies that have evolved through multiple generations and are widely accepted. Multiple startups can now spawn solutions from the technology, and position themselves for rapid customer growth and early seed-stage support from investors.

I have intentionally broadened the hype-cycle definitions from their traditional hard-technology application to include soft technologies, such as social networks and entertainment. The rules for technology startups are no longer unique -- marketing and hype are now as critical for business-to-business solutions as for business-to-consumer solutions.

There is evidence that the elapsed time of each phase is getting shorter, which just means that every entrepreneur needs to start earlier, and measure feedback more carefully, or risk failure by working on the wrong problem. As an angel investor, I often hear startups touting inflated expectations, or refusing to pivot in the face of disillusionment for their technologies.

The days are gone for those who believe that “If we build it, they will come!” Growing a business in this highly connected and information-intensive world requires a total focus on marketing and evolving customer perceptions. The best startups start early, and put as much focus on the hype as they do on the product. Where is your solution in the hype cycle?

Marty Zwilling

*** First published on Entrepreneur.com on 8/14/2015 ***


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Sunday, August 23, 2015

6 Ways A Prototype Will Enhance Your Startup Idea

startup-prototype These days, everyone wants to be an entrepreneur, pitching their latest and greatest new idea, and looking for someone to give them money. Angel investors, like me, have long figured out that asking to see the prototype is a quick way to separate the ‘wannabes’ from serious players. Talk is cheap, but entrepreneurs who show you a working model of their idea know how to execute.

In reality, it doesn’t take a huge investment of money and time to build a prototype today. If it is hardware, look for one of the ‘makerspaces’ such as TechShop, with all the tools you need to make almost anything yourself. Software products and apps can be quickly wireframed with free tools such as MockFlow, or even Microsoft Powerpoint to lay out the key screens.

Here are six results that you can achieve by building a prototype, which are really the reasons that investors and partners will give you a whole new level of credibility as they evaluate your startup for potential funding:

  1. Something you can touch and feel helps validate opportunity. When you wave your arms and describe your future product, everyone sees what they want to see, and it looks great. With a realistic prototype, you can get more accurate feedback from customers on their real need and what they might pay, before you invest millions on the final product.

  2. Quantify the implementation challenges. Many ideas I hear sound great, but I have no idea if they can be implemented. Building a prototype at least allows both of us to ask the right questions. Visions and theory are notoriously hard to implement. A prototype has to be real enough to be convincing, without looking like science fiction.

  3. Give yourself time to pivot without dire consequences. It doesn’t matter how certain you are of your solution, it’s probably not quite right. Every entrepreneur has to deal with the realities of constant change in today’s market, and it’s much easier to pivot the pre-production prototype than to dispose of unsellable inventory.

  4. Show investors that you are committed, and past the idea stage. Without a prototype, most professional investors won’t take you seriously. In reality, the process of designing, building, and validating a prototype does dramatically reduce the risk, and allows everyone to hone in on the real costs of going into production.

  5. Reduce the time to production and rollout. For both software and hardware technology, multiple iterations are usually required to achieve production quality and performance. Time is money, and may be your primary competitive advantage. Don’t spend your whole development budget, before finding that you need another iteration.

  6. Support early negotiation with vendors and distribution channels. A three-dimensional prototype is always better than just a documented specification when negotiating contracts for manufacturing, support, and marketing. As a startup, you need all the leverage you can get.

If you are not comfortable or skilled enough to build a prototype yourself, it’s time to find and engage a co-founder who has the interest and background to at least manage the work. You should never outsource the management of your core technology. At worst, maybe you can find a trusted friend to guide you, or a nearby university with expert professors and the proper tools.

Of course, there are many commercial resources available on the Internet, including the Thomas Registry, which is an online database of 650,000 specialty manufacturers, distributors, and prototype developers, across every state and country. There are also a wealth of invention support sites, such as InventorSpot and IntellectualVentures.

Unfortunately, working with any of these outside services is hard to manage, risky in results, and some have developed a reputation for taking advantage of unsuspecting entrepreneurs. The amount of money you spend on their services is never an indication of potential success. There is no magic formula for success while inventing. Proceed with your wits about you.

Overall, building a prototype is still a great way to bring your idea to life, for yourself, your team, investors, and future customers. Your target cost expectation should be one-tenth of the total commercialization cost, with the assumption that it will be throw-away. Even still, I can’t think of a better way to validate your solution early, and get credibility with the people who count.

Marty Zwilling


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