Monday, January 26, 2015

7 Keys To Being Seen As A Superhuman Startup Founder

Michael-Dell In the beginning all businesses are just people playing out an idea. It’s never the other way around – there is no idea so big that it doesn’t need people to make it succeed. Investors know this, hence the saying “Bet on the jockey (founder), not the horse (idea).” A great jockey is a great role model.

Like it or not, everyone looks to the entrepreneur as the jockey role model in a new business. Typically this energizes new startup founders, but some struggle trying to live up to their own, as well as everyone else’s expectations. In reality, nobody really expects anyone to be superhuman, but it can feel like that.

We certainly wouldn't expect superhuman behavior from the people looking to us for guidance, nor would we want them to expect flawless behavior from themselves. If not flawless behavior, what characteristics and actions do they look for? Here are some frequently mentioned ones:

  1. Demonstrate confidence and leadership. A good role model is someone who is always positive, calm, and confident in themselves. You don't want someone who is down or tries to bring you down. Everyone likes a person who is happy with how far they have come, but continues to strive for bigger and better objectives.

  2. Don’t be afraid to be unique. Whatever you choose to do with your life, be proud of the person you've become, even if that means accepting some ridicule. You want role models who won't pretend to be someone they are not, and won't be fake just to suit other people.

  3. Communicate and interact with everyone. Good communication means listening as well as talking. People are energized by leaders who explain why and where they are going. Great role models know they have to have a consistent message, and repeat it over and over again until everyone understands.

  4. Show respect and concern for others. You may be driven, successful, and smart but whether you choose to show respect or not speaks volumes about how other people see you. Everyone notices if you are taking people for granted, not showing gratitude, or stepping on others to get ahead.

  5. Be knowledgeable and well rounded. Great role models aren't just "teachers." They are constant learners, challenge themselves to get out of their comfort zones, and surround themselves with smarter people. When team members see that their role model can be many things, they will learn to stretch themselves in order to be successful.

  6. Have humility and willingness to admit mistakes. Nobody's perfect. When you make a bad choice, let those who are watching and learning from you know that you made a mistake and how you plan to correct it. By apologizing, admitting your mistake, and accepting accountability, you will be demonstrating an often overlooked part of being a role model.

  7. Do good things outside the job. People who do the work, yet find time for good causes outside of work, such as raising money for charity, saving lives, and helping people in need get extra credit. Commitment to a good cause implies a strong commitment to the business.

True role models, like Jeff Bezos of Amazon.com and Michael Dell before him, are those who possess the qualities that we would like to have, and those who have changed the way we live. They help us to advocate for ourselves and take a leadership position on the issues that we believe in.

We often don't recognize true role models until we have noticed our own personal growth and progress. That really implies that it takes one to know one. Thus, if you are asking the question, that may mean you are well along the road to being that role model already. Don’t stop now.

Marty Zwilling


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Sunday, January 25, 2015

Check Your Startup For Symptoms Of This Malaise

businessman-founder Founders almost always cite lack of money as the reason for failure, but if you look deeper, I believe the reason is more often about dysfunctional people and leadership. Sometimes it comes right back to the founder, in terms of a malaise often called “founder’s syndrome.” A few years ago I was intimately involved with a promising startup that taught me about this issue.

I’ll be short on specifics here, to protect the guilty, but I hope you get the idea. It’s not a disease, but it can kill your startup. You can find a more complete discussion of founder’s syndrome on Wikipedia, but here are a few of the “symptoms” I observed in the founder and CEO in this case:

  1. Advisors and staff hand-picked from friends and connections. Personality and loyalty are apparently the key criteria, rather than skills, organizational fit, or experience. The executive is looking more for cheerleaders, rather than people with real insights and ideas.

  2. Reacts defensively and talks constantly. Sometimes it's time for quiet listening rather than talking. A strong and confident leader will always realize that a defensive response before the input message is complete does not impress investors, nor anyone else on the team.

  3. Staff meetings are for one-way communication. This founder holds staff meetings only to report crises, rally the troops, and get status reports on assignments. There is no concept here of team strategy development, and shared executive agreement on objectives.

  4. With no input and no “buy in” from the team, sets extremely ambitious objectives. These objectives are set based on the desires and dreams of the founder, with no recognition of technical realities, costs, or time required.

  5. Over time, becomes more and more isolated and paranoid. The first clue is some veiled comments about the motives of staff members, advisors, and investors. These become more specific as the situation gets more dire, to the point where key members begin to desert the ship in disgust.

  6. Highly skeptical about planning, policies, and advisors. Claims "they're overhead and just bog me down." The founder perception is that his experience is more applicable than the input of others, and formal planning and policies are just a way of introducing unnecessary bureaucracy.

In the beginning, we all found our startup founder to be dynamic, driven, and decisive. He had a clear vision of what his organization could be. He seemed to know his customer's needs, and was passionate about meeting those needs. Just the traits one would expect for getting a new organization off the ground. However, he had other traits, including the ones listed above, which became major liabilities.

The undoing of the company began when a potential investor, after months of search, was ready to put up $1 million dollars, but made it clear that his firm would likely need to replace the founder with someone with more credentials and experience in this industry. With that revelation, the founder killed the investment deal, and every other potential deal which raised the same issue.

Of course, no situation is this simple. There were product development problems, pricing problems, and early customers who demanded more features and delayed contractual payments. The ultimate result was a startup founder who exhausted his personal funds, drained the investments capability of friends, and drove away the team one by one.

For me, this is a most frustrating and difficult problem for any advisor or team member to deal with, since communication and learning can only occur when someone is open and listening. If any of you out there have seen this, or have some experience or ideas on how to deal with this situation effectively, let me know. You can be a hero if you have the cure.

For all you founders out there, if you find this article anonymously taped to your computer, it might be time to take a hard look at yourself in the mirror. We can’t change you, but you can change yourself. It could save your startup!

Marty Zwilling


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Saturday, January 24, 2015

Non-Disclosures Can Protect Your Idea, Or Destroy It

non-disclosure-agreement Most entrepreneurs I meet are reluctant to disclose anything about their idea to investors before getting a signed confidential disclosure agreement (CDA). Professional investors and advisors, on the other hand, usually refuse to sign these agreements today due to the risk of litigation and administrative workload, and will walk away. How can you make this a win-win opportunity?

First of all, I will admit that there is some risk involved with talking to any potential investors, even with an agreement, just as there is risk in all the elements of your plan, product and market opportunity. Yet I can assure you that people who are paranoid, or want to avoid all risks, won’t be happy as entrepreneurs, so it’s all about balancing the risk-reward scale.

Thus, based on my experience as an entrepreneur as well as a startup investor, there are indeed situations where a non-disclosure is highly recommended, and others where the potential good far outweighs the risk. Here are the key considerations from my perspective:

  1. Dealing with known or trusted investors and advisors. If you are approaching a recognized venture capital group, or even an accredited angel investor, a non-disclosure agreement is counter-productive. These professionals value their integrity, like your therapist or financial advisor, and will not share your business details nor steal your idea.

  2. Unsolicited proposals or requests for information. If you receive an email requesting details on your plan from someone you don’t know, you should respond with a CDA, as well as begin a more serious cross-check with reliable sources. The same is true for people who may approach you at networking events or industry conferences. Build trust first.

  3. Discussions with potential strategic partners. Most often, the best potential partners are already in a business complementary to yours. They could easily be your competitor, or copy your business, so a mutual non-disclosure is required here for protection in both directions. It pays to talk to competitors about the business, but not your business.

  4. Disclosures relative to patents. Entrepreneurs should never disclose the details of a planned or current patent application to any outsiders, even with a CDA in place. Potential investors don’t need this data, except perhaps as part of a final due diligence after agreement on terms. Product details in the public domain can never be patented.

  5. Sharing trade secrets. Some entrepreneurs avoid the patent process, since patent details become public once a patent is issued. Trade secrets, which may be recipes, formulas or processes, should only be disclosed on a need-to-know basis, even to employees, and then always accompanied by a CDA.

  6. Select a reasonable agreement duration. In today’s world of rapid innovation and new technologies, any individual or company should be hesitant to sign an agreement that limits their activities for 10 years or more. In most cases, a term of two to five years should be adequate. If required, all agreements can be renewed before they expire.

The content of a non-disclosure agreement should be kept simple and straightforward, with a minimum of legalese. There are many samples available from trusted sources, including this one from Entrepreneur. I would be suspicious of any similar agreement more than two pages long.

Professional investors often challenge early non-disclosure requests for an idea or concept, since it’s an implementation that makes a business, rather than an idea. They have probably heard the idea a dozen times already, and are waiting to back the right team on the implementation. The last thing they need is an agreement to constrain their actions.

In fact, if you have a good idea, you need smart investors to spread the word to other good investors, so you really want them to talk about you. Remember that without a CDA, you can still explain how your idea works in marketing terms, without revealing how it is implemented or manufactured. If that doesn’t get their attention, it probably won’t get any customer attention either, and that’s the best feedback you can get at that stage.

Marty Zwilling

*** First published on Entrepreneur.com on 1/16/2015 ***


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Friday, January 23, 2015

The Right Marketing For A New Business Costs Least

social-media-marketing The power and influence of paid media advertising, including print ads, TV commercials, radio, and even online digital campaigns is waning, in favor of unpaid earned and owned messaging from your website, social media, key market influencers, and existing customer word-of-mouth. But startups need to remember that even zero paid media doesn’t mean that marketing is free.

The case for zero paid media as the new marketing model was highlighted in a recent book, “Z.E.R.O.” by Joseph Jaffe and Maarten Albarda, both experienced marketers working with new companies, as well as larger firms. They advocate investing in their new framework, where the Z.E.R.O. initials take on meaning as follows:

  • Zealots, disciples, and influencers. New products and startups often require a culture shift to drive acceptance, which can best be accelerated by zealots or a visible chief disciple, like Steve Jobs. Other sources stronger than paid media today include key social media influencers, such as “mommy bloggers” and popular YouTube events.
  • Earned media. This is media exposure from a neutral third-party, such as an unpaid news story on your product or service to highlight innovations or social value. This exposure is highly credible, since you don’t control the message, and extremely valuable since it is not viewed as part of any advertising context.
  • Real customers. Marketing media content from real customers in real time is now commonplace via sites like Yelp, Foursquare, and online reviews. This word-of-mouth media source is also highly credible and valuable, since it comes from “peer” customers, rather than you as the source, or any paid source.
  • Owned media. This includes your website, blog, and presence on social media platforms, including Facebook, Twitter, Pinterest, Tumblr, Instagram, and many more. These usually provide a customer’s first impression of your offering, and should not be blatantly self-promotional, but instead informative, educational, and even entertaining.

As I mentioned, this framework is powerful, but none of these elements are free. A while back in a blog article, I pointed out that none of these justify a startup business plan with little or no budget for marketing. All require planning, deliberate actions, and quality content and event creation which will likely absorb all the savings from reduced paid media campaigns.

In any case, reframing the conversation from paid media marketing to the new framework requires a balance, and measurements along the way to better manage return on investment. In the book, Jaffe introduces three new sets of metrics for gauging progress:

  • Medium-term metrics. This is essentially a series of interim forecasts not dissimilar from mile-markers in a marathon race that advise whether it’s time to pick up the pace or slow down to smell the roses. Examples include counting members of an advocacy program, app downloads, tenured customers, or subscribers to an e-mail list.
  • Long-term sales. We often talk about short-term sales and long-term relationships in mutually exclusive terms. They are polar opposites in terms of their time frames, but how about building a bridge of compromise between them? Whereas every short-term initiative is akin to a traditional campaign, the long-term sales effort is the commitment.
  • Short-term wins. Accountability is not optional, as it’s still important to have something to show for your efforts quickly. Only this time, consider the large “W” (big win), the small “w” (small win) or in some cases even the small “l” (small loss), which represents failing fast or failing smart, insights, lessons, learnings, or pleasing initial results.

I’m not suggesting that paid media channels should be seen as dead to young companies, since even the revolutionaries, like Google, Facebook, and Apple, still rely on paid media to optimize their own efforts. And paid media are hardly standing still, continually figuring out ways to be more effective, using big data and other innovations to get more customer attention.

Thus while I see startups quick to jump on the zero paid media bandwagon (for budget reasons), I recommend a balance. First, go for that earned and owned media channel, using the same budget parameters you might have previously allocated for paid media. Later, you can lower the budget as the metrics show results, or apply the remainder to paid media as a follow-on step.

In all cases the tone and resources must be focused on capturing today’s customers, who are looking for engagement and connection, rather than the traditional loudest noise. Z.E.R.O. marketing is not zero marketing.

Marty Zwilling


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Wednesday, January 21, 2015

How Effective Is Your Business Communication Skill?

diannabooher Every business professional and entrepreneur believes they are good communicators, but how do they know? It’s really the perception of the recipients that counts, and poor communicators are almost always poor listeners, so they don’t hear the shortcomings. Warren Buffet once told a class of business students that better communication could boost their value by fifty percent.

That’s certainly worth going after, so it is time for all to take a hard look in the mirror, recognize the need to improve, and make the commitment to change. But looking in the mirror doesn’t help unless you know what to look for. I see real help a new book, “What MORE Can I Say,” by Dianna Booher, one of the most recognized business communication gurus, which clearly calls out the parameters of effective business communication.

In that context, she offers a nine-point checklist for success in the art of communication and persuasion that I believe every professional should use in their own self-evaluation. I’ll paraphrase a few of her insights here to get you started:

  1. Generate trust rather than distrust. Effective communication requires trust in you, your message and your delivery. We tend to trust people that we think are like us, or we have social proof that others trust, or we feel reciprocal trust from the sender. People who are optimistic, confident, and demonstrate competence generate trust. Are you one of these?

  2. Be collaborative rather than present a monologue. Collaborating for influence has become a fundamental leadership skill. Be known for the questions you ask – not the answers you give. Statements imply that you intend to control the interaction, whereas questions imply that other input has value to arriving at a mutually beneficial decision.

  3. Aim to simplify rather than inject complexity. Simplicity leads to focus, which produces clarity of purpose. People distrust what they don’t understand, what they perceive as doublespeak, or things made unnecessarily complex. Influencing people to change their mind or actions requires building an intuitive simple path to your answer.

  4. Deliver with tact and avoid insensitivity. Some word choices turn people off because they are tasteless, tactless, or pompous. Phrase your communication to avoid biases that might create negative reactions. Consider using other authority figures or quotes to deliver a more persuasive message while eliminating any sensitive implications.

  5. Position future potential instead of achievements alone. The allure of potential is normally greater than today’s actual achievements. This is especially true for career advancement, motivation, and the power of systems. For customers and clients, let them have it both ways. Consider what you can package as your own untapped potential.

  6. Consider the listener perspective rather than the presenter. Listeners tend to average all the pieces of information they hear and walk away with a single impression. More is not always better, so reduce the length of presentations and speeches. Perceptions are more important than reality. Avoid the over-helpfulness syndrome.

  7. Tend toward specifics rather than generalizations. Many executive speeches miss the mark because they aim for the general constituency and hit no one. People need to know how a message relates to them personally, not just what has to be done and why. Your challenge is to make the future seem attainable and applicable to each listener.

  8. Capitalize on emotions as well as logic. Emotion often overrides logic, but logic rarely overrides emotion. For many listeners, a logical explanation merely justifies and supports an emotional decision that has already been made. Recognize and calm first any emotional reactions of fear. Engage multiple senses to reach a listener’s emotion.

  9. Lead with empathy before your own perspective. Empathy starts with active listening to what’s being said and what’s not being said. Listen for the gaps and distortion between perception and reality, and then focus on closing these gaps before any persuasion to your own perspective is attempted. Let others help you listen, and tune your response.

As the economy continues to improve, and the competition gets tougher, you need every ounce of communication skill you can muster to land the career and business opportunities that will be coming your way. Standing still means falling behind. Are you listening and changing at the right pace to get your fifty percent advantage?

Marty Zwilling


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Monday, January 19, 2015

10 Ways To Make Your Investor Pitch More Effective

conference-room-presentation The average length of a funding pitch to Angel investors is ten minutes. Even if you have booked an hour with a VC, you should plan to talk only for the first fifteen minutes. The biggest complaint I hear from investors is that startup founders often talk way too long, and neglect to cover the most relevant points. Or they get sidetracked by a technical glitch due to poor preparation.

If you start by pitching your extended life story, that’s the wrong point. Equally bad is a full tutorial on your new disruptive technology. Investors are more interested in your solution and your business, rather than your technology. Here are some tips on the right approach and the right points to hit:

  1. Match your material to the time allotted. If you have ten minutes, that means no more than ten slides. Then match your pace to cover all the material. I’ve seen several presentations that never moved past the first slide before running out of time. An obvious effort to keep talking after the time limit won’t save your day with investors.

  2. Remember you are pitching to investors, not customers. Some entrepreneurs seem to think that their product pitch is also their investor pitch. I outlined what investors expect to see in an old article “Adding Slides Does Not Enhance Your Investor Pitch.” These are tuned to the ten-minute limit, but are just as adequate if the investor gives you an hour.

  3. Check the setup and set the stage. If the projector doesn’t work, or won’t connect to your laptop, you are the one that loses. Have at least one backup plan, such as copies of your slides to hand out and discuss, in case all else fails. The first words out of your mouth should be “Can everyone hear me, and read the screen?”

  4. Research your audience before presenting. The most respected presenters are the ones who have done the research before-hand to know who is in the audience, and have tailored their message to these interests. If you know only a few people in the audience, acknowledge them, and convince the others that this is not a random cold call for you.

  5. Dress appropriately and professionally. It’s always better to be over-dressed than under-dressed. Business casual is the standard. Remember that most investors are from a generation where faded and torn jeans were on the wrong side of success in business.

  6. Let the top person do all the talking. Tag team shows don’t work in short venues. More importantly, investors want to see and hear the top guy – typically the founder or CEO. They will be judging his aptitude, his character, and his passion. Others can be present for effect, but deferrals to team members for answers are a sign of weakness.

  7. First, get their attention with your elevator pitch. Start with the problem and your solution. These are your hooks, and they better be covered in the first 30 seconds. State your value proposition, and what specifically you are offering to whom. Skip the acronyms, history of the company, and the colorful autobiography.

  8. Lead with facts, but skip the details. Skip the generic marketing phrases like more user friendly, massive opportunity, and paradigm shifting. “According to Gartner, the opportunity is 100 million by 2015, with 12% compounded growth.” Investors don’t need to know the implementation details of your patent or customer support plan.

  9. Don’t forget to ask for the order. How much money do you need, and what percent of your company are you willing give up for that amount? If you want investor interest, the business parameters of a deal should be presented as clearly as the product parameters.

  10. Close by asking for questions and promising follow-up. Acknowledging feedback and actually listening for ways to improve will always lead to a positive impression. You should answer questions with data if you have it, but avoid defensive responses in favor of a promise to follow-up after the meeting.

Most importantly, don’t forget to practice, practice, practice. Just because you have given a thousand pitches in your life, don’t assume you can finesse this one by reading the bullet points in real time from the slides that your team put together for you. You need to be totally familiar and comfortable with your pitch to give it effectively.

Forget the theory that you can “rise to the occasion” and impress everyone with your dynamic speaking ability. If you are pitching the wrong point in the wrong way, the occasion will be more your demise rather than the rise of your dream.

Marty Zwilling


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Sunday, January 18, 2015

10 Keys To Turning Business Systems Into More Profit

business-profit-growth Successful entrepreneurs often start with a “random” idea, but they quickly focus their efforts and follow a “system” to organize their startup and maximize the clout of their activities. Too many entrepreneur “wannabes” never get past the idea stage, or strike out randomly in many directions, hoping that their passion will convince people to follow them and make their business grow.

There are many systems for business out there, but all of them need a way to keep score on progress and impact. If your business is to be a thought leader in the social media world, the dominant system of grading how much influence you have online today is your Klout score, as explained in a recent book, “Klout Matters,” by Gina Carr and Terry Brock.

I’m not convinced that maximizing Klout will maximize your clout in every business, but I do agree that social media must be a part of the system that every entrepreneur needs to implement today to build their business. I especially agree with the ten steps that these authors outline for building systems leading to businesses with clout in today’s world:

  1. Clearly define your purpose. You have to clearly understand what you want to achieve before you are likely to achieve it. If you can’t write it down, you probably don’t understand it. Key factors gating your success will always be your level of competency in your chosen field, level of demand for that skill, and how easily you can be replaced.

  2. Find those arenas where your needs are met. If you want to be a thought leader, find where your potential followers hang out. If you have something to sell, build relationships in the community of buyers. Experimentation is an important part of this process. You will need to test groups constantly to make sure you are in the right one.

  3. Allocate some time to spend on social media. Social media is critical today to almost every business. But make sure the time you spend is quality time, focused on your objectives, and balanced in relation to all your other business requirements. Spend time learning new techniques, and time measuring the return from your efforts.

  4. Be a great resource for others. What we all need is trusted advisors who can help us decipher the clutter. As you become an expert in your field, you need to offer yourself as a trusted advisor, and you will quickly gain a loyal following. Writing, audios, and videos are all great ways to do this, since these all facilitate the one-to-many multiplier.

  5. Provide a unique point of view. Be creative and add value to what you offer your target market. This is true for thought leaders, entrepreneurs, as well as anyone who is looking to be hired in a job. Adding value builds influence and subsequently can build your business, as well as your Klout score. People don’t follow followers or repeaters.

  6. Continue to learn and grow. One of the most important skills that every leader must nurture is how to learn. Some people learn best from conferences, while other learn best from blogs and other information online. Standing still is falling behind, and you can’t afford to fall behind in today’s fast paced business environment.

  7. Forget the old “spray and pray.” A popular old marketing concept was that if you did enough broadcasting of your message to enough people, you would find success. Today you need to talk with, not at, your customers and constituents to get ideas. The best thought leaders have learned how to listen and acknowledge their community.

  8. Build a team. Operating alone in today’s complex business world, including the many social media channels, is not physically possible as your business grows. The good news is that with new technology and the Internet, you can tap into the services of, and build relationships with brilliant people around the world, to build an integrated virtual team.

  9. Seek exposure to new people who are relevant. People come and go in the real world and on social media. Thus it is important that you continually expand your network to engage new people who are building influence in your community. Only in this way will you be exposed to new thoughts and ideas, and enhance your own digital influence.

  10. Focus on a specific niche. You need to find a niche where you have both passion and competency. More passion is not a substitute for focus and competency. Make sure the niche is large enough, and includes people with money, enough to provide an income for you to continue your efforts and be successful.

Influence is more important than ever in today’s connected world as brands, companies, and individuals vie to become the next big phenomenon. Do you have any idea how much influence your company commands today, and what is your business doing to extend that influence to the bottom line?

Marty Zwilling


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