Wednesday, June 28, 2017

7 Business Lessons You Can Learn From A 7-Year-Old

NevaLeeReclaSnapshotParents, it’s never too early to start nurturing entrepreneurial talents in your kids! As an active business advisor and angel investor, I’m convinced that we are rapidly entering a new age of the entrepreneur, and those who are best prepared will be the first to reap some big rewards.

You may think you need more entrepreneurial courses in school, or more advanced degrees, but in my experience it’s more of a mindset, some good coaching, and learning by doing that separates the winners from the losers. I continue to see stories of really young entrepreneurs, and I just met a really impressive one, Neva Lee Recla, at a recent Fast Inc. Network conference.

Neva is only seven years old, and she boldly proclaims that she has been handing out her business cards since the age of two. I was participating on a panel to assess about 20 two-minute startup pitches, and she thoroughly impressed everyone with her pitch and her story.

According to one of her two websites (how many of your kids have even one website?), she’s now creating a bestselling book and offering businesses an opportunity to promote their brands by sponsoring her as a young entrepreneur. She has already created or shared in at least three businesses, including selling bracelets, Hot Clothes for Kids™, and creative drawings to benefit veterans and wounded warriors.

After meeting with her (and her entrepreneur parents), I’m convinced that the opportunity is ripe for all of us to learn from the youngest generation in the true entrepreneurial spirit. Here are some of the insights I gained from this interaction:

  1. Experience is a better teacher than academic classes. Memorizing facts is not fun, but making people happy is something you will never forget. Everyone also needs to experience failures, since these can teach more than success. Neva won’t forget some negative feedback on one initiative that “hurts a lot,” but she learned to “keep on going.”

  2. You learn as much as a coach as the student. I can certainly attest that my own efforts to coach and mentor aspiring entrepreneurs have taught me much about business and people. Neva’s parents, who are entrepreneurs themselves, also attest that they have benefited greatly from the coaching experience so far. It’s a win-win opportunity.

  3. You don’t need a blockbuster idea to do good. Results are a function of the execution and the commitment, rather than the idea. We can all think of many ways to improve the world, but too many aspiring entrepreneurs I know keep finding excuses not to start, waiting for that ultimate idea that can’t fail. For example, Neva recently used her drawing talents to produce 1000 sponsored handouts to honor veterans and wounded warriors.

  4. Find corporate sponsors to reduce startup costs. The key to success as a startup is finding like-minded people, and it can work on the front-end with sponsors, before you have back-end customers for revenue. Neva has learned early to focus on ideas with humanitarian, as well as commercial value, such that others are more than willing to help.

  5. Sometimes it helps to not know what’s not possible. It’s refreshing to see the unlimited creativity and curiosity of very young entrepreneurs. I see many aspiring entrepreneurs hesitating due to all the things they know can go wrong, to the point that they never start anything. The lesson is that you can never succeed if you never start.

  6. Startup pivots are best made early and quickly. Based on my own experience, startup corrections are inevitable. No matter how certain you are that your idea will be a winner, you are likely wrong. Young entrepreneurs seem to understand this, and have no hesitation making changes. Others can be very stubborn and charge blindly ahead.

  7. You learn more by talking to people early, versus stealth mode. Stealth mode entrepreneurs won’t tell people about their idea early, or ask for feedback, for fear of the idea being stolen or copied. I watched Neva give her pitch, and talk to everyone who would listen, before too much effort might be wasted. Real entrepreneurs are seldom paranoid.

Overall, the best lesson I heard from Neva for other entrepreneurs is “Don’t be afraid to be yourself.” She is doing what she loves, and you should be doing the same. That’s the only way your passion and determination will get you through the business challenges and the market changes ahead. Enjoy the journey, as well as the destination. Your future and mine depend on it.

Marty Zwilling

*** First published on Inc.com on 06/13/2017 ***

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Monday, June 26, 2017

10 Guidelines For Storytelling To Hype Your Startup

storytelling-to-communicate-businessThe entrepreneur’s challenge is to effectively communicate their value proposition, not only to customers, but also to vendors, partners, investors, and their own team. Especially for technical founders, this is normally all about presenting impressive facts. But in reality facts only go so far. Stories often work better, because humans don’t always make rational decisions.

Most people care the most about the things that touch, move, and inspire them. They make decisions based on emotion, and then look for the facts that support these decisions. Thus it behooves every entrepreneur to learn how to craft stories from their personal experience and the world at large that make an emotional connection, as well as tie in the facts.

I like the point from the classic book “Tell to Win: Connect, Persuade, and Triumph with the Hidden Power of Story,“ by Peter Guber, a thought leader on this subject and long-time business executive. He asserts that everyone today, whether they know it or not, is in the emotional transportation business, and compelling stories are the best way for you to move your business forward.

More importantly, he provides the insights and guidance that we all need to do this effectively. I have extracted these ten basic principles for telling the right story, at the right time, and telling it right:

  1. Select the right story for the right audience. The most successful story tellers are also attentive story listeners. They understand that it’s more important to be interested in their listener than to appear interesting. What does the audience want and need? Armed with this insight, you can tailor a story that will achieve both your goals.

  2. Choose when the listener will be receptive. Getting to know your audience also means figuring out the place and time where they will be most receptive and least subject to interruption or distraction. They need to be able to give you your full attention, so you need to look, listen, and locate their optimal context.

  3. Finding the source material for good stories. The key is not to expect to find a story fully born, perfectly framed, and read to be told, but to constantly stockpile fragments and metaphors that have the potential to become stories. The most effective story material comes from firsthand experience, infused with your personal feelings and emotions.

  4. Make sure your call to action resonates. Every story needs something that will move the audience emotionally to hear your call to action. This may mean finding a hero or a villain in the story, showing your real passion and emotion, or describing the excitement and fear of others.

  5. Get in the right state for your story. Getting in state isn’t just a mental, emotional, or physical process; it’s all three. This state is vital to telling a story because reading your intention is what signals listeners to pay attention to you. Intentions speak louder than words. Train both your body and your mind on your clear intention to succeed.

  6. Tell the story with authentic contagious energy. Like intention, authenticity and energy cannot be faked. If you are telling a story you don’t believe in, your audience will sense it instantly. The good news is that they will pick up just as instantly on your genuine enthusiasm and conviction.

  7. Demonstrate vulnerability and perseverance. Everyone has something in common with every other person, so open up and expose your fears and concerns, allowing others to do likewise. The trick to perseverance is not to eliminate fear, but to use it to ramp up your energy, heighten your passion, and intensify your sense of urgency.

  8. Make the story experience interactive. You can make any business story more memorable, resonant, and actionable by asking for input or a response during the story, or getting an emotional interaction. Engage the audience physically or verbally, which makes them feel like part of your story, and that they have a stake in the outcome.

  9. Engage the senses of your audience. Scientists tell us that words account for only the smallest part of human communication. The majority is nonverbal, more than half based on what people see and more than a third transmitted through tone of voice. The more the audience feels the story in their bodies, the more positive they will react to it.

  10. Listen actively with all your senses. Even when you make the story a dialogue, rather than a monologue, how you listen as a teller is as important to your success as the actual words you speak. You must listen to gauge emotions, attention, and interest – moment to moment. More engaged listeners will be more likely to heed your call to action.

Examples of great storyteller entrepreneurs include Howard Schultz, founder of Starbucks, and Chad Hurley, founder of YouTube. Both demonstrated many times the ability to turn “me” into a “we,” by being able to tell a story that shined the light on an interest, goal, or problem that both the teller and the listener shared. That connection ignited empathy, secured trust, and gathered commitment to the call to action.

Stories have been used since the beginning of time to share knowledge, history, and ideas. Sure they contain facts, but often emotion is what makes them work. How often do you get beyond the facts in your pitch to customers and investors? If you want to kick your business up a level, maybe it’s time to add some stories to your message.

Marty Zwilling

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Sunday, June 25, 2017

5 Reasons NOT To Start With A Non-Profit Business

Charity_gifts_for_Children_with_cancer_foundationA common misconception I often hear in the startup world is that non-profits are easy and safe, since they don’t have to pay taxes, and they don’t have to make a profit for their shareholders. In reality, from the feedback I get from non-profit executives, exactly the opposite is true.

Technically speaking, in the United States, a non-profit corporation or association is one which has been exempted from Federal income taxes by meeting the criteria set out Section 501(c) of the Internal Revenue Code, most notably religious, educational, and charitable entities like the Salvation Army. Other countries have similar exemptions for similar organizations.

Yet even a non-profit has to make a profit on everything it sells, in order to cover operating expenses (salaries, offices, equipment, research, travel, etc.), unless it relies wholly on donations. Even then, the business and leadership efforts to solicit and manage donations cost real money, and may be more difficult than the marketing and sales jobs of most startups.

Here are the common reasons I hear that make starting and running a non-profit actually more difficult than starting and running a conventional business:

  1. Creating a non-profit 501(c) business is a long and arduous process. You can start an LLC for-profit in less than a month, often for less than $100. A non-profit 501(c)(3) status requires filing IRS Form 1023. For a serious entity, the form must be accompanied by an $850 filing fee, and may take as long as two years to complete successfully.

  2. Investors are not interested in non-profits. Even non-profits usually require startup funds for facilities, people, and inventory. But because they can’t project excellent returns on investment, no investors will likely be interested. Also, they can’t sell shares on the stock exchange to raise money, even though both the NYSE and Nasdaq are non-profits. That means they need to grow organically, or find a philanthropist.

  3. Reputable non-profits need to keep their operating expenses low. This usually means keeping wages low, and no fancy facilities. Thus it’s hard to attract top-notch talent, premium locations, and first-class marketing campaigns. Managing volunteers, and running any organization with these constraints is a challenge.

  4. Results are always subject to public scrutiny. Most startups, as private companies, don’t have to disclose their salaries and spending habits to anyone other than the IRS. Non-profits have to answer to watchdog organizations like Charity Navigator for how much of their proceeds actually make it to the causes they proclaim to support.

  5. Some laudable non-profit missions are hard to sell to supporters. A common complaint from many non-profits is that both government and private funders would rather spend their dollars on ‘sexy’ causes such as children’s charities, cancer, and heart disease, rather than long-term causes like global warming and erasing hunger in Africa.

Unfortunately, misuse scenarios, like the lavish lifestyles of leaders and scams, have given the non-profit environment a bad name, making things even tougher. Even reputable organizations, supporting veterans, the police, firefighters or children, often raise eyebrows, with alarming real data like these from the America's Worst Charities report on a popular activist news website:

  • Kids Wish Network – 2.5% distributed cash aid from $137.9 million collected
  • Breast Cancer Relief Foundation – 2.2% distributed cash aid from $63.9 million collected
  • Firefighters Charitable Foundation - 7.4% distributed cash aid from $62.8 million collected
  • National Veterans Service Fund - 7.8% distributed cash aid from $70.2 million collected
  • Children’s Cancer Fund - 4.6% distributed cash aid from $43.7 million collected

These numbers vividly show that non-profits with good causes can fail to achieve satisfying results, in the same way that for-profit startups often fail, even with good products. Despite these challenges, my advice is still to follow your heart and your passion when starting a business.

You shouldn’t choose a non-profit, or a for-profit, because one seems easier, or one can make more money. Do it because you love the cause, the service, or the product, and the challenges will get lost in the satisfaction and results you achieve along the way.

Marty Zwilling

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Saturday, June 24, 2017

6 Ways To Spot Innovative Thinkers For Your Startup

innovative-thinkers-entrepreneursEntrepreneurs are usually highly creative and innovative, but many innovative people are not entrepreneurs. Since it takes a team of people to build a great company, the challenge is to find that small percentage of innovative people, and then nurture the tendency, rather than stifle it.

A few years ago I read a classic book “The Rudolph Factor,” by Cyndi Laurin and Craig Morningstar, which is all about finding the bright lights that can drive innovation in your business. The story most specifically targets big companies, like Boeing, but the concepts are just as applicable to a startup with one or more employees.

The core message is that real innovation and competitive advantage are more people-based than product or process-based. Every good entrepreneur needs a people-centric focus to ferret out creativity and innovation in his team, and to build a sustainable competitive advantage.

The authors observe that people who behave as mentors tend to have an uncanny ability to recognize and nurture people who have innate capabilities along these lines. Here are six of the characteristics they and you should look for:

  1. Problem solvers. Innovators are naturally creative and love new challenges. Some may appear a bit eccentric to people around them. They generally promote unconventional ways to solve problems and have an easier time than most at identifying the root cause of a problem.

  2. Passionate and inquisitive. These team members are passionate about their work and light up when talking about their role or a particular project they are working on. They often ask “Why?” even when it is not the most popular question to be asked.

  3. Challenge the status quo. They believe that questioning is of value and benefit to the organization. This is also how they discover what they need in order to solve a problem, so they aren’t rocking the boat just for the sake of rocking the boat.

  4. Connect the dots. Innovators have the ability to quickly synthesize many variables to solve problems or make improvements. To others, it may appear as if their ideas come out of the blue or that there is no rhyme or reason behind their thinking.

  5. See the big picture. They tend to be natural systems thinkers and see the whole forest rather than a single tree … or just the bark on the tree. They may express frustration if people around them are having conversations about the bark, rather than the forest.

  6. Collaborative and action oriented. They are not loners, and have the ability and confidence to turn their ideas into action. They act on their ideas, sometimes without knowing how they will accomplish them. The “how” is always revealed in time.

Your challenge is to go forth with this new awareness and thinking, to find and mentor those bright lights that will drive innovation and competitive advantage. The next step after finding innovators is to integrate them into your team. A key aspect is establishing a team-based culture that is a safe environment to share and execute ideas.

In fact, this safe and nurturing environment has to extend beyond a single team to the highest levels of the organization. It should embody a style of leadership that is essentially a commitment to the success of the people around you. That opens the door for anyone in the organization to lead from where they are, rather than waiting for management to “do something.”

Innovation is at the very heart of every successful startup. Everyone wins when you look at things very differently and wonder “why”, not “why not.” What better way to extend this power than to surround yourself with more highly creative people? Then you can make the world a place of possibilities, as well as probabilities.

Marty Zwilling

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Friday, June 23, 2017

Do You Have The Right Stuff For A Growth Business?

business-growthAs an angel investor, I get approached regularly by aspiring entrepreneurs who can talk endlessly about their latest great idea, and little else. While I recognize that every new venture starts with an idea, a successful business of lasting value is all about people and execution. Every investor is looking for someone who can turn an idea into a solution, and turn that solution into a business.

If you think about it, some of the biggest current business successes have been based on fairly mundane ideas, including Google (search the Internet), Facebook (talk to friends), and Amazon (electronic shopping). Based just on my own experience, each of these has been tried thousands of times, and only a few of the teams and implementations have met with long-term success.

In fact, according to a new book, “Built for Growth,” by Chris Kuenne and John Danner, the specific beliefs and preferences of the founders can be shown to be far more important than the idea alone. These personality elements drive team motivation, decision making, and personal leadership style, and ultimately shape the plan and the execution leading to success or failure.

In fact, new business founders come in every shape, size, and personality type. Yet my own experience is consistent with the author’s analysis that there are four distinct types who consistently are among the most successful – Drivers, Explorers, Crusaders, and Captains.

After looking at the strengths and weaknesses of each of these in some detail, per a related article by the authors, I applied my own extension of this analysis to how they could be most effective in addressing the five challenges that we both believe every entrepreneur faces, no matter what the type:

  1. Converting ideas into solutions. Drivers and explorers have the advantage here. The challenge is to correctly sense the market, and match the product to the customer need, rather than celebrate the technology or assume that everyone will buy. Captains and crusaders sometimes get too focused on selling the idea before they have the solution.

  2. Galvanizing talented individuals for collaborative impact. Business growth requires many people, so captains step to the forefront in this challenge. Every business ultimately needs empowered teams, with less dependency on star talent. Great businesses are built with trusting relationships, both inside and outside the company. Watch your alignment.

  3. Transforming customers into advocates. Today’s dependence on the customer experience also requires need and cause alignment, as well as exceptional relationships. Every entrepreneur type needs to balance their focus on the customer, with their love for a solution, cause, or business return. Customers will solicit or drive away new customers.

  4. Aligning investors and strategic partners. Investors and external partners tend to favor drivers and captains. However, strategic partners who are already drivers or captains need to align with crusaders and explorers. The challenge is to find complementary relationships, for added value, rather than non-productive thrashing.

  5. Scaling and innovating the business. For scaling and long-term survival, every business needs a continuing focus on the systematic approaches and continuous innovation of an explorer. It’s time to empower more people, keep the broader team engaged, continually translate why to how, and be flexible for market shifts.

It’s evident to me that new business builders who understand their own personality type, with their own particular combination of beliefs and preferences that drive motivation, decision making, and leadership style, can select the right partners, the right team, and the right customers for maximum impact. Business is not rocket science, but it is personal. Get to know yourself first.

Marty Zwilling

*** First published on Inc.com on 06/07/2017 ***

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Wednesday, June 21, 2017

5 New Rules For Marketing In This Participation Age

participative-marketingHave you noticed that more companies beg you to participate in their business today? It started with an email survey on your last stay at their hotel, but now includes requests for online product reviews, to social media input on the design of future products. They do it because engaged customers become loyal advocates and buyers. Welcome to the “Participation Age” of marketing.

Some say it’s happening today because it’s new, and technology makes it possible. Others say it stems from Intrinsic Motivation Theory, which asserts that people have always been motivated by a desire to join, share, take part, connect, and engage, and find that experience rewarding. In any case, your business needs it today to rise above the crowd and edge out competitors.

If you want all the specifics, you must follow the new wave of marketing experts, like Daina Middleton, and her classic book “Marketing in the Participation Age.” I’m most intrigued by one aspect that I believe relates to every business - the move from a hunter-based metaphor to a gardening metaphor – nurturing what we have planted, based on the following five rules:

  1. Embrace test-and-learn values. That means constantly trying new marketing elements, understanding quickly what works, and immediately scaling, then moving on to the next alternative. Nurturing marketers reserve a minimum of 10 percent of their marketing budgets for testing and learning. It’s a dynamic customer environment out there.

  2. Innovate; don’t perfect. The nurture approach leverages from the best of the moment, quickly adding value before someone else does it first. The concept of continual innovation is crucial, because the best may not last long. Pick something that is good enough and embrace the flaw as an opportunity to learn. Adapt quickly and move on.

  3. Act quickly and motivate others, including participants, to act on your behalf. Motivate people, including your customers, to do something to improve your marketing today. Inspire your organization to act quickly and create an environment that rewards moving quickly. Estimate and act; because if you don’t, your competitors will.

  4. Mix and blend; don’t invent. Partner with others to create unique solutions that might benefit your brand, product, or solution. Choose an agency partner who is pushing the envelope and remember to consider technology, media, and creative opportunities. Look for elegant blends of all three, not an elegant single media solution.

  5. Embrace risks and champion failures. Prepare to learn from mistakes and accept that failures are inevitable in finding success. Partner with agencies that are willing to put skin in the game and get paid only if they deliver results. It often takes several failures to find opportunities that yield the best results.

In the current world of escalating change and information overload, marketing is not a luxury, and participative marketing can be the key to success, even for very technical solutions. We often see a mediocre product with effective marketing outperform a good product with little or poor marketing. Big marketing budgets alone and single blockbuster campaigns don’t assure results.

The message is simple. Ask your customers and partners for ideas, try them all, measure results, and scale up the ones that work. The participants, not the marketers, are in control, and they are demanding a relationship, not just a marketing message. If they don’t find value in the relationship, they move on. The choices and opportunities are theirs.

The situation is not unlike the attraction of current major social media sites, like Facebook, successful multiplayer game sites, like Activision, and today’s real world sports and politics. Gen-Y members were born participants, and they are a major force in every business domain. People thrive on continually learning, feeling empowered, and providing input to the world they live in.

So if you are a startup, or even a mature business, you need to nurture these intrinsic desires and develop more meaningful customer relationships that yield greater revenues. Marketing is no longer a one-way conversation. Does your marketing include listening as well as talking?

Marty Zwilling

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Monday, June 19, 2017

Is Your Leadership Style Motivating or Demoralizing?

angry-man-demotivatingEvery business leader realizes their primary objective is to motivate people to do what is required, yet all of us with any experience in business tend to remember most those times when we felt highly demotivated by our leaders. Since I can’t imagine any leader demoralizing their team intentionally, I’ve concluded that the challenge must be how to see your own faults and fix them.

I’m sure there are a few leaders who are convinced they have no faults, so they don’t look. For the rest, as a coach, I still struggle with definitively telling leaders what to look for in themselves, and how to change. In that context, I just finished a new book, “Communicate Like A Leader,” by Dianna Booher, who has long coached executives at some of the largest Fortune 500 companies.

I like her summary of seven habits that differentiate generally demoralizing managers from ones that are seen as highly motivating. With some of my own commentary, I see these habits characterizing leaders whose management style includes the following:

  1. Dole out bits and pieces versus the big picture. Business professionals don’t want to be treated as “kids,” by parents who parcel out only what they think their children can handle or need to know at the moment. They expect to be motivated by the “big picture,” or higher purpose of your business or group. Don’t ever talk down to your team.

  2. Focus on the “how” rather than the “why.” Only automatons need to be programmed with how to do something, without any understanding of why, and no human is motivated to be a robot. Poor leaders often neglect to offer the why, perhaps because they don’t understand it themselves, or fear they may get challenging questions or disagreement.

  3. Discourage questions as a waste of time. Great leaders actually seek insightful questions and even opposing views, as an avenue to engagement, innovation, and collaboration. The best leaders love to learn, and they know they can’t learn much while talking. Leaders must practice active listening to optimize learning and motivation.

  4. Assign projects or tasks and then disappear. A more motivational approach for leaders is to delegate projects or tasks at a reasonable pace, taking care with each to make sure the team understands the assignment, accepts responsibility, and has the resources to reach the goal. Extra time spent in the beginning will save much time later.

  5. Hire people perceived to be less capable than themselves. Ineffective leaders tend to hire “helpers” rather than “help.” Helpers take more time to manage and train, but won’t challenge your boundaries. If you hire people smarter than yourself, they will be motivated to complement your skills, and both you and your business will benefit.

  6. Communicate indirectly and assume people understand. This approach leaves staff guessing about their standards and expectations, introduces errors, and reduces motivation. People are motivated to deliver if they clearly understand what is expected, with no surprises. Informal direct discussions are more productive than formal ones.

  7. Tend to share mostly bad news or negative feedback. No one is motivated by a leader who only seems to show up when things go wrong. The best leaders communicate personally, regularly, and consistently in both good times and bad. They are quick to celebrate small wins, and give positive feedback more often than negative.

In my experience, the best assessment of where you fit in this spectrum is the amount of positive feedback you get directly from your team, and the number of people who lobby to join your team. If you are hearing more negatives than positives, or your best people are always ready to leave, it may be time to take a hard look in the mirror. Only you can really change the person you see.

Marty Zwilling

*** First published on Inc.com on 06/05/2017 ***

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