Friday, September 30, 2016

How To Counter Criticism Of Your Million Dollar Idea

Idea_Logo.svgIn business, and in your personal life, the ability to anticipate and overcome criticism is one of the biggest differentiators between leaders, who make things happen, and followers, who may have great ideas but never seem to get things to go their way. In fact, leaders are not remembered for their dreams, aspirations, or intentions – they are remembered because they achieved results.

In my role as an advisor to entrepreneurs, I often find founders who have such conviction and passion for their new idea, that they can’t believe anyone could challenge it. They bristle quickly when investors or even potential customers raise issues with real value, competition, risk, and sustainability. The reality is that important change is always challenged, so you need to expect it.

The best entrepreneurs and business professionals learn to anticipate these push-backs before they happen, and respond calmly and effectively. I like the specifics on how to do this in a new book, “The Agenda Mover: When Your Good Idea Is Not Enough,” by leadership expert Samuel B. Bacharach, Cornell Professor and cofounder of the Bacharach Leadership Group.

Bacharach details seven possible criticisms that every leader with a good idea should anticipate, and provides guidance on how to overcome each. I’ll paraphrase a few of his key points here, with comments from my own experience in business:

  1. Your new idea is too risky. A new idea is a step into the unknown, and always represents some risk. Rather than arguing the level of risk, a better strategy is to highlight the size of the reward. Then mobilize your support for these rewards through testimonials, input from experts, and traction. Increasing your credibility will reduce the perceived risk by all.

  2. The idea will only make things worse. Resistors often make the argument that while the idea seems fine on the surface, something later is certain to turn things upside down. This usually means that your message needs clarification to offset generalized qualms. Narrow your focus through specific case studies and quantify value and results.

  3. This idea won’t change a thing. When faced with this type of “paternal” criticism, the best path is to again ground your case in very specific examples to show that while the idea might not be a total paradigm shift, it will at least represent a significant change in cost or return. Negotiate the time and resources to do a trial, and measure results.

  4. You don’t know the issues well enough. The main goal of this type of criticism is to challenge your ability to lead and question your credibility. The antidote to such criticism is usually less passion and more facts to show that you have done your homework, assembled expert validation, and are interested in full disclosure and opposing views.

  5. You’re doing it all wrong. “The way it’s always been done” may work well for routine repetitive tasks, but it never applies to new ideas. This argument is actually attacking your ability to execute, rather than the idea. To offset this criticism, you need to highlight your prior experience, the expertise of your team, and the quality of your advisors.

  6. It’s been done before. This sort of resistance is predicated on the assumption that there is historical knowledge or past experience that makes your idea irrelevant or doomed to failure. This can be countered best by a proactive comparison of specific elements of your new idea to past practice and experience. Burst the balloon of generalities.

  7. Someone has ulterior motives. This challenge is one of trust, implying some hidden agenda or self-serving motivation for you and your allies, such as huge financial rewards or positions of power. The best strategy here is to not to over-react or be defensive, and highlight specific value to customers. This is where real leaders let others do the talking for them.

In all cases, the key words for countering criticism and moving things forward are anticipate, mobilize, negotiate, and sustain. Anticipate the agenda of others, mobilize your resources, negotiate buy-in and support, and get things done to sustain momentum in your campaign.

Don’t allow yourself to get involved in an escalating competition of egos, which can make others think that your ego is more important than seeing your idea come to fruition. True leaders in business with million-dollar ideas, like Bill Gates and Elon Musk, don’t stop until they have billion-dollar results. Where do you fit in this spectrum?

Marty Zwilling

*** First published on Huffington Post on 09/29/2016 ***

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Wednesday, September 28, 2016

Intrinsic Motivation Models Lead To Business Success

intrinsic-motivatorsIn 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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Monday, September 26, 2016

Add A Personal Story To Make Your Business Memorable

storytelling-in-businessThe biggest challenge for every entrepreneur and every startup today is to get noticed and remembered in today’s information overload. The number of entrepreneurs worldwide is huge, starting an estimated 50 million new businesses in the past year, or 137,000 per day. Every one of these probably has a unique story, but in my years as a startup advisor I only remember hearing a few who capitalized on their story.

The impact of a memorable story was highlighted for me recently as I completed a new book, “Sell With A Story,” by Paul Smith, who is an expert trainer on increasing business results through storytelling. His focus is primarily on improving the results for traditional sales professionals, but I’m convinced that the same principles are equally critical for entrepreneurs selling their startup to investors, strategic partners, and customers.

I say that because I’ve heard too many abstract pitches about the next paradigm-shifting technology, which I can’t relate to, and only a couple with stories that really grabbed me. The best story I remember related the family impact of devastation wrought by Alzheimer’s disease, leading to the development of a mitigation process, and I am now fully committed to this effort.

I learned from Smith that a memorable story doesn’t have to hit you personally, but it does have to include six key attributes to raise it above the standard sales pitch, or new venture problem statement, opportunity sizing, and value proposition. These attributes include the following:

  1. Specific moment-in-time indication. Most entrepreneurs were incented to start their venture at a specific moment they remember well, so telling the story of when and how this happened is a natural. The result will always have more impact than merely outlining a new technology, cutting costs, or tackling a known problem, such as world hunger.

  2. Place where it happened. A memorable story needs to start with location specifics to make it real. Stories relay events, and these events have to happen somewhere. The words can be simple, like “I was meeting with a customer in Boston,” or “When my home was devastated by a tornado.” It’s even acceptable to make up a place with a “what if.”

  3. Every story needs a main character. This should be obvious, but much of what passes for “a story” these days are things like elevator pitches or product descriptions that have no characters at all. In the context of new venture stories, the character would most likely be the entrepreneur, a potential customer, an investor, or all of the above.

  4. The obstacle or the painful need. This is the villain in the story, which should be the problem you are solving. If could be a disease you are designing medicine to combat, missing data that your solution provides, or a safety risk in a common process. The explanation of your solution, financial return, and the rollout comes later.

  5. A worthy goal. The main character in a story must have a specific goal, ideally one that is appreciated or even noble in the eyes of the listener. These days, it’s not cool to have a primary goal of making lots of money, but it is smart to include evidence that the new venture is sustainable as a business, and will provide a satisfying return to constituents.

  6. Something has to happen. Statements about your product’s amazing capabilities or your service commitment, or testimonials about how awesome your company is, are generally not stories because they don’t relay events. They are just someone’s opinion about impact which still belong in marketing collateral, but won’t make you memorable.

If possible, every entrepreneur should craft a unique story, or tune their story, for different audiences, such as investors and customers, to convey your values and your commitment in their specific context. Add emotion, surprise, dialogue, detail, data, and other elements to make your story fresh and effective. Always close stories with succinct lessons and recommended actions.

A compelling story is best used as a “grabber” to get people’s attention and make your venture and brand memorable, but it doesn’t replace any of the new venture basics, such as the business plan, investor deck, or financial model. It can be your competitive advantage over peers and existing players, and it’s fun to do. How prepared are you to tell your best story?

Marty Zwilling

*** First published on Huffington Post on 09/24/2016 ***

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Sunday, September 25, 2016

10 Tried-And-True Strategies For Funding New Ventures

investment-dollarsOne of the most frequent questions I get as a mentor to entrepreneurs is “How do I find the money to start my business?” I always answer that there isn’t any magic, and contrary to the popular myth, nobody is waiting in the wings to throw money at you, just because you have a new and exciting business idea.

On the other hand, there are many additional creative options available for starting a business that you might not find for buying a car, home, or other major consumer item. If you have the urge to be an entrepreneur, I encourage you to think seriously about each of these, before you zero-in on one or two, and get totally discouraged if those don’t work for you.

Of course, every alternative has advantages and disadvantages, so any given one may not be available or attractive to you. For example, professional investors put great priority on your previous experience in building a business, and they expect to own a portion of the business equity and control for the funds they do provide. These are tough for a first-time entrepreneur.

Thus it is always a question of what you qualify for, and what you are willing to give up, to turn your dream idea into a viable business. Here is my list of the ten most common sources of funding today, in reverse priority sequence, with some rules of thumb to channel your focus:

  1. Seek a bank loan or credit-card line-of-credit. In general, this won’t happen for a new startup unless you have a good credit history, or existing assets that you are willing to put at-risk for collateral. In the US, you may find that the Small Business Administration (SBA) can get you infusions of cash without normal backup requirements.

  2. Trade equity or services for startup help. This is most often called bartering your skills or something you have for something you need. An example would be negotiating free office space by agreeing to support the computer systems for all the other office tenants. Another common example is exchanging equity for legal and accounting support.

  3. Negotiate an advance from a strategic partner or customer. Find a major customer, or a complimentary business, who sees such value in your idea that they are willing to give you an advance on royalty payments to complete your development. Variations on this theme include early licensing or white-labeling agreements.

  4. Join a startup incubator or accelerator. These organizations, like Y Combinator, are very popular these days, and are often associated with major universities, community development organizations, or even large companies. Most provide free resources to startups, including office facilities and consulting, but many provide seed funding as well.

  5. Solicit venture capital investors. These are professional investors, like Accel Partners, who invest institutional money in qualified startups, usually with a proven business model, ready to scale. They typically look for big opportunities, needing a couple of million dollars or more, with a proven team. Look for a warm introduction to make this work.

  6. Apply to local Angel investor groups. Most metropolitan areas have groups of local high-net-worth individuals interested in supporting startups, and willing to syndicate amounts up to a million dollars for qualified startups. Use online platforms like Gust to find them, and local networking to find ones that relate to your industry and passion.

  7. Start a crowdfunding campaign online. This newest source of funding, where anyone can participate, per the JOBS Act in the US, is exemplified by online sites like Kickstarter. Here people make online pledges to your startup during a campaign, to pre-buy the product for later delivery, give donations, or qualify for a reward, such as a tee-shirt.

  8. Request a small business grant. These are government funds allocated to support new technologies and important causes, like education, medicine, and social needs. A good place to start looking is Grants.gov, which is a searchable directory of more than 1,000 Federal grant programs. The process is long, but it doesn’t cost you any equity.

  9. Pitch your needs to friends and family. As a general rule, professional investors will expect that you have already have commitments from this source, to show your credibility. If your friends and family don’t believe in you, don’t expect outsiders to jump in. This is the primary source of non-personal funds for very early-stage startups.

  10. Fund your startup yourself. These days, the costs to start a business are at an all-time low, and over 90% of startups are self-funded (also called bootstrapping). It may take a bit longer, to save some money before you start, and grow organically, but the advantage is that you don’t have to give up any equity or control. Your business is yours alone.

You can see that all of these options require work and commitment on your part, so there is no magic or free money. Every funding decision is a complex tradeoff between near-term and longer-term costs and paybacks, as well as overall ownership and control. Yet with the many options available, there is no excuse for not living your dream, rather than dreaming about living.

Marty Zwilling

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Saturday, September 24, 2016

10 Keys To Great Startup Encores Following An Exit

startup-encore-successEntrepreneurs who experience success with their first startup are often amazed to realize that the risks and fears of doing it right the second time go up, rather than down. Encores are tough, especially in the high-risk world of startups, yet every entrepreneur I know can’t wait to start over and do it again. Sometimes their haste or ego causes them to ignore basics, and they fall hard.

Every startup success is a function of great people, products, and profits. But there is no magic formula on how to bring these together a second time, but I did see some good insights on the parameters in a recent startup business parable, “Endless Encores,” by Ken Goldstein, who advises startups and has built corporations in technology, entertainment, media, and e-commerce.

I have pulled together here a few of our joint recommendations to every entrepreneur and startup that I advise. These work the first time, and are required every time for success:

  1. Seek extraordinary people and revere talent. In the heat of the battle, when you have the least time and money to attract the best, it’s easy for an entrepreneur to settle for who is available, rather than who can bring real value and innovation to the business. Repeat leaders think more about talent, while short-term leaders worry first about output today.

  2. Hire for character, competency, and compatibility. Hiring is the single most important thing you do as a leader, and firing is second. It’s more than filling an open slot on your team. You start with skills, but then you have to delve deeply into motivation, trust, ambition, chemistry, and experience.

  3. Diversity on your team expands thinking. Hiring people who are just like you may eliminate revolts, but it won’t get you outside your own box. Creativity requires constructive conflict, a willingness to collaborate, dealing with failure, and boundless iteration. Solution and business model innovation require pushing the limits.

  4. Self-demanding beats boss-demanding every time. Startup successes are never perfect. Too many entrepreneurs are their own worst enemy, trying to do everything right the next time. Remember to embrace pragmatic goals and solutions, and accept a little bit of luck and assistance along the way. Perfectionists never win in the startup business.

  5. Leapfrog products invent and reinvent markets. Incremental product ideas do not change markets. It takes a paradigm shift, like autos to airplanes. On the other hand, making the user experience easier, richer, and more pleasant, as Apple has done repeatedly, can reinvent existing markets. Focus on the customer for repeated success.

  6. Eat your own dog food. If you don’t, why should they? The basic premise is that if a startup expects paying customers to use its products or services, it should expect no less from its own team. There is no better way to get quick and honest feedback on strengths, weaknesses, and usability. Even encore startups should expect to pivot to get it right.

  7. A business model is not an after-thought. Passion and ego are no substitute for a business model that makes sense. Some entrepreneurs are so enamored by their first success that they inherently believe that their next idea will make even more money. If your solution is free, or you lose money on every sale, it’s hard to make it up in volume.

  8. Strategy is charting a course, not making a move. Implementing a strategy doesn’t force the answer you want, so it pays to map out the alternatives and envision the possible as well as the problematic. Markets change rapidly these days, so the strategy that brought you success the first time, may lead to your demise the second time.

  9. Recurring revenue is the foundation for growth. Everyone loves the subscription model, since transaction costs exclude the cost of acquiring a new customer. Investors love this and other recurring revenue models because they facilitate growth through scaling. Sometimes repeat entrepreneurs forget that they must acquire new customers.

  10. Use cash wisely, as if it were out of your own pocket. Every new startup has extensive cash flow out, before any flows in. Serial entrepreneurs, with new bigger ideas, often forget that part of the equation, and are caught short. Repeating successfully means the same focus and due diligence on cash you had the first time around.

Thus the path to repeat success in business is to utilize what you learned from your first experience, and subvert any illogical fear of being exposed as a fraud or a lucky accident. If you have been able to “bring the crowd to its feet” with the success of your first venture, the principles outlined here could bring you endless encores.

Marty Zwilling

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Friday, September 23, 2016

Reflections Of A Retired Senior Manager

By Ernst Gemassmer, Chairman, Startup Professionals

I am a retired executive with ample time to reflect on my personal and business life. My career, in several companies, included management consulting, different positions in many functional areas, heading up international operations and eventually leading to several positions as interim CEO. I have worked in the US, Germany and Holland in addition to travelling the world extensively either developing, managing or turning around different businesses.

As I reflect on my life and career, I would like to elaborate on several aspects, to provide insight and possible guidance to rising young managers and entrepreneurs. Hopefully the reader will benefit from my experiences and avoid hidden pitfalls.

During my entire career I was laser-focused on climbing up the executive ladder, resolving complex issues and meeting ever increasing personal and business targets.

  • Don’t forget your wife and kids. We all work in order to establish and support a family. It is not beneficial to bring your work home with you, since your spouse and partner may not understand or follow the complexities of your work. Above all, remember and celebrate special occasions.
  • Don’t forget your school colleagues. Having attended a number of different high schools and colleges I had the opportunity to meet, get to know and develop friendships with many different and unique individuals. This was a very enriching experience.

    For a number of years I kept in touch with old colleagues and visited them whenever I had a chance. However, my increasingly busy professional life left little or no time to continue these relationships.

    I should have made the time to cultivate these relationships, it would have further enlightened me and broadened my horizons.

  • Don’t forget your friends. Living in different cities, continents and countries, I met numerous neighbors and developed friendships with them. It requires real work and dedication to stay in touch. They (or you) may need your (their) understanding, support and guidance.

    I should have done a better job in staying in touch. Dedicate at least a portion of your time to your old friends. Your company may fail, but your friendships can and should continue.

  • Don’t forget your colleagues. In my various roles I met and worked with many different people. Changing from one industry to another caused me to lose touch with many of these colleagues

    It is well worth the effort to stay in touch and thereby keep up friendships, professional relationship. This will enable you to know what is going on in different companies, technologies and countries.

  • Don’t forget your mentors. During my career I had the pleasure of working with several mentors. They provided unbiased guidance and critique where I needed it most. Over time, changing industries and locations I lost touch with most of my mentors.

    Take the time to keep in touch with those who helped you navigating your career. They deserve it and will appreciate your thoughtfulness.

  • Don’t forget to take care of yourself and have fun. Global travels, challenging work and family are real challenges to getting enough exercise and eating sensibly.

    Make time for workouts and closely monitor your eating and drinking habits. Use your limited free time to do what you enjoy and are passionate about. Your body and your mind will reward these efforts.

  • Keep on learning and follow changes in technology, industry and society. I have seen fundamental and revolutionary changes in technology, our industrial structures and society. There are numerous examples of companies which have disappeared, managers and entrepreneurs who have failed and traditional practices which have fundamentally altered.

    Therefore, even if it seems challenging, keep on learning and stretch your limits from time to time.

Overall I have had a successful life as well as a varied and rewarding career. I have no regrets, but could have paid more attention to the critical elements mentioned above. Hopefully my comments will cause you to reflect on and guide your personal and business career. Good luck and good health.

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Wednesday, September 21, 2016

5 Engagement Principles Now Drive Business Leadership

leadership-business-engagementThe days of leadership without engagement are gone. With interactive social media and video everywhere, everyone needs to feel they have a relationship with their leaders, and every brand needs leader personification for customers to relate. Soon you won’t be able to name a business as one of your favorites if you can’t personally visualize and relate to company leadership.

In the same way, great entrepreneurs and company leaders should no longer rely on faceless and nameless processes to drive business strategy and innovation to stay competitive. The old way doesn’t work, and results more than ever in slow decision-making, lack of real connection with employees, and ignorance of what customers really want.

The new principles of engagement, as well as the dysfunctions of the old, are well illustrated in a new book, “Why Are There Snowblowers in Miami?” by Steven D. Goldstein. He speaks from a wealth of personal experience in private equity, as well as top executive positions at American Express, Sears, and Citigroup.

He found the dysfunctional engagement that sent snow blowers to his store in Miami every year. As a result of this incident and many others, he defined five key engagement principles which resonate with me as just as relevant for new business founders as mature business executives. Here is my adaptation of his engagement principles for all the aspiring entrepreneurs I advise:

  1. Learn to adopt an outsider’s perspective. Every entrepreneur, even though confident in his domain, needs to fight complacency in a world that changes almost daily. You need to look at everything through fresh eyes, continually ask questions not usually asked, and actively listen to contrary views. No change means you are falling behind as a leader.

  2. Interact with employees and customers on a regular basis. Authentic communication at all levels and encouraging feedback is how you find out what is really going on. More meetings in your conference room won’t get to the truth as well as simply talking to people who interact with customers directly. Never be too busy to talk to real customers.

  3. Focus on two or three pertinent metrics in any situation. Keeping it simple is the best course. No one can remember your top ten priorities and measurements. Unbundle projects into smaller elements, and personalize the top couple of metrics for each team. These simplified targets are crucial to motivating a team, and getting the focus you need.

  4. Help people know more, so they can do their job better. Knowledge is power, and good information flow and collection tools are of the utmost importance. Information that is relevant and timely needs to be shared widely and efficiently. It’s also important to share the evaluation insights, and to tie the next action steps directly to current results.

  5. Accept that whatever speed you are going is too slow. Time is the enemy in today’s global marketplace. Follow the guiding motto of Andy Grove at Intel, “Only the paranoid survive.” It’s vital to get quick wins, learn rapidly from failures, and get comfortable with constant change. Waiting is never an option, as competitors will always be moving.

In the same fashion, these engagement principles must be applied to customers. More and more, I see evidence that customers want to be pulled to your company by engagement, rather than feel that you are pushing yourself on them. There are a multitude of opportunities through social media to engage your customers, as well as getting out of your office into the marketplace.

Customer business leadership through brand icons, such as Ronald McDonald and Aunt Jemima, is fading fast. Customers as well as employees want to relate and engage with real people as leaders, and business leaders need to interact with real employees and customers to stay vital and current.

As an entrepreneur, you need to start this focus early, with the same passion you currently apply to your new idea and solution. Have you taken a hard look recently at where you are spending most of your time?

Marty Zwilling

*** First published on Huffington Post on 09/20/2016 ***

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