Friday, August 18, 2017

5 Steps To A Compelling Story For Business Proposals

rapt-business-audienceIf you are proposing a merger or acquisition, or simply seeking an investor for your business, the process is the same. You have to put together a convincing story of a win-win opportunity for both sides. This may seem intuitively obvious, but as an angel investor, I have heard hundreds of new business pitches that focus heavily on the product, but don’t tell the rest of the story.

For example, if I don’t know you, and you didn’t sell your last company for $800 million, your story needs to educate me on why anyone would bet on you to succeed, and how you would reward me for success. Don’t forget that investors invest in people, more than ideas. Mark Zuckerberg was not the first to build a social media platform, so he had to find investors who believed in him.

Every business pitch has to tell a solid overall story, spanning the range from personal motivation, business opportunity, to return on investment for both you and me. I found some great guidance on how best to do this in a new book, “Let the Story Do the Work,” by Esther K. Choy. She speaks from years of experience coaching entrepreneurs and executives on the magic of a story.

I’m a believer in her five-step formula, paraphrased here, for weaving data around the context of an innovative solution, key players, and an effective business model, to paint a convincing picture of a compelling business proposal:

  1. Put yourself in the audience’s shoes and practice empathy. The first secret is to know your audience before you pitch. These days, with the wealth of information on the Internet and social media, there is no excuse for not finding a connection, even if the pitch is long distance. Address their challenges and interests in the story, not yours.

  2. Persuade with data from third-parties, rather than passion. When crafting business stories in today’s environments, you need proof from authoritative sources, and content to arouse the emotion and support of a specific audience. Remember that every person is different, and their emotion will likely not match yours. Temper your emotion with data.

  3. Use words to frame a limited set of numbers. Don’t try to overwhelm any audience with a large amount of data. The average person can only hold around seven numbers in working memory, so the words that position these critical figures are the key to making the story convincing and credible. Choose your points well, and make them memorable.

  4. Create meaning out of the data and emotion. To create meaning for decision-makers, focus on the whys of the relationship you are proposing. Remember the old storytelling basics of setting the scene and establishing the hook, followed by reminding, recounting, and reframing. In the end, tie back to how it all began, why your audience should care.

  5. Give them what they want to hear, then what they need. If your audience wants to hear about return-on-investment, don’t dodge that subject. Their minds won’t be open to more important points, until the first is addressed. Transition with a story to illuminate other critical needs, ending with the actions you need in the short and long term.

Unfortunately, too many business professionals see their story preparation as “window dressing,” or a waste of their valuable time in moving forward to success. In my experience, the right story, with all the right elements, is just as critical to long-term success as the right solution, with the right team. If you can’t attract the right investors, or the right strategic partners, all else is lost.

Indeed, when you get down to basics, crafting a business success story is the way you communicate to your team and external constituents, and how you market effectively to your customers. It pays to get it right the first time, since first impressions can make all the difference.

Marty Zwilling

*** First published on Inc.com on 08/04/2017 ***

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Wednesday, August 16, 2017

8 Steps To A Positive Mindset And Business Success

think-positiveMany business executives and entrepreneurs I know are convinced that business success is all about having the right solution for the right price. These are indeed important, but we all know people who have failed, despite having a great solution, or have succeeded with a mediocre solution. Thus most investors I know claim to invest in the person, rather than the product.

In the same way, you may think that people assessment is all about skills and experience, but as a mentor to business owners, I have learned to look more for the right attitude, persistence, and determination, as success factors. I like the points made in the classic book, “You Can Win,” by Shiv Khera. His 30 years of business and coaching experience bring credibility to his perspective.

He details a step-by-step formula for becoming a top achiever in life, one I believe applies equally to success in business. In one of these steps, he outlines eight practices for building and maintaining a most critical positive attitude, which I will paraphrase here in a business context:

  1. Change focus, and accentuate the positives. Start looking for what is right in a person or business situation, instead of looking for what is wrong. Forget the mistakes of the past and press on to the greater achievements of the future. Spend so much time improving yourself that you have no time left to criticize. Be an optimist, and give everyone a smile.

  2. Make a habit of doing it now and celebrating completion. We have all procrastinated at some time or another in our business lives, leading to a negative attitude and missed opportunities. A completed task is fulfilling and energizing; and incomplete task drains energy. In today’s fast moving pace of business change, tomorrow may be too late.

  3. Develop an attitude of gratitude and humility. Relationships and collaboration are most important in business. A great philosophy to live by is ‘never forget what others have done for you and never remember what you have done for others.’ Count your blessings, and not your troubles. Celebrate every small win in business with your team.

  4. Make your business a continuous learning process. Too many business owners yearn for that stable point where the business runs like a machine, and there are no more changes. That fosters a lack of attention to new markets and new competitors, instead of an eagerness to learn and innovate. Experience without learning is wasted effort.

  5. Build high self-esteem in you and your team. When people feel good about themselves, the business looks positive, productivity goes up, and relationships are a lot better. There are two kinds of people in business – givers and takers. Takers can never get satisfaction, and they antagonize those around them. Only givers build self-esteem.

  6. Stay away from negative influences in business. Negative influences in business are usually team members or partners that don’t have high self-esteem, and like to highlight negative implications to every business challenges. Other influences to avoid include doom and gloom prognosticators, and work weeks that stretch through every weekend.

  7. Learn to like the things that need done. Some things need to be done whether we like them or not; for example, daily cash-flow analysis and business metrics. Smart business executives learn to use new technology software to give them new insights and more free time. They see customer support as positive lessons to improve quality and processes.

  8. Start your day with a positive business challenge. After a good night’s sleep we are relaxed and ready to review the good news, and take on the challenges of strategic issues. Save the daily crisis for later. In order to bring about change, you must make a conscious effort to focus on positive thoughts and behavior in others, as well as yourself.

The most effective sequence is to get your attitude and team positive, even before you start the business. That’s why smart investors, like the best ones in Silicon Valley, and the ones on Shark Tank, can tell a lot about the future success of a business, even before results. Ask yourself: Am I working as hard on my own attitude, and the attitudes of people around me, as I am on the product?

Marty Zwilling

*** First published on Inc.com on 08/02/2017 ***

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Monday, August 14, 2017

10 Key Business Domains With ‘Big Data’ Opportunities

big-data-opportunitiesEven though ‘big data’ has now been around for several years, the opportunities for startups seem to keep growing, just as the amount of data keeps growing. According to IBM, companies have captured more data in the last two years than in the previous 2000 years. This data comes from sensors, social media posts, digital pictures and videos, purchase transactions, everywhere.

Every day, we create 2.5 quintillion bytes of data — much of it unstructured and far beyond the capability of conventional databases. Hence one segment of the opportunity is the need for new database technologies, like Hadoop, a distributed file system originally designed for indexing the Web. Data capacity is measured in petabytes (1000 terabytes), or soon even yottobytes (1024).

A while back, Gartner formalized their ‘big data’ definition as a “3V” framework - high Volume, high Velocity, and high Variety information asset, requiring new forms of processing to enable enhanced decision making, insight discovery and process optimization. IBM adds a fourth “V” of Veracity to add trust and noise filtering to the challenge of Big Data analysis.

By any definition, the opportunities from ‘big data’ have the potential to create a next wave of successful technology companies that could change the way we all live and work. I will summarize here some of the key business domains with large opportunities, based on reports by Data Flair, Gartner, and other sources:

  1. Targeted marketing. ‘Big data’ can mean big profits. By understanding what you want to buy today, companies large and small can figure out what you'll want to buy tomorrow -- maybe even before you do. By transforming a single shopper's path into data points, companies can see how you move through a store, and how that tracks with sales.

  2. Protecting the environment. Analyzing the massive sets of data available on toxic emissions and weather patterns can help us understand environmental threats on a systemic level. We now have the sensors to track and model future environmental shifts -- and how to stop them. We just need ‘big data’ tools to do the analysis.

  3. Health care in the U.S. Health care is a large and important segment with huge data challenges, mostly not structured or linked. It has multiple and varied stakeholders, including the pharmaceutical and medical products industries, providers, payers, and patients. Each of these has different interests and incentives, with real money to spend.

  4. Social media and web data. Social media postings and e-Commerce transactions are just a couple of the sources of external data that are of great interest to many companies. Facebook now exceeds two billion users posting, the Internet has a billion websites, and there are 600 e-Commerce items ordered every second. That’s a lot of data to analyze.

  5. Automated device generated data. Another ‘big data’ opportunity is the vast amount of sensor data—machine generated data—that exists and is growing at an exponential pace as more machines become internet-enabled. Examples include data generated from traffic cameras, parking meters, toll collection, and black boxes in airplanes.

  6. Scientific research in overdrive. Data has long been the cornerstone of scientific discovery, and with ‘big data’ -- and the big computing power necessary to process it -- research can move at an exponentially faster clip. The Human Genome Project, which took 13 years, could now be completed in hours. There are many more waiting.

  7. Global personal location tracking. Processing personal location data is a domain that includes child safety, law enforcement, tracking terrorists, and travel planning. The data generated are growing quickly, reflecting the burgeoning adoption of smart phones and other applications. This domain is a hotbed of innovation for startup opportunities.

  8. Global manufacturing. Manufacturing is a global industry with complex and widely distributed value chains and a large amount of data available. This domain therefore offers opportunities at multiple points in the value chain, from bringing products to market and research and development (R&D), RFID tracking, to after-sales services.

  9. Data is the new weapon of defense. The traditional battlefield has dissolved into thin air. In the ‘big data’ era, information is the deadliest weapon and leveraging massive amounts of it is this era's arms race. But current military tech is buckling under the sheer weight of data collected from satellites, unmanned aircraft, and intercepted messages.

  10. Public sector administration. The public sector is another large part of the global economy facing tremendous pressure to improve its productivity. Governments have access to large pools of digital data but have hardly begun to take advantage of the powerful ways in which they could use this information. Much change is needed here.

These large opportunities are why IDC says that worldwide revenues for ‘big data’ and business analytics will grow from $130.1 billion in 2016 to more than $203 billion in 2020, at a compound annual growth rate (CAGR) of 11.7%.

Compared to the plethora of dating site proposals that I see, big data is an exciting opportunity for entrepreneurs and investors alike. Be there.

Marty Zwilling

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Sunday, August 13, 2017

7 Barriers To Understanding Your Mentor Communication

mentor-failure-to-communicateMost business mentors tell me that the single biggest problem they have to deal with in small companies is the lack of open, honest, and effective communication, both from the top down and from the bottom up. Some entrepreneurs forget that talking is not communicating. Fortunately these skills can be learned, and the barriers to communication can be overcome one by one.

Founders have to communicate their ideas and products to investors, business partners, and the rest of the team. Then, hopefully, come customers, distribution channels, and going public or merging with an attractive buy-out candidate. Communication is not just talking, but also listening, writing, body language, and “actions speak louder than words.”

According to a classic book on people management by Professor Derek Torrington, “Managing to Manage: The Essential Guide to People Management,” it is the listener who determines the extent to which a message is understood, and that is shaped largely by their own experience and background. From an entrepreneur perspective, here are the barrier to understanding categories:

  1. Unclear frame of reference. Whenever you discuss any startup matter, the receivers will view it from their particular frame of reference, including their values, their priorities, and their background. The responsibility is on you the entrepreneur to decipher the receiver reference, and do the “translation” of your message to them.

  2. Stereotyping and biases. This is the other end of the spectrum, where the entrepreneur defaults to an extreme extrapolation of the listener reference base. Common problem stereotypes relate to age constraints, gender roles, and cultural performance implications. Effective communication requires compensating for language barriers, no stereotyping, and first focus on performance here and now.

  3. Cognitive dissonance. Psychologists use this term to describe the genuine difficulty the people have in understanding, remembering, and taking action on inputs that they find irreconcilable with the current reality, or with strong existing beliefs. The message heard may be unintentionally distorted, and you must repeat and rephrase often to be effective.

  4. Failure to build relationships. When people are listening to someone with confidence and trust, there is a predisposition to hear the message and agree. On the other hand, if the source is unknown or un-trusted, the message may be ignored or minimized. The solution is to work on relationships first, before attempting persuasive communication.

  5. Technical semantics and jargon. Jargon only has meaning if the symbols are already understood. If an abbreviation or phrase is not commonly used outside a specific group, or experts, it becomes negative communication, with people reading it as presumptive, insulting, or an attempt to deceive. The remedy is to use clear and concise language.

  6. Not paying attention and forgetting. We all have the human predilection to be selective in attention. Attention spans seem to be getting steadily shorter. Add the problem of noise, external and internal, which can blank out whole messages. Pick the right time and place for each message type, to maximize attention and retention.

  7. Information withheld. Sometimes an entrepreneur or executive tries to communicate without full disclosure, perhaps to minimize impact, or due to company policy. This is readily recognized by most constituents, negates the message, and erodes trust. In startups, the best policy is transparent honest disclosure across all levels of the team.

It’s important to remember that communication only happens when the other person really hears what you mean to say. It’s not a one-way street, and there are often barriers on both sides. To be successful, the entrepreneur has the responsibility of overcoming all of these barriers to make the interaction effective. The alternative is a lose-lose situation for both sides.

A climate of open, two-way communication is also the only way to ensure that those who do not understand feel free to ask for clarification. No questions does not always mean that everyone heard the message. How often do you ask for feedback to make sure your communication has been effective?

Marty Zwilling

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Saturday, August 12, 2017

6 Pragmatic Marketing Tips To Ramp-Up Your Business

marketing-101-for-entrepreneursMarketing is everything these days. You can have the best technology, but if customers don’t know you exist, or they don’t know how your technology solves a real problem for them, your startup will fail. Yet I see many technology entrepreneurs that focus on the basics of marketing too little and too late.

They skimp on the design of their website, procrastinate on the rollout to make sure the product is perfect, and get so excited about technology features that they forget about creating value for customers. In fact, this article was driven by a startup press release I saw a while back, highlighting a startup’s “geo-fencing technology” as a new basis for discount coupons. How many customers will have any idea what this means to them?

On the marketing side of the equation, there are so many “marketing gurus” and “marketing resources” out there, the real challenge for most of us is to sort out the basic do’s and the don’ts that apply to startups. I like the guidance from marketing coach David Newman’s classic book “Do It! Marketing,” which provides some pragmatic marketing tips for small businesses as follows:

  1. Don’t tell customers how great you are. Parroting a generic message that you have great service, great value, and a great selection says you have nothing unique. You need to clearly convey what makes your startup the only choice for your customers. Give yourself the “So-what?” test and check for a compelling value-based answer.

  2. Don’t fall into the marketing-speak trap. Don’t fall for the temptation to make big claims, empty promises, and mind-boggling jargon. Learn to speak a new customer-specific dialect based on current research and homework. Go directly to the source – your real live customers, and get their priorities, issues, pressures, and challenges.

  3. Don’t waste your time networking with strangers. Start networking smarter and smaller. Invite key people for coffee or lunch one-on-one, and get to know them and their business. Aim first and foremost to make them a friend, and the connections to others will come naturally. Working the circuit of big groups of strangers is minimally productive.

  4. Don’t waste your time following up. If you are focused exclusively on prospects who are actively seeking to solve the problem you are positioned to solve, you won’t need five or seven attempts to get their attention. Craft a no-follow-up sales letter, after you have positioned yourself as the right expert, with powerful testimonials. They will call you back.

  5. Don’t dumb it down for social media. Many entrepreneurs fear giving away their very best insights, strategies, or tools via social media – it might diminish the demand and the profit. In fact, when customers perceive real value in what you give away, they begin to imagine how much more they might get as a real customer.

  6. Don’t put all your faith in passion. Passion is necessary, but not sufficient to grow your startup. Be passionate about what you do, but develop a really strong plan, and a strong plan B too. The more you think ahead of failure, and think beyond failure, the better your chances for success are.

Instead of asking themselves “How and when will this generate sales?” entrepreneurs need to focus more on who they are marketing to and why. Then give them a compelling, specific, and relevant reason to buy from you.

One of the best approaches is to sell the same way that you buy. You look for value in a specific solution, or at least a conversation about your own problem, headache, heartache, or challenge. You don’t buy based on cold calls, spam e-mail, or phone calls that interrupt your dinner. Give your own customers the same consideration. Good marketing is not rocket science.

Thus marketing is the first thing you need to think about and act on in growing your business, as well as the last thing. The only actions that create results are those that make you stand out above the crowd, attract, engage, and win more customers than your competition. Have you reviewed your startup marketing actions recently for the right do’s and don’ts?

Marty Zwilling

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Friday, August 11, 2017

7 Keys To Building Good Habits And Happiness At Work

happiness-at-workAre you one of those people who believe that happiness at work is an oxymoron? If so, maybe it’s time to rethink your perspective, and perhaps start enjoying work for a change. As an advisor to new entrepreneurs and new ventures, I’m seeing a refreshing new focus by Millennials on work and successful new companies with a purpose, and more productivity through happy employees.

Based on results and feedback from several leading companies, including Google, Apple, and Salesforce.com, happiness is the ultimate productivity booster. Happy employees, in this view, are more loyal, make better decisions, excel at managing their time, and develop other crucial leadership skills. There are many good articles which outline what these companies do right.

In fact, many people are quick to put the onus all back on companies to keep their employees happy, but I’m convinced that happiness at work requires effort on both sides. We need guidance on the employee responsibilities in the pursuit of happiness. It’s been my observation that employee attitudes, expectations, and bad habits are often the biggest barriers to success.

Thus I was pleased to see some guidance aimed at the people in a recent book, “Unlocking Happiness at Work,” by Jennifer Moss, who is a well-recognized speaker on the subject of happiness and gratitude at work. She is convinced that happiness at work can never be achieved without the right personal habits, and she has some key recommendations for getting there:

  1. Practical – focus on habits that are most relevant and useful. Although novelty is important in our lives, good work habit building is about opening up bandwidth in our brain to attend to things that we often take for granted, or ignore because we are too emotionally bogged down, like timely and positive response to phone calls and email.

  2. Enduring – add permanent positive changes every day. Building good habits is not a one-time-shot that has a beginning and end. The business world we live in today is constantly changing, so every habit improvement should be seen only as a part of an ongoing learning process. Most people are happiest when they are learning new things.

  3. Repeatable – practice daily repetition until automatic. If we reinforce a behavior through repetition, our brain will start to naturally select that behavior over another. With effort, the behavior change will be permanent. Take five minutes longer to enjoy coffee without diving into emails. Enjoy a 15-minute quiet time at lunch to reset, every day.

  4. Simple – start with some simple quick wins. Keeping a new habit simple will yield a quicker path to automaticity. This doesn’t mean you shouldn’t start more complicated habits; just start with a quick win to build the momentum and feedback. For example, sending someone a thank-you-note every day for a job well done will yield quick payoffs.

  5. Incremental – don’t aim for sweeping changes all at once. Want to get to work on time? Rather than make a big move and setting your clock for 4am, start by setting your clock five minutes earlier each day until the desired arrival time has been achieved. Get to appreciate your peers by stopping by some desk once a week for a couple of minutes.

  6. Short – limit time spent daily developing a new habit. If you never get around to strategic thinking, start with two minutes of quiet, focused time every morning, so it doesn’t seem like a huge investment of time all at once. Get in the habit of putting yourself first at least once per day. Your happiness and productivity will both go up.

  7. Targeted – integrate new habits into a healthy lifestyle. Don’t believe the old myth that it takes 21 days of pain to build a good habit. It’s more important to make key changes a part of your daily routine through healthy incremental steps. Develop a daily routine that includes self-care, including the proper rest, exercise, and recreation.

Given that most business professionals spend roughly 90,000 hours of their life working, separating work from happiness only gives rise to stress and unhappiness everywhere. It’s up to you, as well as your company, to stimulate that sense of meaning in your work that leads to satisfaction on both sides. How hard have you been persisting to make it a win-win relationship?

Marty Zwilling

*** First published on Huffington Post on 08/10/2017 ***

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Wednesday, August 9, 2017

7 Tips On Following The Triple Bottom Line To Success

Sustainable_developmentIt’s always been tough to start a new business, even when the bottom line was just making a profit to stay alive. A few years ago, a second focus of sustainability (“green”) was added as a requirement for respectability. Now I almost always hear a third mandate - social responsibility. Entrepreneurs are now measured against the “triple bottom line” (TBL or 3BL) of people, planet, and profit.

The real challenge with the triple bottom line is that these three separate accounts cannot be easily added up. It’s difficult to measure the planet and people accounts in any quantifiable terms, compared to profits. How does any entrepreneur define the right balance, and then measure their performance against real metrics?

Lots of people are trying to help, with new twists on the age-old model of free-market capitalism that has driven businesses for the last 500 years. Current examples include Conscious Capitalism®, popularized by John Mackey, The B Team, founded by Sir Richard Branson, the 1% for the Planet organization, and the Benefit Corporation (B Corp) now available in 33 States.

In the interest of helping first-time entrepreneurs, as well as existing business executives, keep their sanity as well as their focus, I offer the following pragmatic suggestions for dealing with the triple bottom line requirements:

  1. Sort out your personal definition of success first. Starting and running any business is hard work, so the last thing you need is “success” with no satisfaction. If your primary dream is to help the starving people around the world, or prevent global warming, you might consider a nonprofit, academic, on government role, rather be an entrepreneur.

  2. Making a profit does not imply greed. Many young entrepreneurs seem to think that capitalism and making profit are dirty words. The reality is that you can’t help people or the environment, or yourself, if you don’t have any money. Businesses run by ethical people create value and prosperity based on voluntary exchange, while reducing poverty.

  3. Sustainability and social responsibility alone don’t make a viable business. As an angel investor, I see too many business proposals that are heavy on sustainability, but light on financial realities. Most customers today won’t pay you five times the cost of alternatives, just because yours is “green.”

  4. The whole can be greater than the sum of the parts. The real opportunity for entrepreneurs is to provide solutions that solve a problem better than the competition, while also providing sustainability and social responsibility. Conscious Capitalism, for example, claims 3.2 times the return of other companies over the last 10 years.

  5. Responsibility and integrity are still the key. A responsible entrepreneur promotes both loyalty and responsible consumption by educating consumers so they can make more informed decisions about their purchases, based on ecological footprints, and other sustainability criteria. That’s a win-win business for the customer and the entrepreneur.

  6. Explore new forms of company ownership and profit sharing. There is no rule in capitalism that employees and other stakeholders can’t equitably share in the returns. In fact, there is plenty of evidence that these arrangements, such as with Whole Foods, are easy to implement, and pay big productivity, loyalty, as well as financial dividends.

  7. Begin tracking your positive social and environmental impacts. What you measure is what you get, because what you measure is what you are likely to pay attention to. Tracking can be informal, or you can follow a more formal system, like Global Impact Investing Ratings System (GIIRS). Even informal results can be your best advertising.

It’s a lot more productive and a lot less risky to start early in building your record of the positives on social, environmental, and people responsibility, rather than wait and hope never to be caught in an excessive profits scandal, child labor issue, or poor sustainability practice.

So while the bar for business success continues to go up, because we all now operate on a world stage, the entrepreneur “best practices” haven’t changed. Every entrepreneur needs to start with a strong vision, think long-term, communicate effectively, and always lead with responsibility and integrity. The days of success measured only by monetary returns are over. How does your business stack up against the triple bottom line?

Marty Zwilling

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