A Savvy Startup Always Builds a Great Loan Pitch

Many entrepreneurs are convinced that banks are not worth the effort for startups, especially early-stage ones that still don’t have a revenue stream, or collateral to back up their financing needs. A question I get all the time is “Can I ever expect any backing from my bank for a great opportunity?” The short answer is that some banks will help, if you do your homework.

The first thing to remember is that banks only do loans – they don’t do equity investments like angels and venture capitalists (and vice versa). To get a loan, you generally need to satisfy their 3 C’s – credibility, capacity, and collateral. That traditionally translates to at least two years of positive cash flow, with enough assets or receivables to cover at least 80% of the loan.

If you don’t have that, there are things that you can do to compensate. All banks are looking hard right now to get back in the game, and certain ones, like Silicon Valley Bank, are more focused on small businesses. I found a great discussion with Mark Horn, a former Silicon Valley Bank senior vice president, published by Jill Andresky Fraser some time ago, which outlines seven issues Mark says every startup must address when pushing the limits for a loan:

• A clear mission. You have to get past how great the product is to address clearly what your business rationale is, why it is different from the competition's, and why it will succeed. Be concise as well as complete. Show focus and your understanding that your company is something more than just a good idea.

• A winning product or service. Provide a simple yet complete description of your product or service and its competitive marketplace. Include any empirical evidence--including market research or technical analysis, if that's appropriate--in order to bolster your case about why you believe you will succeed.

• An impressive team. When we say 'team,' that's what we want to hear about: a group of people who are working with the person who had the original idea to give this company its market advantage, including salespeople and finance people. If you don't have a team on staff, then a banker is going to want to hear about outsourcing and advisors.

• Management with a strong track record. When describing each key person on your team, it's important to describe his or her employment history, with an eye toward convincing the banker that the person's experience will help your company achieve its goals. Here, too, focus on outside advisers as well as on key executives.

• Partnerships that lend credibility. Be comprehensive here. What a banker is looking for is validation of your idea. If you've succeeded in bringing savvy investors or corporate partners aboard, then that can be a pretty good sign that your idea can succeed in the marketplace.

• Money from other sources. This question gets to the heart of what bank financing is and isn't supposed to accomplish. Bankers do not contribute equity. What they're looking for is a situation in which others have already done that, so the bankers want to see the owner's money involved.

• A realistic cash plan. What any banker will want to know is, basically, how much money you've already raised and how quickly you've gone through it; how much you're currently spending; and finally, at what point you anticipate earning the revenues to sustain a positive cash flow.

Finally, remember that at almost any bank you'll need to back up your financing pitch with audited financial statements, a well-thought-out business plan, credit check, and maybe even your personal tax returns as well. That's just reality.

In case you hadn’t noticed, the items highlighted by this banker are equally important to equity investors, so you need to do the work in either case. In the long run, bank loans are considered “less expensive” than giving up equity and giving up control, so a savvy startup should never skip this alternative.

Marty Zwilling

What the Startup World Needs is More Steve Jobs

Steve Jobs is one of those entrepreneurs who seems universally either loved or hated, but not many will argue with his ability to innovate in the technology product arena over the years. He was instrumental in creating Apple, which has pioneered a dazzling array of new products, and recently surpassed Microsoft, to become the world’s most valuable technology company.

Carmine Gallo, in a new book titled “The Innovation Secrets of Steve Jobs,” outlines Jobs “insanely different principles for breakthrough success.” I’m not convinced that Jobs’ world is that simple, but Carmine has boiled it down to seven principles, which I suggest every entrepreneur can learn from, as follows:

1. Do what you love. Think differently about your career. Steve Jobs has followed his heart his entire life and that, he says, has made all the difference. Innovation cannot occur in the absence of passion and, without it, you have little hope of creating breakthrough ideas.

2. Put a dent in the Universe. Think differently about your vision. Jobs attracts like-minded people who share his vision and who help turn his ideas into world-changing innovations. Passion fuels Apple’s rocket and Jobs’ vision creates the destination.

3. Kick start your brain. Think differently about how you think. Innovation does not exist without creativity, and for Steve Jobs, creativity is the act of connecting things. Jobs believes that a broad set of experiences broadens our understanding of the human experience.

4. Sell dreams, not products. Think differently about your customers. To Jobs, people who buy Apple products are not “consumers.” They are people with dreams, hopes, and ambitions. Jobs builds products to help them fulfill their dreams.

5. Say no to 1,000 things. Think differently about design. Simplicity is the ultimate sophistication, according to Jobs. From the designs of the iPod to the iPhone, from the packaging of the Apple’s products to the functionality of the Apple Web site, innovation means eliminating the unnecessary so that the necessary may speak.

6. Create insanely great experiences. Think differently about your brand experience. Jobs has made Apple stores the gold standard in customer service. The Apple store has become the world’s best retailer by introducing simple innovations any business can adopt to make deep, lasting emotional connections with their customers.

7. Master the message. Think differently about your story. Jobs is a great corporate storyteller, turning product launches into an art form. You can have the most innovative idea in the world, but if you cannot get people excited about it, it doesn’t matter.

Carmine suggests and I agree that these principles for breakthrough innovation will only work if you see yourself as the brand. Whether you are an entrepreneur working out of your bedroom, or a small business owner looking for ideas to improve your business, you represent the most important brand of all – yourself.

How you talk, walk, and act reflects upon the brand. Most importantly, how you think about yourself and you business will have the greatest impact on the creation of new ideas that will grow your business and improve the lives of your customers.

Thus you need to look inward first and assess your basic potential. Then imagine what you could achieve in business with the real insight and inspiration. Imagine what you could accomplish if you had Steve Jobs guiding your decisions. What would Steve Jobs do? Follow the principles above and you will know.

Marty Zwilling

The Seven Best Habits of Highly Effective Startups

I’m always looking for evidence of early startup characteristics that might be predictors of long-term success. Every investor has his own list, usually based on his own very small sample, or simply his gut feeling. Of course, we would all like to have a magic list based on more definitive tracking of many real startups over time.

In that context, I recently came across an old study of 27 startups featured in Inc’s annual “Anatomies of a Start-up,” done for “The Journal of Business Venturing,” and published by George Gendron in Inc Magazine. As it turned out, 17 of the 27 companies were still in business seven years later, which is at least double that of other studies.

To determine what factors made a difference, the researchers compared the 27 companies using numerous variables. Of all those variables tested, only seven proved to be reliable predictors of survival. Here is my own net of those seven habits:

1. Founder is ready, willing, and able to learn. We have all known entrepreneurs whose egos are so large that they can’t be bothered listening to any advice from friends or experts, and they insist on doing things their way. Effective entrepreneurs are always open to learning, no matter what their prior experience.

2. Seek out established suppliers and channels. The challenge of a creating a new product or service is tough enough, without insisting on a new supply chain, and a new distribution channel. The most effective startups focus on their core competency, and work hard to pick the best of the rest for partners.

3. Pays close attention to new potential competitors. Effective startups are never comfortable just because the features they plan for rollout in six months are ahead of what competitors have now. Things move fast in the startup world, and real competitors never stand still. Reassess new entrants and competitors every month.

4. Spend more time on initial positioning. Like the old saying, you only get one chance for a great first impression. Overcoming a bad image, or even changing a non-image, takes lots to time, money, and effort. Your initial business identity can make or break your startup.

5. Do your homework on minimal capital requirements. Usually that means have a Plan B and Plan C, just in case your initial source doesn’t materialize, or takes much longer to finalize that you expected. Running out of capital in midstream is a brick wall that can derail even the best plans.

6. Offer customized products or services. It’s very difficult for a startup to jump quickly to the volume required to sustain them as the low-cost producer. Big gorillas with deep pockets find it hard to scale products that are designed or produced to order.

7. Choose a large market in a growth industry. By definition, a growth industry has a history and an outlook of at least double-digit annual growth. A large market means at least $500 million in potential sales if the company is asset-light, and $1 billion if it requires plenty of property, plants and equipment.

This study jibes with other academic research in showing that no single factor is a reliable predictor of success, but taken together they do add up to a considerable advantage. In my view, a necessary but not sufficient first predictor of success is the habit of building a plan.

It’s the plan building process that provides the value, and gives you real insight into your market, your customers, and the competition. After that, it’s all about learning and execution. If you see a startup with the execution habits listed above, that may be the horse you want to bet on, and ride to the finish line.

Marty Zwilling

Web 3.0 Brings a New Wave of Startup Opportunities

What if your Google search for ‘Paris Hilton’ listed your top result as the Hilton Hotel in Paris, because it knew your interests were not in the other direction? This is the current dream of Tim Berners-Lee, the man who invented the (first) World Wide Web.

He calls his dream ‘Web 3.0’ or the ‘Semantic Web,’ meaning it understands user context. He and many other experts believe that the Web 3.0 browser will act more like a personal assistant than a search engine. As you search the Web, the browser records your interests in your local storage. The more you use the Web, the more your browser learns about you, and the more relevant will be your results.

Current advertising and public relations startups are already thinking along these lines in fields all the way from clothes shopping, art galleries, online advertising, to managing press releases. In some ways, these aren't that different from the old Amazon.com "recommendation engine," which suggests new products based on your surfing and buying habits, but they go much further.

Someday you will be able to ask your browser open questions like "Where should I take my wife for a good movie and dinner?" Your browser would consult its intelligence of what you and she like and dislike, take into account your current location, and then suggest the right movies and restaurants. If you are the first to deliver this, your startup can be the next Google success!

But some are skeptical about whether the Semantic Web - or at least, Berners-Lee's view of it - will actually take hold. They reference other technologies also trying to reinvent the online world as we know it, from 3D virtual worlds to intelligent avatars. Web 3.0 could mean many things, and most of the possibilities have not yet been invented.

The Semantic Web isn't really even a new idea. This notion of a Web where machines can better read, understand, and process all the data floating through cyberspace first surfaced in 2001, when a story appeared in Scientific American. This article describes a brave new world where software “agents” lead the way in performing Web-based tasks that elude most humans.

A current example is the GetGlue from AdaptiveBlue. If you visit a movie blog, and read about a particular film, it immediately links to sites where you can buy or rent that film. Another example is WolframAlpha, an amazing computational engine that went live recently, which creates intelligent results, graphs, and reports from any natural language question.

But we are a long way from agents that can do full natural language processing and think on their own (artificial intelligence). A recent startup, Alitora Systems, provides software to enterprises based on a natural language processing (NLP) engine.

It builds knowledge statements from unstructured media files - that’s a particular challenge for the life sciences where high-value knowledge about many things, such as the relationship between genetics and disease, lies hidden within journal articles, research papers, clinical trial data, FDA websites, and even graphical data.

But extracting information from even less structured data such as Twitter feeds is a very different and sometimes more difficult knowledge extraction problem. The objective is the same; assimilating unstructured data, giving it some robust analysis, and offering the extracted knowledge across a collaborative network.

Just think of the fertile ground all this opens for startups! If you’re looking for that ‘million dollar idea’ to build a plan around, here is your chance. But don’t wait too long, because the din for Web 3.0 is getting louder and louder. Catch the wave soon or it will pass you by!

Marty Zwilling

Eight Tips To Successfully Bootstrap Your Business

When someone asks me for the best way to fund a startup, I always say bootstrap it, meaning fund it yourself and grow organically. Bootstrapping avoids all the cost, pain, and distractions of finding angels or VCs, and allows you to keep control and all your hard-earned equity for yourself.

Last year I interviewed a serial entrepreneur, Rich Christiansen, who has done almost 30 businesses wholly by bootstrapping. He published a book with Ron Porter on the subject, titled “Bootstrap Business”, that provides a wealth of practical examples and advice on this subject.

The essence of his approach is to dedicate yourself to becoming a frugal minimalist in everything you do. I like his approach, and have extracted some tips from his book and other sources on how to do it:

1. Use a virtual office. Rent is one of the biggest expenses for any business. If you can, start your business in your home office, basement or garage (Bill Gates, Steve Jobs, and many other legends used this approach).

2. Think minimum spending. Spend the absolute minimum for what you need (equipment, software, and services) to keep your business running. Don't justify over-spending initially with "long-run" thinking. If you do, there probably won't ever be a long run!

3. Reinvest gross profit. Most startup founders already do this, rather than take a salary, to improve their offering. Take little to no net profit. Simply take enough to live on, but not to the point of your detriment.

4. Act big, behave small. Create the illusion of ‘big’ without the large building and large staff. Use voicemail, a world-class website, and personal customer service, with small expenses, to beat your big competitors.

5. Do it yourself. Network big to get connections and ideas, but do the work yourself. Every outside hire increases your cost and risk. Hire experts, not help. Low paid help isn’t cheaper if it takes them twice as long to do the job, or they do the job wrong.

6. Don’t plan for failure. Planning for failure almost invariably leads to failure, or at least has a way of undermining your resolve. The tough times are what separate the survivors from the many strewn casualties lying alongside the startup highway.

7. Creative marketing. One of the keys to keeping start-up costs low is to find creative and affordable ways of doing what you need to get done, rather than just spending cash. All you need is a blog, Twitter, email, some business card stock, and a little creativity.

8. Don’t think about the exit. As soon as you bring in investors, they force you to plan for an exit (merger or sale) in three to five years. It’s critical to them, since that’s the only way they can realize a return on investment, but it limits your options for growth and change.

Sometimes the tiniest details will throw your startup company into disaster. Understanding your business totally will give you much better operational control. In most cases there is a direct correlation between the quality of your decisions and the size of your revenue stream. For minimum risk, you must understand fully this cause-and-effect correlation.

In summary, watch your costs, trust your gut, and drive forward with all the passion in your dream. The growth may be slower with bootstrapping, but it’s all yours.

Remember, the goal is to keep venture capitalists or any investors from sinking their teeth into your business. When you let them on board, you lose control of your destiny. Isn’t this contrary to why you signed up to be an entrepreneur in the first place?

Marty Zwilling

Publish Your Website Or Customers Won’t Find You

These days, if your startup does not have an Internet web site up and running, you are not ready for business or potential investors. Customers go there to check on the details of your offerings, investors look there to check out your management and sales approach, partners go there to see how they might fit, and suppliers expect to find contact information.

There is absolutely no doubt that the Internet is the answer to the small businessman's prayer. Yet I was amazed to read a while back on the Selling To Small Businesses website that 51% of small businesses still have no website at all. These are the competitors you can beat!

In fact, you need to have at least a prototype web site published several weeks before you expect anyone to find yours, since it takes that amount of time for the web search engine “spiders” to find you and index your content. I still remember my disappointment the first time I published my website, did an immediate Google search on the name, and it said my company didn’t exist.

There are many practical reasons for going to work early on your web site. Here are a few:

1. Register domain name and set up hosting. I’ve said many times that the Internet domain name should be reserved at the same time you incorporate your company name – they need to be the same, or highly related. Yet I still hear stories of companies being well down the road on products and collateral with a given name, only to find out that everything has to be changed because of a domain name conflict or availability problem.

2. Websites are a big job and take time. I’ve also known startups who have worked for months on the infrastructure of their business – front office, manufacturing, product design, marketing, personnel, and sales – then started work on a web site in parallel with their “grand opening.” Two months later they still didn’t have a web site, and didn’t have a customer. You should allow three months and at least $10,000 for the design, building, and rollout of your first site, unless you can build it yourself.

3. Finalizing the web site validates your product plan and sales strategy. Many founders find that building the web site forced them to commit on the product design, set final pricing, define ordering and delivery procedures, and actually schedule and staff the marketing events that they had in mind.

4. Viral marketing needs a website. Everyone knows that word-of-mouth advertising is an effective and important part of any small business. But word-of-mouth and viral marketing doesn’t work without a web site. On the other hand, don’t assume that viral marketing is the only marketing you will need.

5. The website can be a source of revenue. If your business and product are as attractive as you believe, the traffic to your web site will build quickly. Now you should monetize that aspect of your business through the use of Google AdSense to display ads for related products and businesses, and get paid for the “click-throughs.”

6. Your web site will promote your business 24 hours a day, 7 days a week. Like you probably do, many people search for products and services on the weekends and in the evening. They are busy business people and very often this is the best time for them to concentrate on researching a new product or service. As a business owner, there is nothing more satisfying than having several orders and email inquiries waiting for you when you get up in the morning!

For the first time you have at your disposal the whole world market for whatever product or service you happen to provide. Building the right website should drive the rest of your business, not be an afterthought. Don’t let yours be another startup that can’t be found.

Marty Zwilling

Six Tips for Turning Business Ideas Into Action

Successful startups are all about turning ideas into action. These actions must be the hard part, since entrepreneurs always seem to come to me with ideas, and ask me for help on the actions. That has always seemed strange to me, since the magic is supposed to be in the ideas, and the actions are the same for every business.

In fact, the actions required to start and run a business are well documented, the subject of many books, and taught in college courses across the land. As confirmed by a recent book on this subject by John Spence, Awesomely Simple, turning business ideas into action consists of six essential strategies:

• Build a vivid vision. Having a clear, vivid, and compelling vision in your head is without question an essential component in building a successful company. But that’s not good enough. The vision has to be documented and communicated in a way that makes it vivid to every member of your team, your customers, and your investors.

• Team with the best people. The best people are highly talented and motivated individuals who are also masters of collaboration. The future of your startup is directly tied to the quality of talent you can attract and keep. You must create a winning culture that people love.

• Practice robust communication. Open, honest, frank, and courageous communication, both inside and outside the organization, is critical. The key skills can be learned, and include deep listening, logic versus emotion, and reading body language. According to Spence, this is the biggest problem he has to deal with in client organizations worldwide.

• Cultivate a sense of urgency. Get things done. A fast, agile, adaptable organization makes the important things happen now. Urgency is allergic to bureaucracy. Reward fast action. You set the model for your startup. You become what you focus on and become like the people you spend time with.

• Enforce disciplined execution. Build a performance-oriented culture that demands quality in every operation, encourages continuous innovation, and refuses to tolerate mediocrity. Most organizations execute only 10 to 15 percent of their major goals. Do a periodic effectiveness audit to check your operation. Then fix it.

• Show extreme customer focus. Put feedback mechanisms in place to know that you are consistently delivering what customers truly value. Attitude and listening are the keys. Superior customer focus can drive as much as an 85 to 104 percent increase in your profitability.

It should be pretty easy to see the interdependence and synergy among the six principles, each building on the next, all the various elements working together to create a highly successful business. But you don’t have to go out and address all six principles right now. Pick one that will create leverage immediately, and begin with it.

Spence defines three simple watchwords that will lead to business excellence – focus, discipline, and action. If you are missing any of these, the outcome will most certainly be mediocre. Once you start accepting mediocrity, you become a magnet for mediocrity.

Your great ideas deserve more than mediocre actions. Simple actions done in an outstanding fashion are far more effective than complex and time consuming actions done poorly (thrashing). Also, don’t be fooled into thinking that “simple” means “easy to implement”. Start now to turn your innovative ideas into action. Every entrepreneur loves a challenge.

Marty Zwilling

You Don’t Need Delaware to Start Your Company

It used to be true that “everyone” incorporated in Delaware due to its more favorable terms, but many of these terms simply don’t apply to startups, or the differences don’t exist anymore. Most business professionals now recommend that your first choice should be your home state, or the state where your startup resides.

I live in Arizona, so I’ll use that state as an example. If your home state is Arizona, and you plan to do business there, following is a list of five key advantages of incorporating your business in Arizona:

• Incorporation fees are low.
• The process is simple, including the convenience of geographical proximity.
• Local attorneys, if required, are more familiar with Arizona laws.
• Your startup automatically gets an intrastate securities law exemption.
• No need to register as a "foreign" corporation in the state of operation.

There are still business considerations which might override low cost and simplicity. For example, if your business is likely to get venture capital soon, have a large number of shareholders, or you have a high probability of going public, it might still be a good idea to incorporate in Delaware or Nevada due to these two states more size-friendly laws. The same applies if you are a foreign startup which needs to incorporate in the US to operate with American customers.

For the rest of us, there are distinct advantages to staying close to home. Let’s take a closer look at some of these advantages:

1. Arizona incorporation fees are low. Filing fees vary from state to state, but will fall anywhere from $50 in Mississippi to $410 in Nevada, including administration fees. Arizona is close to the bottom, with statutory fees of only $60. Even if you choose to add the expedite fee of $35, and consider another $100 for publication requirements, the costs to incorporate in Arizona are very reasonable.

2. The process is simple, including the convenience of geographical proximity. To incorporate a corporation in Arizona requires that you file Articles of Incorporation with the Arizona Corporation Commission, publish the incorporation filing in a newspaper of general circulation three times, and submit an affidavit of publication back to the Commission. Visit their offices in Phoenix or Tucson for personal service.

3. Local attorneys, if required, are more familiar with Arizona laws. If your company needs a complex structure, organizationally or financially, the assistance of a local attorney may be required. He will be familiar with any unique Arizona requirements for organizational structures, record keeping, capitalization, debt financing, role of shareholders, distributions, personal liability, and state tax considerations.

4. Your startup automatically gets an intrastate securities law exemption. To qualify for the intrastate offering exemption, a company must be incorporated in the same state where it is offering the securities and carry out a very significant amount of its business in that state. If you incorporate and do business in Arizona, this item alone can save you a significant amount of management time, paperwork, and legal fees.

5. No need to register as a "foreign" corporation in the state of operation. Most states have laws that require entrepreneurs to re-register a Delaware company in the state where it is actually doing business, and unfortunately, re-registration involves more than a few hours of paper work.

But don’t forget that forming the new corporation is just the "tip of the iceberg" with respect to operating a business in the corporate form. Although it is relatively easy and inexpensive to incorporate a business in Arizona, I recommend that you don’t hesitate to consult an Arizona corporate attorney when incorporating for issues that may require legal advice and action.

Now is the time to get started. With a little luck, your new startup should be up and running in 30 to 60 days.

Marty Zwilling

Business Plan Writers - Know Your Audience

By Mahesh Raj Mohan

Writing a business plan can be a difficult process. Even if you know your product/service suite down cold, understand the strengths/weaknesses of the competition, and have built pro forma financials that are sane ... you still have to write the plan for a particular audience. What does that mean? A loan officer, angel investor, and venture capitalist are all looking for different things in a business plan. Your business plan’s writing style should take their preferences into account.

So what writing styles should you use for these very different audiences?

Bank Loan Officer: A business plan for bank lending should reflect a “meat and potatoes” writing style. Clarity is the name of the game. Avoid conversational, first-person writing. (“Hi, I’m writing this plan because ...” “I’ve put a lot of blood, sweat, and tears into this idea ...” “Funding is important to me because ...”) Avoid personal pronouns like, “my, our, we, and us,” in general.

The Executive Summary for a bank lending plan should be a literal summary of the entire business plan, with a paragraph roughly devoted to the product/service, market, industry, marketing, and management. Make the repayment terms as clear as possible at either the beginning or end of the Executive Summary. Keep in mind that a Small Business Administration-backed loan requires certain sections for a business plan. (You can read more about that here.)

Angel Investor: Writing a business plan for angel investors can be tricky. If you’re pitching your plan to Aunt Mary or Uncle Butch, then a conversational tone is probably okay. If you’re pitching to a member of an organized angel group, then a business-like tone is in order. For many angel investors, letting them know “What’s In It For Me” (WIIFM) is critical.

Applying a narrative approach to the problem you’re solving can also be helpful. (“According to XYZ Research, 30,000 people expressed a desire for Widget. However, there are no Widgets available. Until now.”) More stringent analyses of your competitors (through a Porter’s Five Forces model or SWOT analysis) are also helpful. They let an angel investor know why your idea is worth their hard-earned dollars.

Venture Capitalist: As you probably know, venture capitalists are extremely busy individuals. They will likely only read your plan’s Executive Summary – at first. Make it compelling, free of typos, compelling, concise, and, oh yes ... compelling. As with angel investment plans, it’s important to “lead with the need” in the opening paragraphs, stating the problem you are intending to solve. Alternatively, a strong opening that focuses on the “total addressable market” in clear and concise language is also appropriate.

Make sure the venture capitalist understands you’ve done your homework, but avoid making grandstanding statements (“The Widget will revolutionize the world.”) The latest market research is crucial – but choose carefully. A report projecting a sector will achieve $70 billion in revenue by 2014 will make you look like an amateur. Focus on your designated market area instead.

Always keep in mind that a business plan is a “living document.” The content and financials within can change as you see fit. Conversely, you may want to keep the fundamentals of the plan, but focus on a different audience. For example, if you decide outside investment is more appropriate for your concept than a bank loan, then the writing style should change accordingly.

A writing style that presents your idea attractively can pay dividends in other ways. Your investor will realize you care about attention to detail. The investor will certainly appreciate the effort you put into creating a professionally-written business plan.

The way your plan is written can give you the edge you need when pitching your dream.

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Today’s guest blog post is by Mahesh Raj Mohan, a freelance writer and editor based in Portland, Oregon. He possesses 15 years of experience as a professional writer. He has written or edited thousands of business plans and served as a business plan consultant for numerous entrepreneurs. You can reach him directly by email or via his website.

Entrepreneurs Can Learn To Enjoy Solving Problems

If you can’t solve problems and enjoy it, you won’t make it as an entrepreneur. By definition, an entrepreneur is the first to undertake a given business, and firsts never happen without problems and people frustrations. The toughest problems are people problems, like personnel issues, but there are tough operational problems as well, such as vendor delays.

The real entrepreneurs I know are good at overcoming both people problems and business obstacles, and get satisfaction from the challenge. Some people think this is a talent that you must be born with, but experts disagree. You can definitely train yourself to be a problem solver, if you haven’t already. It’s a key skill for success in every business role, from accountant to customer support. Here are some basics rules:

1. Practice active listening. Whether it’s a frustrated employee, or a dissatisfied customer, what you first hear is usually someone yelling with emotion or talking so fast the you don’t know what they are talking about. The first thing to do is resist the urge to vocally jump into the fray, and listen attentively without interruption. Often the person will solve their own problem as they are unloading.

2. Promise action but manage expectations. Calmly commit to resolve the problem, but don’t immediately promise any given solution. Let the person know that the situation is not simple, and you need some time to investigate the circumstances and alternatives. Then give an expected time frame for an answer, and move to the next stage.

3. Investigate thoroughly. There are at least two sides to every problem. Don’t assume anything, and gather facts from all relevant parties. If it’s a judgment or fair treatment question, practice your active listening with each party. If a problem requires special expertise, like a tax question, do your homework or call an expert.

4. Provide regular progress updates to all. Status communication is critical, if the resolution time is going to be longer than one day, even if you have given an expected time from longer than one day. This is probably the most important step and probably the most neglected. If they hear nothing, unhappy people get progressively harder to satisfy.

5. Make a timely decision. Meet your committed time frame for a resolution. Schedule enough face-to-face time (not email or text message) to lay out your understanding of the problem, facts you have assembled, options that you considered, and your decision reached, with reasoning behind it. If possible, let the person with the problem chose from alternatives, so you get more “buy-in.” Put the decision in writing to prevent ambiguity.

6. Follow-up. No matter how smooth the resolution, you need to re-confirm the decision with affected parties within hours or days. This reaffirms you commitment to the process, their satisfaction, and avoids any secondary problems. If the problem was a business process, get the process update documented and communicated to all.

It’s critical to train everyone on your team on these principles, if you want an effective business. Your goal in all of this is to be a role model and get respect for you own position, as well as to empower team members to effectively solve problems for you and for your customers directly.

Problems happen, that’s part of life and people usually understand that. They are an everyday part of every business and personal environment. In fact, every business is about solutions to customer problems – no problems, no business.

Entrepreneurs who are great problem solvers within the business are the best prepared to solve their customers’ needs effectively as well. But in both cases, forcing a smile is not an alternative to the techniques described above. Your team and your customers will see right through it.

Marty Zwilling

Seven Actions of a True Role Model Entrepreneur

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

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

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

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

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

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

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

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

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

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

True role models are those who possess the qualities that we would like to have, and those who have affected us in a way that makes us want to be better people. They help us to advocate for ourselves and take a leadership position on the issues that we believe in.

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

Marty Zwilling

Ten Key Elements Make a Startup a Risky Business

You have probably heard plenty of times that being an entrepreneur is a risky business, and investors talk all the time about reducing the risk. Yet everyone seems to have their own view of key risk sources for startups, and I’m no exception. I don’t agree, for example, that the first priority is to avoid startups with a high attrition rate, like trendy restaurants and entertainment.

Here is my own priority list of key risk sources that every entrepreneur and every investor should evaluate and minimize in starting a business:

1. Team experience and depth risk. Here I’m talking about both the experience and track record of the founders in starting a business, as well as their experience and knowledge of the business domain. Like most professionals, when I get a business plan, I flip first to the founders section to see if it is a balanced team who has been there and done that.

2. Market and opportunity risk. There is always less risk with a well-defined problem in a large and growing market. All the people in China is a large and growing market, but all the people with cancer is much more well-defined. It’s hard to make money in a shrinking market, or with a solution that is “nice to have” versus painfully needed.

3. Competitive risk. Think seriously about the number and clout of your competitors. Having none is a red flag (may mean no market), but having more than a couple of large ones may mean this is a crowded space. Even in an open space, you need intellectual property, like patents, to keep potential competitors from overrunning you.

4. Financial risk. Very few businesses can be started without money. You as the founder will be expected to put your own “skin in the game.” The business plan should be realistic about how much cash will be required to break-even, and how big the return will be for investors in the first five-year timeframe.

5. Market entry strategy risk. The selection of an inappropriate pricing, marketing, or distribution strategy is a large potential risk. For example, many new social websites proclaim that they will offer a free service, and live on ad revenues (not likely in the first year without a huge marketing investment).

6. Political and economic risk. Sometimes founders are just in the wrong place at the wrong time. Recessions are a tough time to sell luxury goods. Under-developed countries may have a strong need for your product, but are often unstable and dangerous. Four specifics include tax rates, tariffs, expropriation of assets, and repatriation of profits.

7. Technology risk. New technologies, especially those characterized as “paradigm shifts” or “disruptive” may have long and costly acceptance cycles, or may run into unpredictable performance or manufacturing problems. Medical technologies have costly legal testing requirements, approval processes, and insurance validation.

8. Businesses with high attrition rate risk. Certain business sectors have historical high failure rates and are routinely avoided by investors and many founders. These include food service, retail, consulting, work at home, and telemarketing. On the Internet, I would add new social networking sites, and new matchmaking sites.

9. Operational risk. Some businesses require huge support or administrative infrastructures. For example, vehicle fuel improvements require service stations and maintenance shops nationwide, before they are viable. Even small operations can have breakdowns of specialized equipment and complex support processes.

10. Environmental risk. A nuclear reactor built on an earthquake fault line is a huge risk. Evaluate your business and location for sensitivity to floods, hurricanes, and catastrophic pollution problems, like the oil spill in the Gulf of Mexico.

The biggest risk of all is starting a company, any company, for the wrong reasons. See my recent related article “Ten of the Worst Reasons for Starting a Business” for a good start in this category. If your startup is clean on both of these lists, you will most likely build a successful business, get the funding you need, and have fun at the same time. What more could a budding entrepreneur like Tom Cruise want?

Marty Zwilling

Changes are Inevitable, But Don’t Lose Your Focus

By Ernst Gemassmer

As an entrepreneur, you know the world changes constantly, and you know the value of being able to adapt quickly. But changes to your startup need to be done for cause, well thought out, and communicated effectively to all impacted parties. Don’t lose your focus, or allow your operation to descend into chaos.

Here are a few principles that I recommend to guide you in the change process, and keep you on track and focused:

• Customers and competition must be the driving force. Too many founders make costly changes to their product and operation based on random comments from friends, family, and potential investors. Stay focused on solving a specific customer problem, and don’t get whiplashed by the whims of informal advisors.

• Listen to the team, but drive the vision yourself. Your challenge is to be able to separate the ideas that hone your vision from those that redirect it. Of course, all ideas need to be evaluated for relevance to the plan, cost to implement, and impact on the overall potential. There is a big difference between a plan adjustment and a new vision.

• Carefully evaluate and measure impact before adopting changes. Use data to evaluate alternatives whenever possible, rather than gut-level decisions, emotions, and personal agendas. Good questions you should ask yourself would include:

  1)  What amount of time, money and human resources are needed to implement the additions/modifications?

  2)  Are the changes essential from a competitive point of view?

  3)  What is the financial effect of not carrying out these additions/modifications?

  4)  What is the overall benefit if the additions/modifications are made?

• Change is not always about product and features. The primary issues are often not building the right product, but getting the attention of the right customers. Focus is critical here. By focusing on the needs of a small subset of the potential market and specific customers, change decisions become much easier.

• If investors funded your plan, include them in change discussions. All outside investors need to be included in plan change discussions. Remember that they funded a specific plan, with specific financial projections, and specific milestones. Changes to these without consultation will jeopardize your relationship and future funding.

• Obtain Board approval before implementing changes. Do your assessment of alternatives, but don’t act without approval by the Board of Directors. In addition, you should ensure that the entire senior management team is fully supporting your recommendations. This may seem like a burden, but it’s really a good reality check.

• Closely monitor plan execution. You and funding partners have a vested interest in the success of your startup. In most cases, the financial commitment is not allocated in a single amount, but rather in tranches based on meeting specific quantifiable milestones. For your own decision making, and to maintain an open and constructive relationship with funding partners, there should be no surprises.

Too many startups try to enter the market with an end-to-end product, which is the large company approach, and obviously ideal from some customers perspective. But startups should focus on innovation and breakthrough offerings, not end-to-end solutions. After some initial traction, you can always add features. Change should not mean adding more, but tuning the entry product and the entry process, with the full support of your team and your investors. Keep your eye on the target.

Today’s article is presented by one of the founders of our Startup Professionals team, Ernst H. Gemassmer. He resides on the West Coast, and has long helped entrepreneurs there, as well as providing turn-around assistance as interim CEO, and International coaching. You can contact him directly at ernst@startupprofessionals.com .

Startups Wait For the ‘Super Angels’ to Descend

It is no secret that the world of venture capital (VCs) has been turned upside down by the recession, and the many other changes in the marketplace. I see now emerging a new wave of investors, popularly known as “super angels,” micro-VCs, or “super-seed” investors. Every early-stage startup should explore this new funding alternative.

Business Week ran a more thorough analysis of this movement a while back, which I am summarizing here. I conclude that the genesis of this trend seems to come from several forces, including the following:

1. Less investment capital available due to the recession. Venture capital dispensed quarterly to startups continues to decline, down to about $3 billion in the first quarter, which is the lowest level since 1997. Due to the economy as well, traditional individual angel investors haven’t been able to fill the gap.

2. New “up-and-comer” VCs focus on early-stage companies. VCs are finding that they don’t need the “large” funds of $100M to $500M to support a portfolio, if they focus on early-stage startups. It’s higher risk, but higher return, to pick the big winners early, before angels have set unreasonable valuations and restrictive terms.

3. Technology costs are plummeting, meaning you can do more with less. Twenty years ago, it cost $5 million to really launch a high-tech startup, when the same thing can be done today for $500 thousand. So, in effect, VCs need to come in at what was formerly the angel stage to grab the gems and hold them.

4. Many old-line VC firms have grown too big and unwieldy. More are realizing that they have forgotten how to build innovative companies, so they are going back to their roots, when firms were smaller and more nimble. They can plant more seeds, and place less dependency on the big win.

5. Being “lifecycle investment partners” has a downside. As venture funds grew bigger during the dotcom bubble, and sized themselves to invest in every round of selected startups, they found it was very hard to stop investing in the underperforming companies. That model doesn’t seem to work any more.

6. Great companies are made, not born. Conventional wisdom is changing from startups being born a winner (execution doesn’t matter), to being made a winner (more chances and more help early on). This means smaller amounts given to more entrepreneurs who get a chance to prove that they can build great businesses.

Of course there a couple of potential down sides to this movement:

• As more startups are funded, without the big VCs on the other end, more companies will be looking for growth dollars and may languish trying to differentiate themselves in a crowded, but slow spending, consumer marketplace.

• More sources of funding for early-stage startups may drive up valuations on these deals, which will lower the returns for the angels and super-angels willing to do these deals. That could cause this bubble to burst and hurt everyone.

I applaud the direction of investors who want to re-invigorate venture capital by taking it back to the real entrepreneur who needs help getting his venture off the ground. Too many founders today face the conundrum that they need capital to get started, and even angels defer until after you have your product built, business model proven, and a real revenue stream.

Examples of some leaders in this super-angel space include First Round Capital, Baseline Venture, Maples Investments, and Felicis Ventures. Check them out, and find others, so maybe you too can be super-blessed by a super-angel.

Marty Zwilling

Startup Competitors Watch From Five Directions

One of the key sections of any business plan is the analysis of the competition. I especially love the ones that start and end by saying “We don’t have any competitors.” Investors take that to mean either 1) there is no market for your product, or 2) you don’t understand the concept of business and competition. Either way you lose.

Way back in 1979, Michael E. Porter proposed a Five Forces framework for analyzing the competitive environment which I think still makes a lot of sense today. Every startup should size his product or service in the context of these five forces:

1. Intensity of competitive rivalry. This is where most current business plan analyses focus today. These plans just list a few key competitors out there now, compare feature richness, quality considerations, and pricing. This is an important first step, but it’s only the beginning.

2. Threat of new competitors entry. Startups that target profitable and growing markets with high returns should realize that these will draw many new entrants. It will certainly also decrease profitability over time, as well as test your sustainable competitive advantage. That leads to switching costs, sunk costs, brand equity, and a host of other considerations, commonly called “barriers to entry.”

3. Utility of alternative solutions. You are never the only alternative, hopefully just the best, in price, utility, and satisfaction. If you new vehicle costs too much, people take the bus. At some level of function, availability, and price performance, customers jump ship away from you. These elements are referred to as “barriers to exit.”

4. Bargaining power of customers. This is the degree to which customers can put your company under pressure, or leverage prices, delivery, features, and quality (market of outputs). A key is your differential advantage from alternatives. Small differentials and more competitors give customers higher leverage.

5. Bargaining power of suppliers. Suppliers of raw materials, components, labor, and services to you can be a source of power over your ability to compete (market of inputs). You need to identify substitute inputs, supplier concentrations, and employee solidarity (labor unions), which can limit you or give you the advantage.

A few years ago, Andrew Grove is credited with postulating a sixth force in the marketplace – government, pressure groups, and the public. This force adds the concept of ‘complementors,’ and has led to the growth of partners and strategic alliances to balance the competitive environment.

These forces make up the micro environment of a company, which affect its ability to serve its customers and make a profit. A change in any of them should be your cue to re-assess the marketplace. All startups need to remember their core competences, business model, or network, which are the factors that allow them to maintain a competitive advantage.

I always remind startups that this section of the business plan should not be a negative one. Don’t merely list competitors, with their advantages and head start. It’s your opportunity to highlight and emphasize your relative advantages, whether they be price, features, bargaining power, or any of the six forces outlined above.

On the other hand, there is more at stake for startups than enterprises because they do not have the same financial capital of their bigger rivals. But with a clear understanding of where the power lies, you can take advantage of a position of strength, improve a situation of weakness, and avoid stepping into a pack of wolves with no protection. It’s a painful end.

Marty Zwilling

Nine Principles of Leadership for Entrepreneurs

Creating and building a business is not a one-man show. It requires a team effort, or at least the ability to build trust and confidence among key players, and effectively communicate with partners, team members, investors, vendors, and customers. These actions are the hallmark of an effective leader.

Behind the actions are a set of principles and characteristics that entrepreneurial leaders, like Bill Gates and Steve Jobs, seem to have in common. Look for these and nurture them in your own context to improve the odds of success for your own startup:

1. Clarity of vision and expectations. You must be able and willing to communicate to everyone your vision, goals, and objectives. Just as importantly, you have to be absolutely clear about who you are, what you stand for, and what you expect from everyone around you. People won’t follow you if they are in the dark or confused.

2. Willingness to make decisions. It is often said that making any decision is better than making no decision. Even better than “any decision” is a good decision made quickly. Business decisions always involve risk, at times a great deal of it. Smart entrepreneurs always balance the risk with facts, when they have them, rather than their gut.

3. Experience and knowledge in your business area. Effective leaders set a personal standard of competence for every person and function in the startup. It must be clear that you have the knowledge, insight, and skill to make your new company better than your very best competitor.

4. Commitment and conviction for the venture. This commitment must be passionate enough to motivate and inspire people to do their best work, and put their heart into the effort. Behind the passion must be a business model that makes sense in today’s world, and a determination to keep going despite setbacks.

5. Open to new ideas and creativity. In business, this means spending time and resources on new ideas, as well as encouraging people to find faster, better, cheaper, and easier ways to produce results, beat competition, and improve customer service. Be a role model and guide others to excel.

6. Courage to acknowledge and attack constraints. An effective leader is willing and able to allocate resources to remove obstacles to the success of the startup, as well as removing constraints on individuals on the team. It is believing that where there is the will, there will be a way.

7. Reward continuous learning. You have to encourage everyone to learn and grow as a normal and natural part of business. That means no punishment for failures, and positive opportunities for training and advancement. Personally, it means upgrading your own skills, listening, and reading about new developments and approaches.

8. Self-discipline for consistency and reliability. An effective leader is totally predictable, calm, positive, and confident, even under pressure. People like to follow someone when they don’t have to “walk on eggshells” to avoid angry outbursts, or assume daily changes in direction.

9. Accept responsibility for all actions. Everyone and every company makes mistakes. Good entrepreneurs don’t want to be seen as perfect, and they have to be seen as willing to accept the fact that “the buck stops here.” No excuses, or putting the blame on the economy, competitors, or team members.

The good news is that all of these principles of leadership are learnable. The bad news is that it’s not easy. Don’t assume that success as an entrepreneur is only about great presentations, killing competitors, or having insanely great ideas. It’s really more about leadership, understanding the needs of your prospective clients, and communicating your solutions with clarity.

Marty Zwilling

The Need For Software Localization Still Prevails

By Ernst Gemassmer

With the pervasiveness of the Internet, the world is smaller. The good news is that the reach of your new software application is instantly worldwide, and the bad news is that most people still prefer to work in their own native language. That means that you need to face the issues of translation and localization sooner rather than later.

Despite all the hype and free tools, there still is not ‘an app for that.’ Whether your new software is ‘in the cloud,’ an online download, or distributed on a CD through various direct and indirect distribution channels, the process of localization is still a time consuming, manually intensive, and expensive effort.

In case you think that American English is sufficient, remember that the command of the English language differs widely from country to country. Irrespective of fluency in English, most people still prefer to work in their own native language. Thus, localization is not only desirable, but essential to gain and keep market share in specific countries.

In my experience, there are many considerations which are critical to the productivity and success of this effort. These include the following:

1. Plan for international from the beginning. Even though it usually makes sense from a marketing perspective for a startup to stage software rollout to various locales, it makes no sense to design and implement your application that way. All implementation should be done in Unicode, with user interface, currency, date formats, and database considerations for all the languages required.

2. Begin parallel translation early. It may seem less expensive to wait until all your screen layouts, online help, and written manuals are ‘final’ before arranging for translation, but the reality is just the opposite. Late translation will uncover design issues that are expensive to fix, and the inherent time delays and testing can set back delivery up to six months. Even though this process might require some re-work, a sizeable reduction in localization time can be expected. Note that this will require close and trusted cooperation between engineering/development and each localization group.

3. Optimize the costs of localization. The cost of localization can vary widely, depending on the approach taken. Assuming that your company has an internal localization coordinator, who has personal contacts with localization firms in different countries, the direct cost of localizing into a single language could still be up to $50,000. However, if you utilize an outside firm to handle the entire process, the cost will be significantly higher. My advice is to select and work directly with a localization group in each selected country, avoiding middlemen.

4. Prior experience is critical. For a startup, find an international partner, or hire a new team member who has don it before. As your company grows, this person should reside at corporate headquarters and report solid line to the head of international operations. In addition this person should report, dotted line, to product development or engineering. Ensure that the localization person is a good and patient communicator and is fully accepted by the engineering/development group.

5. Measure the return versus the investment. There are literally hundreds of interesting locales in the world for every application, but not every one is a real market opportunity. Do your homework on potential, and then track the results, both with respect to incremental sales, as well as the costs of localization and maintenance.

There are many other pitfalls of poor localization practices, including high maintenance costs and costly delays in reaching attractive markets. Also, you must remember that localization costs are up-front costs, which must be fully funded before any incremental sales revenues.

I have personally implemented the above recommendations repeatedly. The most successful project resulted in release of localized products for all the major languages in Europe a few years ago within four weeks of US product introductions.

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Today’s article is presented by one of the founders of our Startup Professionals team, Ernst H. Gemassmer. He resides on the West Coast, and has long helped entrepreneurs there, as well as providing turn-around assistance as interim CEO, and International coaching. You can contact him directly at ernst@startupprofessionals.com .

Don Estridge, IBM PC Father, Startup Role Model

My introduction to startups really came when I first worked in IBM with Philip Donald Estridge back in 1981. Known as Don Estridge, he led development of the original IBM Personal Computer, and thus is known as "father of the IBM PC". He’s gone now, but I still remember him fondly.

He and Bill Lowe somehow managed to convince then CEO Frank Cary to give them a dozen engineers, a small budget, and a few months, to set up a small skunk-works called Entry Level Systems in Boca Raton, Florida, to develop a low-cost personal computer (code name “Acorn”). This was to compete against increasingly popular offerings from the likes of Apple Computer, Commodore International, and Radio Shack.

He was an engineer, so his first act was to buy one of each of these computers, and disassemble them in his office (a practice frowned on in IBM at the time – due to lawsuits). He then brought in the engineers and challenged them to do better in each of the functional areas, or find a cheaper solution with parts off the shelf. That was pure Don Estridge – always challenging the team to push beyond their comfort zone.

IBM had traditionally done all its own vertical technology development, so this outside vendor thing broke all the rules. He went to vendors for common hardware parts, went to outside software developers for the operating system and application software, and acted as an independent business unit. This caused great consternation within IBM at the time, but ultimately set the standard against which all IBM technology had to compete.

These changes enabled his team to develop and announce the IBM PC in 12 months -- at that time faster than any other hardware product in IBM's history. Estridge also then published the specifications of the IBM PC, allowing a booming third-party aftermarket hardware business to take advantage of the machine's expansion card slots.

The startup process and the importance of founders with a vision and energy hasn’t changed much in the last 30 years, but the technology has improved by orders of magnitude. Here are a few PC-related examples:

• CPU speed was 4.77 mHz, now 3.0 GHz dual processors, a factor of at least 1000x
• Minimum memory shipped increased from 16K to 2G, a factor of 125000x
• Disk space was a floppy disk holding 160K, now hard disk of 500GB, a factor of 3000x
• Telecommunications speed of 300 bps to 1.6 Mbps, a factor of 5000x

As with many successful entrepreneurs, Don Estridge was a humble man, who was actually embarrassed by the size of his office, as his stature and rank grew in IBM. It is said that Steve Jobs offered Estridge a multi-million dollar job as president of Apple Computers, which he turned down. He had an excellent relationship with Bill Gates, who probably extended him a similar opportunity, but Don was too proud of his IBM heritage.

His leadership dramatically changed both IBM and the computer industry, resulting in a vast increase in the number of personal computers sold and bought, thus creating an entire industry of hardware manufacturers of IBM PCs. He immediately was asked by top executives to apply that leadership to the mainstream business of IBM mainframes.

Unfortunately, before very long he was killed in the tragic crash of Delta 191 at DFW airport (wind shear), along with his wife, Mary Ann, on August 2, 1985, so we will never know what additional legacies he might have left.

But like every true leader, he left a great legacy with everyone he worked with, a conviction that anything is possible in business if you believe in it and work hard. He was a role model we can all aspire to, and rare true entrepreneur.

Marty Zwilling

Nine Ways to Work Less and Do More In Your Startup

The universal challenge of every startup founder is to get everything done that needs to get done, and still have a life. Even outside of business, everyone wants to accomplish more, while working less. I’ve been a student of these techniques for some time, but recently I saw a great summary that seems to pull all the key principles together.

Stever Robbins, known on the Internet as the Get-It-Done Guy, just published his book “9 Steps to Work Less and Do More,” which outlines his strategies. These are not aimed specifically at entrepreneurs, but certainly can be applied there as follows:

1. Living on purpose. Figure out what’s really important to you as an entrepreneur. For most, it’s following a passion to show customers your better solution. Live your lifestyle, do what you love, and identify your top priorities. Then you will get things done, and it won’t even seem like work.

2. Stop procrastinating. Procrastination is a killer when it comes to being effective. One of the best ways to stop procrastinating is to break things down into small chunks, using tiny steps to move forward. Break time into pieces. When there’s an end in sight, it’s a lot easier to get down to business.

3. Conquer technology. Cellphones, laptops, and other electronic devices are supposed to give users additional freedom, but far too often, they create time traps. Separate yourself from technology on a regular schedule to not allow a machine’s interruptions to set your day’s agenda.

4. Beat distractions to cultivate focus. You need to set boundaries and say “no”; to stop multitasking; and to find ways to group similar tasks or similar contents. Don’t forget to delegate to other team members, and don’t be tempted by the current “crisis” to postpone the important tasks of strategy decisions and monitoring the progress of the business.

5. Stay organized. Many people confuse ‘organized’ with ‘neat.’ In fact, organized means a place for everything and everything in its place. When you stumble over something that doesn’t have a place, either throw it away or make a place for it. If you don’t have any more room, throw something away – don’t rent a storage unit.

6. Stop wasting time. Work is whatever you need to do that most matches your business goals as they are today. Use the 80/20 Rule to pick and then complete those taks. Stop trying to do things perfectly. “Good enough” is the antidote to perfectionism. Make faster decisions by limiting the options you consider.

7. Optimize. Stop doing what isn’t working so you’ll have the time to optimize the rest of what you do. Some of the best ways to optimize include using team feedback to identify blind spots that could be limiting effectiveness; recognizing when it’s time to call in an expert to get the job done; and listening to your own advice.

8. Build stronger relationships. Build a network of contacts to allow you to harness the power of others’ strengths. Superficial relationships don’t help. Giving is the best and quickest way to strengthen a relationship. Conflict takes energy to sustain, so work to prevent conflicts from arising, and work to end conflicts quickly that do arise.

9. Leverage. Use technology thoughtfully to automate things that take a lot of time, thus gaining leverage. Reuse things rather than re-inventing them. The most valuable computer function in business is “cut and paste.” These days, on the Internet you can find samples of every document and contract you will ever need, so use them.

With each of these steps, you will reclaim more control of your business and your life. You will find yourself honing in on the things that actually move the startup forward and make you happy, and learning the skills you need to resist the rest. You too can be a get-it-done guy.

Marty Zwilling