A Virtual Team is Not Another Name for Outsourcing

Almost every startup is a virtual team these days, since most don’t start out with dedicated office space, and some or all members of the team work part-time or out of their own home. It’s a small world, so these team members may not even be in the same town, or the same country. Outsourcing is just another extension of the virtual team concept to people you don’t even know.

Working effectively with a virtual team of any sort has many challenges. How do entrepreneurs establish and maintain rapport with people they rarely see, and team members who have never met? How do they keep track of what everyone is doing and assure effective communication between all team members?

Experts on this subject, including Yael Zofi, in her latest book, “A Manager’s Guide to Virtual Teams,” has identified eight key characteristics of high-performing virtual teams, which every startup founder should understand and enable:

1. Members exhibit a global mindset – they look outward, not inward. Effective virtual leaders widen their focus from the local to the global, which implicitly creates an environment of respect. Respect engenders buy-in, without which members can’t take ownership of work product and work toward a common goal.

2. Members share responsibility for achieving the mission. High performing teams have a sense of purpose where members internalize their piece of the mission, thereby transcending the isolation that defines working in a virtual environment. Team members develop an understanding about their mutual dependence to achieve objectives.

3. A culture of openness facilitates trust and authenticity. Effective founders work to create and maintain an environment of team trust to defuse miscommunications. They focus on behaviors, not on personalities, because they know this engenders trust. Then they “say what they mean and mean what they say” to model authenticity.

4. Members engage in meaningful communication with each other. High-performing virtual teams establish and maintain standards on frequency and modes of communication, and hold members accountable for acting accordingly. They also regularly use synchronous communication at critical points to speak with each other.

5. An easy flow of information exists using various forms of technology. Everyone must have access to appropriate technology to enable reliable, current exchanges of information. The amount of “pushed” information (unfiltered e-mails and phone calls) to team members is lower than “pulled” data (e-bulletin boards and intranets).

6. A conflict management mechanism. Conflicts are inevitable, and when even simple miscommunications don’t get acknowledged and fixed, trust gets eroded. The founder or leader must actively engage team members early, and follow up to ensure appropriate resolution. When this happens, lengthy energy-draining confrontations are avoided.

7. Work systems produce deliverables within defined constraints. When team members are geographically dispersed, a rigorous effort is required by all team members to coordinate and align components of critical work systems to meet deadlines within time and budgetary constraints.

8. Members have a positive “can do” attitude that spans time and distance. They must all assume their efforts will lead to success. When conflicts and tensions arise, as they inevitably do, members hold these situations within the context of the larger picture and look to quickly find solutions, rather than assign blame.

Technology has made virtual teams an everyday reality for entrepreneurs. Your challenge is to reduce the “virtual distance” between team members to zero, using personal communication, appropriate technology, and clear goals to maintain member satisfaction, collaboration, and innovation. Have you measured the virtual distance to your team members lately?

Marty Zwilling

Savvy Entrepreneurs Adopt More Good Habits

Most of the entrepreneurs I know realize they have some bad habits, like maybe procrastination or not listening well, so they focus on dropping these. New studies indicate that a more productive approach would be adopting new good habits and behaviors that clearly move your business forward, like good time management and implementing customer recommendations.

These two approaches may sound similar, but actually require different skill sets. For example, learning to stop smoking may leave you with a gap to fill, but finding activities that remove your urge to smoke really gets you where you want to be. I recommend the following six techniques for solidifying good habits from “The Compound Effect,” by successful entrepreneur and writer Darren Hardy:

1. Set yourself up to succeed. Any new habit has to work inside your life and lifestyle. If you want personal healthy think time at a gym, don’t find one that is thirty miles away, because you won’t go. For better time management, tell everyone that you will be closing the door to you office during specific times of the day, and ask for their support.

2. Think addition, not subtraction. Instead of focusing on what you have to “sacrifice,” think of what you can “add in” to improve your business effectiveness. For example, most founders find that adding good customer discussions has a more satisfying payoff than just eliminating expensive marketing consultants.

3. Go for a public display of accountability. Put your commitments of a new good habit, like rewarding good performance, on public display by announcing a recognition event to be held each week in the office. Now you will be motivated to follow through, and the whole team will give you the positive feedback you need to keep it going.

4. Find a success partner. There are few things as powerful as two people locked arm in arm marching toward the same goal. If your bad habit is staying late at the office, link with one or more of your other key executives to retire to the gym at 5 pm sharp three times a week. You will all get out of the office, feel better, and make more decisions.

5. Use both competition and camaraderie. There is nothing like a friendly contest to whet your competitive spirit and immerse yourself in a new habit with a bang. It’s easy in a new business to inject a fun rivalry and a competitive spirit into improving your marketing programs, or improving production cycles.

6. Celebrate each small step of success along the way. All work and no play is a recipe for backsliding. You’ve got to find little rewards to give yourself every week or every day, even something small to acknowledge that you’ve held yourself to a new behavior. Measure results and promise yourself a real pot of gold at the end of the rainbow.

Change is hard. That’s why so many people don’t either give up their bad habits, or adopt new good ones. Successful entrepreneurs are the extra-ordinary ones that make the changes anyway. They just do it, and keep doing it, and the magic of compounding rewards them handsomely.

Another challenge is that your brain is not designed to make you happy. It is programmed to seek out the negative and optimize survival, and is always watching for signs of “lack and attack.” That’s why every entrepreneur spends so much time worrying about failures, lack of customers, and competition. We have to teach our minds to look beyond these, through discipline and being proactive about what we allow in.

But learning and discipline without execution is worthless. In the big picture, the habits you develop and nurture shape your destiny. Little everyday habits will take you either to the life you desire or to disaster by default. Spend more time instilling good ones, and the bad ones will disappear for lack of attention, making you a more savvy and successful entrepreneur.

Marty Zwilling

Innovation is About Execution, Despite the Myths

Most people think innovation is all about ideas, when in fact it is more about delivery, people, and process. Entrepreneurs looking to innovate need to understand the execution challenge if they expect their startup to carve out a profitable niche in the marketplace, and keep innovating to build and maintain a sustainable competitive advantage.

Everyone thinks they know how to make innovation happen, but I can’t find much real research on the subject. At the same time, myths about innovation are commonplace in business. Vijay Govindarajan and Chris Trimble, in their book “The Other Side of Innovation: Solving the Execution Challenge” have done the best recent research I have seen on this subject.

They take you step-by-step through the innovation execution process, in the context the ten most common myths about innovation, which I think makes their approach particularly instructive:

1. Innovation is all about ideas. While it is true that you can’t get started without an idea, the importance of the Big Hunt is vastly overrated. Ideas are only beginnings. Without the necessary focus, discipline, and resources on execution, nothing happens.

2. A great leader never fails at innovation. When in comes to innovation, there is nothing simple about execution. The inherent conflicts between innovation and ongoing operations are simply too fundamental and too powerful for one person to tackle alone.

3. Effective innovation leaders are subversives fighting the system. Effective innovation leaders are not necessarily the biggest risk takers, mavericks, and rebels. The primary virtue of an effective innovation leader is humility. What you want is integration with real world operations, not an undisciplined and chaotic mess.

4. Everyone can be an innovator. Ideation is everyone’s job, as are small improvements in each employee’s direct sphere of responsibility. Yet most team members don’t have the bandwidth or interest to do their existing job, and well as address major innovations.

5. Real innovation happens bottoms-up. Innovation initiatives of any appreciable scale require a formal, intentional resource commitment. That requires the focus and resources from top executives to sustain, even initiate, relevant efforts.

6. Innovation can be embedded inside an established organization. Some forms of innovation can be imbedded, like continuous product improvement, but discontinuous innovation is basically incompatible with ongoing operations.

7. Initiating innovation requires wholesale organizational change. Innovation requires only targeted change. The first principle is to do no harm to existing operations. A common approach that works is to use dedicated teams to structure innovative efforts.

8. Innovation can only happen in skunk works. Innovation should not be isolated from ongoing operations. There must be engagement between the two. Nearly every worthwhile innovation initiative needs to leverage existing assets and capabilities.

9. Innovation is unmanageable chaos. Unfortunately, best practices for generating ideas have almost nothing to do with best practices for moving them forward. Innovation must be closely and carefully managed, during the 99% of the journey that is execution.

10. Only startups can innovate. Luckily for entrepreneurs, many large companies are convinced that they must leave innovation to startups. Yet research suggests that many of the world’s biggest problems can only be solved by large, established corporations.

Everyone agrees that the goal of innovation is positive change, to make someone or something better. Entrepreneurs need it to start, and established companies need it to survive. The front end of innovation, or “ideating” is the energizing and glamorous part. Execution seems like behind-the-scenes dirty work. But without the reality of execution, big ideas go nowhere, even in startups.

Marty Zwilling

Ten Tips on How to Get the Entrepreneur X-Factor

To be successful as an entrepreneur, you don’t have to be a fabulous person, but it helps. Some people, and some entrepreneurs, have that something extra, like Simon Cowell is searching for on the X-Factor, that you can’t quite put your finger on. But the entrepreneurs that have “it” seem to be able to effortlessly get team members, investors, and customers to follow them anywhere.

I just finished a book on this subject, “The Essentials of Fabulous,” by Ellen Lubin-Sherman, who has been tracking fabulous people most of her life, as a writer and journalist. She identifies less than a dozen primary qualities for fabulous people in general, and I have honed and tuned these to ten that apply especially to entrepreneurs, in my experience:

1. Be passionate about life, as well as your business. Entrepreneurs who have passion in business, as well as their life, may drive us all batty, but there is never a dull moment. These moments are always being transformed into options to be explored. They make life interesting and an adventure, and everyone loves an adventure.

2. Be delightfully authentic and honest. Authentic entrepreneurs are destined and determined to have fun, as well as move forward in business. They have an unerring confidence that’s inspiring yet attainable. They savor relationships, and are generous with themselves and their smarts, so they attract a savvy following.

3. Be revered for an amazing positive attitude. Rather than cave when things get tough, optimistic entrepreneurs go analytic, looking for pivots that keep their goals in sight. They are disciplined, upbeat thinkers, but they don’t take themselves too seriously, and know how and when to laugh it off. A negative attitude takes everyone down.

4. Be warm and completely accessible. Warmth comes from your smile, and facial expressions that indicate genuine interest. Investors and partners look for entrepreneurs that will look them straight in the eye when speaking, and give their full and undivided attention while you’re speaking. Everyone looks for “rapport talk” rather than “report talk.”

5. Have impeccable manners and flair. Entrepreneurs who are always looking for opportunities to be gracious and considerate are going to be liked, admired, sought after, and trusted. In business, that means staying connected, showing up on time, with no signs of boredom or preoccupation. It’s not always about you, so dress and talk for them.

6. Be competent and confident. Competent people accomplish more in business because they’re driven by a pronounced sense of purpose. They are willing to put themselves on the line, and have confidently done their homework to know what it takes. They are reliably consistent, and unafraid to ask for help.

7. Able to just “get it.” Entrepreneurs who “get it” are emotionally attuned to peers and customers, so that their gut-level instincts become informed judgments that move the business forward. “With-it”-ness takes work, like reading the right blogs every day, challenging yourself to stay abreast of the latest technology, and social media marketing.

8. Have a big bandwidth. Can you talk, with equal engagement and respect, to your company’s CFO and the guy who pumps your gas? Look for opportunities to praise and nurture the people with diversity. Get comfortable out of your circle of interest and expertise. Go for that black belt in networking.

9. Be vivid virtually. Developing a superior virtual presence requires a mastery of several mediums – phone, email, text messaging, as well as handwritten notes – but the payoff is undeniable. But don’t overuse virtual communication to the exclusion of face-to-face time In all cases, don’t forget your sense of aplomb, mastery of tone, and the spell-checker.

10. Build and use a board of advisors. The right board is a group of individuals who may not know one another, but know you, and know your business domain. Plus, they need to be willing to put their brains and their expertise at your disposal as long as you need it. No entrepreneur is an island, so take the initiative to build and use an advisory board.

Paying attention to all these things is how you become a fabulous entrepreneur, with the X-factor. I’m sorry, but there is no magic, and it doesn’t happen overnight. Of course, it will never happen if you don’t start or don’t believe. But it’s worth the effort, unless you have something better to do?

Marty Zwilling

Try These Ten Startup Work Relationship Strategies

Just because you are an entrepreneur, or work in a startup, you can’t ignore the rules of building and maintaining relationships. Many despise these experiences in corporate environments, and leave for a startup, only to find that they have to be able to navigate a similar minefield there of workplace and business relationships to be successful.

Jan Yager, Ph.D., an author and speaker on this and related subjects, outlines in her latest book “Productive Relationships: 57 Strategies for Building Stronger Business Connections.” From my experience and hers, here are ten top relationship strategies for people in startups:

1. Create a favorable first impression. You only get one chance for a first impression. Don’t miss an opportunity for face-to-face communication, where you can use body language that welcomes relating, estimated at over 50% of all communication. Limit the use of e-mail and texting for early interactions, where you miss the body language.

2. Avoid negative personality types. By recognizing negative personality types, like the control freak, the blameless type, the idea thief, and the entitled, you will have a better chance of not taking his or her behavior personally. Avoid associating with them.

3. Proactively form relationships with positive types. These are the people who will help you to thrive and prosper. They include real mentors, facilitators, visionaries, motivators, and negotiators. Of course, it still pays to keep your eyes open and carry your own weight.

4. Find a way to motivate others to want to get along with you. Understand your own agenda, and figure out the agenda of others, hidden or obvious, to make it a win-win relationship. How can you appeal to others on an emotional level to work together?

5. Reexamine your attitude toward conflict. Some conflict is inevitable. The key is how to deal effectively with it. Recognize points of view, respond to what happened, resolve what needs to be resolved, and reflect on the lessons learned. Then move on.

6. Deal with the “back-off” before it turns antagonistic. Rather than have a confrontation, someone backs off. You can’t make someone want to deal with you, but you can try to increase their motivation to deal with you – like getting together for lunch, or trying to communicate in another way.

7. Benefit from harsh feedback about your work. Receiving criticism is never easy. Try some recovery techniques, like taking a deep breath, give yourself time, and look at the issue from their perspective. Keep your initial response short and sweet and in control.

8. Cope with the “lonely at the top” syndrome. One of the prices that you pay for being a CEO is giving up a lot of the social relationships within the company. There is a line beyond which you cannot go. You cannot compromise what is right for the company just to be liked. Join associations, or rely on your family for support and feedback.

9. Say goodbye, if leaving is the best option. Sometimes it’s better to just move on, rather than endure extended pain. Even if you cannot quit this instant, you can at least start looking for a new job. Be proactive in planning for your next position.

10. Use social networking to improve your work relationships. Savvy workers at all levels are using these sites to develop and strengthen their business relationships as well as to reconnect with previous business connections. Make your own luck by giving and seeking referrals.

Compounding these strategies in today’s startup environment are two divergent concepts: a heightened degree of competitiveness, and a greater emphasis on teamwork. This means you need even more emphasis on effectively engaging others, and learning to deal effectively with potentially negative work relationships.

The startup world of the past, run by a couple of autocrats, no longer works. To succeed in today’s collaborative, customer-driven, networked economy, requires real business relationship efforts by everyone involved. No matter where you are in the spectrum, there is no time like the present to kick it up a notch.

Marty Zwilling

Celebrity Endorsements are Hot For Startups Today

Most startups dream of attracting a celebrity endorsement, and assume that it will take their startup to the stars. There have been some “famous” recent successes in this regard, such as Charlie Sheen using Twitter to promote Internships.com, as well as some failures, including MyFavorites.com using celebrities to promote the books they are reading.

Startups using celebrities is such a hot topic these days that Gary Vaynerchuck, noted author and entrepreneur, has coined a new term “star-ups” for the phenomenon. New books are popping up on the subject of how and when to seek celebrity endorsements, including one I just finished, “Will Work for Shoes,” by Susan J. Ashbrook, who has courted celebrities for twenty years.

She helps you decide if celebrity endorsement is a viable and reasonable alternative for your business, and how do you go about selecting and approaching the right celebrity. Following is a summary of the challenges that Susan and other “experts” have outlined:

1. Finding a match between your offering and a celebrity. That means finding the perfect person for your brand. Their values need to match your brand image, including the perception of quality, educational value, as well as recognition by your target demographic. Be sure the celebrity really believes in your product.

   If you are selling to young consumers, Miley Cyrus or Justin Bieber may be high on your list. For technology products, even well-recognized investors, such as John Doerr or Ron Conway, are seen as celebrities, and startups supported by these players are automatically elevated to a new level of credibility.

2. Funding the relationship. Celebrity endorsements don’t come cheap. Does your marketing budget allow you to roll out the red carpet to meet celebrity lifestyles, including the investment in appearances, videos, and perks? Big fat advance checks and long-term royalties are often the norm.

   On the other hand, maybe you can emulate Priceline.com, whose official spokesperson, William Shatner, agreed to do the spots for free in exchange for stock in the company. The arrangement turned out to be quite profitable for Shatner, who has since made approximately $600 million from Priceline.com, despite the dot.com bust.

3. How to find and connect with the celebrity you want. As with all aspects of business relationships, funding, and partners, nothing beats a pre-existing relationship, or at least a warm introduction. Beyond that, the place to start is with publicists, agents, and other handlers. Major groups include Rogers & Cowan, Baker/Winokur/Ryder, and 42West.

   One of the inside secrets of finding and meeting the right people is working with charities. Celebrities have a passion for giving, and they respect people and companies who share their passion.

4. Potential for celebrities funding you. More and more celebrities are jumping on the entrepreneurship wagon. For example, Ashton Kutcher not only has the most Twitter followers of any “entrepreneur” (8 million), but he has actively invested in several startups. For example, he has helped Foursquare raise over $21 million to date.

5. Make the endorsement part of a bigger campaign. Building a brand and a successful company is a lot bigger than just getting a celebrity endorsement. The endorsement relies on a major marketing campaign to get the message out and setting the context for a successful delivery on the promises implied.

6. Prepare to handle endorsement success. Customers are a fickle bunch. You must be ready with the right array of retail partners, manufacturing, and distribution arrangements before the demand hits. Marketing momentum fades fast in the face of disgruntled potential customers and long waits in line.

Many entrepreneurs and investors assume that the fascination with celebrities is a passing fad, and not worth the effort. But the evidence is just the contrary. With the advent of the high-speed Internet for videos, real-time messaging via Twitter, and everything going mobile via smartphones, I don’t see things changing any time soon. The world now has an insatiable appetite for anything and everything celebrity. Be there if you dare.

Marty Zwilling

Entrepreneurial Words of Wisdom From the Trenches

When you have been on the startup firing line, you quickly learn that any insight from experts and entrepreneurs who have been there before you can make the difference between failure and success. Yet, many new entrepreneurs brazenly assume they are bulletproof, and march blindly into the fray. The result is that well over 50% of startups fail in the first two years.

I don’t think anyone proclaims to have any silver bullets, but there are common failure threads that appear all too often. There are many books written about failure in startups, and I don’t recommend any of them. I prefer the more positive approach of getting you better prepared up-front, like the new book “It’s Your Biz” by Susan Wilson Solovic.

Susan has years of experience in the small business trenches, and really focuses on what it takes to succeed, with realistic caveats, including an excellent summary of words of wisdom categories that every entrepreneur should review:

1. Don’t chase your tail. As you are building your business, take introspective looks at yourself weekly. How many days have you had lots of activity going on, but at the end of the day, you’ve accomplished nothing to move your business forward? Measure results to make sure you are not chasing your tail, like your favorite puppy dog.

2. Keep moving forward. Never let a day go by in which you haven’t done at least one activity that directly relates to a key business goal. Establish deadlines and milestones for yourself and track your forward progress. Keep you eye on the ball, and don’t be distracted by seemingly attractive options that lead you away from your core business.

3. Listen to your instincts. It’s important to ask and listen to others for advice and guidance, but measure these inputs against your own instincts as well. Blindly following someone else’s strategy doesn’t help as an excuse for failure, and doesn’t help you learn along the way.

4. Manage growth wisely. Overextending yourself and your resources by taking on too much too fast can kill your business. Growing a business is like a marathon, you don’t want your company to be a flash in the pan. Remember, according to Seth Godin, the average overnight success takes six years.

5. Look for collaborative opportunities. In business, it’s tough to survive on an island. Strategic alliances allow you to take on bigger contracts, offer more services, and cover larger geographic territories. In addition, two heads are better than one, so collaborative brainpower is a significant asset.

6. Expect the unexpected. You can’t predict natural disasters, and economic fluctuations. Yet too few entrepreneurs have a current list of business essentials, emergency contacts, or documented backup procedures. Even better, you need a “Plan B” for survival when the unexpected arrives.

7. Learn to manage your stress. The stress of growing your business will take its toll, unless you take care of yourself. Be realistic about what you can expect of yourself and don’t over-commit. Learn to say “no” and really mean it. Schedule some time each week that is just for you, and for your family.

Overall, we all emphasize that you need to keep purpose, promise, and principles as the cornerstones of your business. It’s amazing how many business owners and their teams go through the motions of running their businesses on a day-to-day basis without ever understanding the purpose behind what they’re doing.

Businesses without a purpose don’t have a heart. Or if the principles and values aren’t yours, then it’s not your heart. If it’s not your heart, then you will be making promises to your customers with your fingers crossed. Remember that if you don’t deliver for your customers, they won’t deliver for you. That can make the normal business trenches a deep hole. Read and heed.

Marty Zwilling

10 Quotes That Tag You as a High Risk Entrepreneur

Every entrepreneur needs to be honest about their strengths and weaknesses, and realistic about their reasons for choosing the startup route. For any entrepreneur, even the best business opportunities, if entered for the wrong reasons, will likely fail. Some of these reasons seem obvious, so forgive me for restating, but I still hear them too often.

Statistics show that at least 50% of new startups fail within five years, and many of the survivors eventually fail. If you don’t want to be part of these statistics, consider all the alternatives to starting your own business, especially if you have one of the following perspectives:

1. “I’m tired of working hard and being so stressed all the time.” Starting and growing a business is more work and more stress than any employee role should be. Perhaps you need to look carefully at the reasons for your weariness and stress at work. Health and personal problems don’t go away when you start a business.

2. “It’s my hobby anyway, so why not make it my business?” The problem here is that most hobbies cost money rather than make money. Just because you love doing it doesn’t mean anyone will love paying for it.

3. “I’m desperate, since I can’t find a job that suits me.” With the current recession, jobs are indeed hard to find. But don’t forget that businesses are failing at a higher rate as well. Desperate people don’t make good entrepreneurs, and probably don’t have the resources or fortitude to start a business.

4. “My family has always been in business, so it’s in my genes.” Good entrepreneurs do seem to have certain innate qualities, but it’s not clear that these qualities are automatically passed to offspring. If your passions are elsewhere, don’t try running the family business.

5. “I’ve inherited some money and starting a business should be a good investment.” You can’t start a business without capital, but having capital doesn’t mean you can start one. Learning is expensive and risky. It’s less risky to invest your windfall in someone with a proven business record, or put the money in the bank.

6. “I have some extra time, and I need a second income.” Being an entrepreneur is not a part-time job. A business startup is actually a second expense more than a second income. For supplementary income, you would be better served to take a part-time job with an existing company.

7. “I hate having a boss, and just being an employee.” Don’t start a business for a power trip. When you become a business owner, your customers, suppliers, creditors, partners and a lot of other people will become your new “bosses”. These people may be harder to please than your boss at the office today.

8. “All my friends own hot businesses and seem to be doing well.” You shouldn’t believe all the hype, or all the things said in social circles. Definitely don’t jump into trendy businesses you don’t know just to be popular. Even good friends tend to forget talking about the years of hard work and sacrifice, in favor of recent success.

9. “I’d like to be rich, so I’ll start a business.” Starting a business with a dream of riches is certain disappointment. There is no evidence that entrepreneurs make more money, on the average, than other professionals. There is much evidence that the risks of failure are higher on the business owner side.

10. “My primary goal is to contribute something to society.” This is laudable, but more effectively addressed after you have built a successful company, not before. If changing the world is your main motivation and money is not a concern, then do it, without allowing the building of a company to slow you down.

For anyone with entrepreneurial aspirations, I recommend you start by networking with peer business people and organizations before you commit to a startup of your own. Ask questions and do everything you can to make sure you are tackling the right business for the right reasons. Your entrepreneurial life depends on it.

Marty Zwilling

Smart Entrepreneurs Follow the Zig Zag Principle

It would be no fun if starting a business was simply plotting a straight line between your idea and success, with no challenges along the way. Zigging and zagging amongst the obstacles is the fun part of being an entrepreneur, and it’s what sets you apart from the average worker who knows exactly what he or she has to do every day to get paid. Relish it, or if it scares you, don’t try it.

That doesn’t mean that starting a business should be a random walk into the unknown. There are certain foundational elements that every entrepreneur must build on to succeed, as well as some critical tools we all need. I found these tried-and-true principles summarized very well in a new book “The Zigzag Principle” by serial entrepreneur Rich Christiansen:

1. Assess your resources. At some point financial capital if usually needed to meet business goals. But it’s not a substitute for the other critical resources, mental capital (domain knowledge, skills, and passions), plus relationship capital (friends and advisors). Money results from mental and relationship capital, not the other way around.

2. Identify your beacon in the fog. Start with a big audacious goal to guide you, so that every once in a while you can hit a smaller goal, to provide a break in the fog and catch sight of the beacon before those next steps into the darkness. Goals need to be written down, measurable, and realistic. Expect your fair share of zigzagging to get there.

3. Create a catalyzing statement. This is a key element of every elevator pitch, with enough specificity and fuel to keep you and everyone around you moving toward the beacon in the fog. This quantified big dream should be a long-term goal that your short-term zigzags are all leading to. Use your values as the foundation.

4. Drive your startup to profitability. A first zig of getting to profitability is important to every business, because being broke and always fighting for funding can cause a lot of pain. More importantly, profitability can drive you to find hidden assets, zag to interim revenue sources, and force you to pace yourself in getting to that final destination.

5. Define processes and add resources. After the initial zigs and zags to get profitable, it is time to formalize and document the processes that worked. Only then can you expand those things that led to your initial success. It also means that it’s time to stop micro-managing, hire some of the right people, and start giving up some control.

6. Scale the business. This is implementing a model that you can replicate, to get your product or service out across the country, and around the world. Scaling models charge by the transaction, or subscriptions, or have digital assets with no cost to reproduce. Switch to a mindset of working “on” your business, rather than “in” your business.

7. Stay within your guardrails. Set up some rules to constrain your zigs and zags to prevent “out of control” situations. Common controls include some spending limits, time commitment limits, financial milestones. These guardrails should be closely aligned with your values. Practice the art of saying “no,” and the discipline of delegating.

8. Develop reward systems. To keep you and your team from burning out, you need to define a simple system of motivators and rewards. Too much reward leads to an entitlement mentality. As you hit each zig, you need to take a break from the intensity, celebrate, and enjoy the fruits of your labor.

The alternatives to planned zigzags are a planned straight line, or a planned random walk. Neither of these are realistic for an entrepreneur seeking success, but I still see them every day, and I see the pain that results. Smart entrepreneurs are nimble and flexile, bootstrap to the maximum degree possible, and pivot for emerging opportunities. Be one.

Marty Zwilling

It’s Time for Entrepreneurs to Shift and Reset

It’s time for more entrepreneurs to reset their focus, and shift their thinking to completely different ways of doing things. Everyone talks about innovation, but the majority of business plans I see still reflect linear thinking – one more social network with improved usability, one more wind-farm energy generator with a few more blades, or one more dating site with a new dimension of compatibility. Serious changes and great successes don’t come from linear thinking.

In searching for ways to get this message out, I came across a no excuse, no apology, new book by Brian Reich, called “Shift and Reset,” which makes some excellent points on ways to increase the range of change in a person’s thinking, or an organization’s results. Here are some key principles that he espouses and I support:

1. Force and expect change. Everyone knows change is hard and messy, and occasionally painful. But unless we force ourselves to change, innovate, and experiment with different ways of addressing serious issues, we won’t find solutions that are needed. Major innovation won’t happen without real commitment, sacrifice, and hard work.

2. Measure ability and results, not experience. Move to a model where people are measured on their deliverables, not how hard they are working, or how many years of experience they have. For entrepreneurs, this may mean more learning from experiments, and for organizations it may mean dumping a stagnant team to start over.

3. Don’t settle, demand the best. If you want to perform at the highest possible level, you need to hire the best people, who have produced consistent exceptional results. More energy needs to be spent on how the teams are organized and how the individuals work together. Leading an organization or a movement requires skills not taught in school.

4. Launch fast, fail quick, and learn more. Indeed, even the most capable, passionate, and well-supported entrepreneur will succeed only if he or she has a clear plan to follow. But don’t believe that any plan will develop and must remain unchanged throughout the execution process. Plan in your plan for constant change, with learning.

5. The time is now to think bigger. Great new ideas are emerging from the massive and frenetic coordination of people online and through connections. Let’s make sure they aren’t lost or ignored as we head into the future. Now is the time when smaller, yet dedicated groups can communicate and work to bring together disparate ideas.

Reich makes the point that everyone has a role to play in solving major issues, and driving greater innovation. The Internet and social media facilitates cooperation and collaboration, which is what we need to shift our thinking, then reset our goals and ways of attaining them. It’s much easier to challenge everything we know, and turn them on their sides.

Especially for change in serious social issues and infrastructures, it’s now easier to motivate people to care enough and take action. We will never innovate quickly by following the same, old, tired patterns. We need to realize what being connected really means, and makes possible. Now is the time to change.

Innovation begins with knowing your customer, so that’s always the first place to focus. The shift and reset in thinking applies to finding the solution, more than in defining the problem. Linear thinking on the solution can doom a startup or an entrepreneur. A good step in the right direction is to build a team with diverse backgrounds and perspectives.

This helps break linear thinking, and greatly reduces the probability that you’ll solve a problem in the same old way, or just like your competitors. Another approach is to bring in team members from outside your domain to challenge your thinking. You as an entrepreneur can either take the lead to make real change happen, watch it happen, or wonder what happened. You decide.

Marty Zwilling