Saturday, August 31, 2013

How Many Friends Do Startup Founders Really Need?

facebook-whaleThe Internet and social media have totally destroyed the meaning of the word “friend” and even changed it from a noun to a verb. On Twitter and Facebook, many young people follow hundreds of friends before age twenty, all without ever having physically said or heard a word from most of them. Facebook users with “whale” status (5,000 friends), are not even rare any more.

On the other hand, we shouldn’t confuse online friends with real friendships. Real friends help each other. In my experience, many of the people who “friend” me online today have only their interests in mind, and they aren’t interested in knowing me or helping me at all. Businesses ask customers and other businesses to “Like” them and “friend” them. Are these real friends?

According to most dictionary definitions, a friend is a person whom one knows, likes, and trusts. This definition seems totally lost on many people today. In my opinion, it’s impossible to know, like, and trust someone you have never met. Maybe that’s why so many people are hurt or defrauded every day by someone they assumed was their “friend” on the Internet.

So how many friends are enough for people? I did some scouting through the Internet to find any academic studies on the subject, and here are a few tidbits:

  • Everyone needs at least one friend. Most psychologists agree that starting from a very young age, a friend is critical to the building of social skills, and help develop a balanced view of morality, integrity, and right versus wrong. That’s why good parents play an active role in selecting others for their children to interact with as friends.
  • Limits of the human brain. Robin Dunbar, Oxford professor and anthropologist has posed a theory that the number of friends is limited by the size of the human brain, specifically the neocortex. “Dunbar’s number,” as this hypothesis has become known, is 150. Facebook cuts you off now if you try to exceed 5,000.
  • With age, count becomes less important than quality. By the time we reach 30 years of age, our desire to socialize and maintain friendships already is shrinking, according to an old study by psychologists at the Institute for Social Research (ISR). Fewer friends are often viewed as a good thing, and good friends are the real value.
  • Trusted friends are on the decline in our society. According to a more recent article, Americans’ belief that most other people could be trusted dropped from 77 percent to 37 percent in the last 30 years. My guess is this is more a statement of a decline in overall values, rather than people not needing trusted friends.
  • Although total friends are up, the number of confidants is down. Only trusted friends can become confidants. In the same survey above, people also admitted that confidants are down even more than trusted friends, by almost a third. To me, this follows from earlier points – it hard to have confidants when you don’t have friendships.

In these days of social networking and business networking, it seems that all cultural pressures point to more friends as being better. Yet lots of people like me, who are not so gregarious, find that real friendships take lots of energy. One is probably enough, and I can only handle a few comfortably. More leads to stress and drama.

With business clients and even peers that you believe are friends, you also have to remember not to break the first rule of business relationships, which is to quickly spill your troubles. In a business context in the real world, this is usually taken as a sign of weakness. Expose yourself to family and real friends; otherwise keep on your happy face.

So one of these days, when you are texting your “bff” (best friend forever), that you have never met, think about the meaning as well as the words you use. I fear that real friendships may be slipping from our grasp, and that is sad.

Friendship is the glue of meaningful personal relationships, and the lubrication that expedites business transactions. It’s not the number of friends, but the quality of the friendship that makes the difference. If you don’t want to be alone despite many friends, spend more time on quality, and less time counting.

Marty Zwilling


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Friday, August 30, 2013

10 Key Steps For Aspiring Billionaire Entrepreneurs

richard-branson-on-strategies-for-successEveryone recognizes a great entrepreneur when they work with one, but most entrepreneurs don’t know what to look for in themselves that will drive that perception by others. In my experience, there is no magic gene involved, just simple good habits executed consistently and convincingly until everyone around you in a startup wants to follow your example.

This leading by example is easy to say, but not so easy to put into action. Most leadership gurus, including John Baldoni, have provided generic recipes, like his book from a while back, “Lead By Example: 50 Ways Great Leaders Inspire Results.” The points are great, but can be made even simpler and more actionable by adapting then to the world of the entrepreneur:

  1. Demonstrate character. In the dictionary definition, character is said to be “the stable and distinctive qualities built into an individual’s life which determine his or her response regardless of circumstances.” Steve Jobs of Apple had character, and the people around him knew what he stood for in good times as well as bad.

  2. Be accountable for your actions. In a startup, things don’t always work, and it’s easy to blame someone else, the poor economy, or just bad luck. Thomas Edison made no excuses for ten thousand light failures. Challenged by his contemporaries, Edison soberly responded: "I have not failed. I have just found ten thousand ways that won't work."

  3. Check your ego at the door (and keep it there). For an entrepreneur, this is often evident in the willingness to be coached, by outside experts or by your own team. We all know too many people who won’t listen to any advice from anyone. That’s just hubris, and it doesn’t inspire anyone.

  4. Promote resilience. There is no shame in getting knocked down; it’s getting back up that matters. In a startup, pivots and problems will happen. Learn to anticipate change, bounce back stronger, and teach others to do the same. Dean Kamen, while still struggling with the Segway Human Transporter, holds 440 other device patents.

  5. Get in the habit of asking questions but do not expect easy answers. That includes taking a hard look in the mirror, and facing reality. Howard Schultz, who grew Starbucks to 13,000 stores by 2008, decided to step back in as CEO when the economy was killing his stores, and refocus everyone on the customer. Now he has over 20,000 stores.

  6. Manage around obstacles. We’ve all seen the entrepreneur who is struggling to keep the business alive by tackling the daily obstacle. No one is looking around the corner to see the next one. Richard Branson, now worth about $4.2 billion, offers this advice: “Obstacles and challenges are healthy for everyone.” He is always looking ahead.

  7. Drive innovation. Great businesses these days start with innovation. Entrepreneur examples include Larry Page and Sergey Brin at Google, who turned a new search technology into a tool that most of us couldn’t live without. Encourage everyone on the team to think and act creatively. Good ideas can come from anyone at any time.

  8. Encourage dissent about issues but promote civility around people. Receptiveness to dissent allows for corrective feedback to monitor ineffectual startup practices, poor and unfavorable decision making, and insensitivity to team needs and desires. This is positive, but a loss of civility more than negates all these positives.

  9. Create a winning culture. Entrepreneur leaders drive values, values drive behavior, behavior drives culture, and culture drives performance. High performance makes new leaders. This is the self-reinforcing circle of excellence every startup needs for success. Winning business cultures, like at Apple, are set from the top.

  10. Teach others “the how.” Then get out of the way and let people do their jobs. Great entrepreneurs are mentors to everyone on their team. Effective entrepreneurs are not afraid to “get their hands dirty” working with the troops. Bill Gates of Microsoft, even late in his career, wasn’t afraid to jump in and write some code to illustrate a point.

Being an entrepreneur may start with that million dollar idea, but turning that idea into a great startup is all about results. The quickest way to great results is to build a great team, and let it multiply your productivity. Using the actions described here as a model, take a look in the mirror to see how well you are leading by example.

Marty Zwilling


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Thursday, August 29, 2013

7 Tips For Entrepreneurs Who Like To Work Alone

Mark_Zuckerberg_at_the_37th_G8_SummitYou can’t win as an entrepreneur working alone. You need to have business relationships with team members, investors, customers, and a myriad of other support people. That doesn’t mean you have to be a social butterfly to succeed, or introverts need not apply.

It does mean that you need to look, listen, and participate in the business world around you, and network through all available channels, like business-oriented social networks online (LinkedIn), local business organizations (Chamber of Commerce), and events or conferences in your domain.

I hope all this seems obvious to you, but I still get a good number of notes from “entrepreneurs” who have been busy inventing things all their life, but can’t find a partner to start their first business, and others trying to find an executive, an investor, or a lawyer.

What these people need is more relationships, not more experts, more blogs, or more books. So I thought I would drop back to some essentials in building and nurturing business relationships (most of these apply to personal relationships as well):

  1. Build your network. These are people of all levels that have been there and done that, meaning people who know something that you need to know. See my recent article “Entrepreneurs Learn Best From Business Networking” on how and where to get started. You don’t need a thousand friends, but a few real ones can make all the difference.

  2. Give and you will receive. Relationships need to be two-way, and can’t be just all about you. If you are active in helping others with what you know, they will be much more open to help you when you need it. The more you give, the more you get in return, both literally and figuratively.

  3. Work on your elevator pitch. This is a concise, well-practiced description of your idea or your startup, delivered with conviction to start a relationship in the time it takes to ride up an elevator. It should end by asking for something, to start the relationship.

  4. Don’t skip all business social settings. Face time is critical, even with the current rage on social networks, phone texting, and email. Studies show that as much as 50-90% of communication is body language. That’s usually the important relationship part.

  5. Nominate someone as your mentor. Build a two-way relationship with several people who can help you, and then kick it up a notch with one or more, by asking them to be your mentor. Most entrepreneurs love to help others, and will be honored to help you.

  6. Cultivate existing allies. These are people who already know and believe in you, but may not be able to help you directly in your new endeavors. But don’t forget that each of these allies also has their own network, which can be an extension of yours, if you treat them well.

  7. Nurture existing relationships. We all know someone who claims to be a “close friend,” but never initiates anything. They never call, they never write, and wait for you to make the first move. If you don’t follow-up on a regular basis with someone, there is no relationship, only a former acquaintance.

On the positive side, many attributes of an introvert lead to better business decisions, such as thinking before speaking, building deep relationships, and researching problems more thoroughly. Mark Zuckerberg, Facebook founder, is currently the most famous introvert entrepreneur, so don’t let anyone tell you it can’t be done.

One of Mark’s secrets seems to have been to surround himself by extroverts like COO Sheryl Sandberg, and people who have a complementary energy. But working alone doesn’t get you very far. It takes a team to win the game of business, so take a look around you to see how you are doing so far.

Marty Zwilling


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Wednesday, August 28, 2013

Socio-Economic Change Requires Real Entrepreneurs

social-entrepreneurshipA term I’m hearing more and more these days is “social entrepreneur.” In the simplest of terms, these are people who seek to generate “social value”, rather than profits, and use traditional business principles to create and manage a venture to make social change.

On the surface, this sounds like entrepreneurs who want to build a non-profit organization. Yet the term seems to be more often associated with people whose work is targeted toward long-term socio-economic change. Think Margaret Sanger (birth control) or Mahatma Gandhi (non-violent), as opposed to the leaders of the Cancer Society or Goodwill Industries.

Whether the objective is to generate profits or social capital, the common element for all entrepreneurs is the recognition that there is a problem which needs solving, or there is an opportunity to improve the status quo.

The vision is always to be a change agent, to invent and popularize new approaches, and to persuade people to take a leap forward. In every case this requires a committed ultimate realist with the determination to persist in the face of daunting odds.

Another way to distinguish between the two types of entrepreneurship is by identifying what social entrepreneurship is not:

  • Not a fundraising strategy for nonprofits. A social enterprise may actually be profitable, or it may be non-profitable, but the generation of funds is deemed secondary to success on the environmental or social issues in the vision. Generating funds should not be the highest priority.
  • Not about profit before social impact. A social enterprise must be financially sustainable only as a means to the end, which is its social or environmental impact and rate of change. The business entrepreneur mission is profit always, social impact maybe.
  • Not a new definition for the nonprofit sector. The evident and real purpose of the social enterprise must be to make the world a better place, through the operation of the business. This certainly also has potential for enhancing the vitality of the nonprofit sector, but it doesn’t move it to a higher moral plane.
  • Not an investment opportunity for business investors. I still get inquiries about how to find angel investors and venture capitalist to kick-start a social enterprise. Funding such an enterprise is in the realm of philanthropists, government grants, or bootstrapping. Business investors are looking for a financial return, not a social capital return.
  • Not about entrepreneurship in the government sector. So far, the largest source of services and funding for social enterprises and social entrepreneurs has been federal, state, and local governments. Yet the enterprises are not government enterprises, and the process for success makes them good business enterprises.
  • Social entrepreneurship is not socialism. The socialist doctrine dictates compulsory taxpayer contributions to finance social initiatives, while the social entrepreneur uses the standard business model and innovative approaches to attract customers, fund activities, and accomplish social change.

In all types of entrepreneurship, an entrepreneur rather than an administrator is required. This is someone who is willing and able to create a new enterprise, based on an innovative idea, and is willing to assume total accountability for the inherent risks and outcome.

So, if you are an entrepreneur at heart, but you are driven by a higher cause than making a profit, social entrepreneurship may be for you. It is an emerging field with diverse and shifting interpretations, but most agree it’s really about making the world a better place. There is certainly plenty of opportunity in that space.

Marty Zwilling


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Tuesday, August 27, 2013

10 Rules For Working Less And Getting More Done

Productivity-keyEvery startup founder feels the pressure of the thousands of things that need to get done, all seemingly at the same time. There is just not enough time! The real solution is better productivity and less procrastination, to put you back in control of your business. You need to spend time on important things, as well as the urgent.

Many entrepreneurs waste too much time on low-priority administrative tasks, procrastinating on higher priority but tougher tasks, resulting in last minute crises, and failure to complete the critical work that people are really expecting of them. We all know people who profess to be stressed out and “so busy” that they never have time for anything – yet they never seem to get things done.

Dr. Jan Yager, a recognized expert on the subject of time management, addressed this issue in the latest edition of her book, “Work Less, Do More: The 14-Day Productivity Makeover.” Among other things, she identified ten general productivity principles to give you a competitive edge, which I have adapted here for entrepreneurs:

  1. Control yourself well, but don’t try to control others. The key problem you need to solve first is “distractionitis.” This is the pain of the endless stream of email, phone calls, and daily crises which prevent any really important accomplishments, like closing customers. Being a good role model is productive, but trying to control others is fruitless.

  2. Don’t try to do everything, or you may accomplish very little. Pareto’s law says you get 80% of your results from 20% of your efforts. Figure out what deserves your 20%, and focus on that. Start each day with the highest priority task you need done that day, and leave the emails and phone calls till the end of the day, if you have time.

  3. Making the time to organize yourself will save you time. One of the top productivity killers is disorganization and wasting time trying to find something. Take the time to build a database of contacts, and structure your online filing system to include a total search capability. Hire an expert, if required, to automate repetitive tasks.

  4. Aim for achieving excellence, but reject perfectionism. By definition, no human or any business is perfect, so achieving perfection is unrealistic and doomed to failure. The aim for excellence is laudable, but if translated to perfectionism, it becomes self-defeating and non-productive.

  5. Understand and overcome procrastination. Fear of success and fear of failure are at the root of most acts of procrastination. Psychologists assert that procrastinators actually sabotage themselves. They put obstacles in their own path. They actually choose paths that hurt their productivity, and limit their success in business. Avoid these.

  6. Pacing yourself will take you further than non-stop working. Rest makes you more productive. Get enough sleep so you can remain active throughout the day and evening. Build in “breaks” to your day, like scheduling lunch away from your desk, and going outside for a breath of fresh air every couple of hours.

  7. Use your listening skills to become more efficient and effective. Maximize your own productivity by listening to what your team and your customers tell you they need and giving it to them. But still make the time to set high-level business strategy and objectives. Don’t waste time on nice-to-haves.

  8. Productivity is a relative concept. Perception is reality in business. The most productive team members are the ones who consistently over-deliver, even though they have promised less. Productivity is perceived value per unit of time, and is not related to actual hours spent working, or working intensity. Productivity is quantifiable results.

  9. Have clear measures of your productivity. If you can’t or don’t measure results, you can’t manage any activity or run a business. An entrepreneur’s ultimate task is to define success in term of results desired – number of customers, revenue, and profit. Without goals, there is no productivity to measure.

  10. Delegate tasks, not relationships. Delegation of tasks to others who can do the work faster or cheaper is a productivity multiplier. But maintain the communication relationship with all key constituents. If you’re not talking to your key clients, customers, or vendors, you don’t have the relationships needed to manage productivity.

For entrepreneurs, after the idea, success is all about execution. Success in execution is all about productivity – more time, more money, more customers, and more satisfaction. If you find yourself working more, enjoying it less, and getting less done, it’s time for you to implement these new mantras for productivity.

Marty Zwilling


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Monday, August 26, 2013

How To Avoid The Entrepreneur Passion Trap

i-am-entrepreneurEvery entrepreneur wants to know how they can improve their odds on the road to success, and why some entrepreneurs seem to be able to squeeze success out of even a marginal business case. Most experts agree that is has lot to do with your level of passion, determination, and innovation, modulated by a strong focus on reality, common sense, and street smarts.

John Bradberry, in his book “6 Secrets To Startup Success” explores many of these attributes, especially passion, and defines some useful principles to help enthusiastic entrepreneurs squeeze the most out of their passion, while not being trapped by it. Every existing and budding entrepreneur should internalize these reality principles:

  1. Ready yourself as a founder. Too often, passionate entrepreneurs leap head first into a venture before thinking it through. To improve your readiness to succeed as a startup founder, take an honest look at yourself as a founder before leaping. Reality-check your goals, then focus on ways to leverage your skills, assets, resources, and relationships.

  2. Attach to the market, not your idea. Passion is an inner phenomenon, but all healthy businesses are rooted outside the founder, in the marketplace. To turn your passion into profits, emphasize the market, and always think about your business relative to the customers you serve. Know your markets and execute on your market opportunity by placing a priority on your customer’s experience and perception of value.

  3. Ensure that your passion adds up. Passionate entrepreneurs tend to develop rose-colored plans, over-estimating early sales and underestimating costs. To convert your passion into tangible business value, write a business plan that makes financial sense for the needs and future goals of your startup, and have it checked by an expert.

  4. Execute with focused flexibility. No amount of startup planning can accurately predict the unexpected twists and turns imposed by reality. To succeed, a new venture needs both iteration and agility. Establish an ongoing process for translating ideas into actions and results, followed by evaluation.

  5. Cultivate integrity of communication. Passionate commitment to an idea can breed reality distortion. That is, aspiring entrepreneurs often see only what they want to see and rely on “feeling good” about their venture as their only measure of success. Commit to building the skills essential for high-integrity communication: curiosity, humility, candor, and scrutiny.

  6. Build stamina and staying power. Contributing factors aside, most startups fail because they run out of money or time. To lengthen and strengthen your venture’s runway, aim to launch close to the customer and raise more money than you’ll think you need. Focus on building personal staying power, maximize learning, and improvements.

These principles will help keep you from falling into the passion trap. Bradberry defines this trap as a self-reinforcing spiral of beliefs, choices, and actions that lead to critical miscalculations and missteps which result in rigidly adhering to a failing strategy until it’s too late to recover. Entrepreneurs who fall into this trap usually don’t even see it coming.

According to Small Business Association figures, about six million Americans a year make the bold leap onto the startup path, with many more worldwide, and many have no corporate safety net to fall back on. Unfortunately, less than half of these new ventures survive beyond a few years. Too many of these have fallen into the passion trap.

Of course, passion is what real entrepreneurs live for, and they sometimes assume it can take them anywhere they want to go. But those who continually temper their passion with reality principles, and adjust their course, are much more likely to see success in getting there. Like the line from a country song, “if you don’t where you’re going, you might end up somewhere else.”

Marty Zwilling


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Sunday, August 25, 2013

6 Acts to Keep the Focus on Urgency vs Emergency

JKotter-strategyIn business and startups, a “sense of urgency” is a good thing. Yet many entrepreneurs confuse this with a “sense of emergency,” which insidiously saps the life from their business. Urgency comes from a greater purpose focused outward, to make good things happen, while handling emergencies is a reactionary inward approach to saving ourselves from the daily crisis.

We’ve all known managers and executives that seem to thrive on emergencies, and often seem to instigate them. As a result, they are always too busy to proactively get to the urgent and strategic tasks, or provide the leadership and mentoring needed to motivate the team for the long haul.

In this era of rapid change and a competitive worldwide economy, every entrepreneur needs to instill in their team a sense of urgency, and be the role model for that mode. John P. Kotter in his book from a while back, "A Sense of Urgency," asserts that urgency is not frantic activity like handling emergencies, but a series of more proactive activities, including the following:

  1. Behaving with urgency every day. Always demonstrate your own sense of urgency in meetings, interactions, memos and e-mail, and do so as visibly as possible to as many people as possible. You are the role model for everyone in your organization. If your tone or actions lack urgency, it percolates quickly to everyone, and you reap what you sow.

  2. Consistently communicating urgency. Urgency is a set of thoughts and feelings, as well as a compulsive determination to move and win now. Aim for the heart, not just the mind. Look for the element of every story that will compel employees into action. Make employees feel empowered, not stressed, to buy into the need for urgency.

  3. Creating action that is relentlessly aimed at winning. Make sure your actions are exceptionally alert, and focused on success. Show some progress each and every day, and constantly purge low value-added activities. Be quick to reward the winning actions of everyone on the team.

  4. Bringing the outside in. Be on the lookout for compelling data, people, video, websites and other important messages from outside the company. Strive to connect internal activity with external happenings and challenges. Highlight competitor wins in the marketplace, and continually challenge your own team to do better than competitors.

  5. Finding the opportunity from a crisis. Always be alert to see if crises can be a friend, not just an enemy, in order to destroy complacency. Think of crises as potential opportunities, and not only dreadful problems that automatically must be delegated to the damage control specialists. But don’t assume that crises inevitably will create the sense of urgency needed to perform better.

  6. Dealing with the urgency-killers. Remove or neutralize all the relentless urgency-killers, people who are skeptics or by their actions keep a group complacent or create destructive urgency. Examples are people who are always “too busy” or stretch every task delivery beyond reasonable limits.

A sense of urgency definitely includes impatience. Every successful entrepreneur I know is impatient with his own progress, and that of his team. Every member of the team should be impatient with the level of success so far. Yet they are not frantic, even in recovering from the latest emergency. They never confuse urgency with the level of effort expended.

A sense of urgency in business assumes that rapid change is required and normal. A sense of emergency is usually an effort to stop change, both good and bad. Every business should be embracing change, challenging their assumptions, and fighting inertia. Emergencies are just positive opportunities to learn.

Another challenge is to avoid a false sense of urgency. The enemy of urgency is a full appointment calendar, when everything becomes urgent. Now is the time to assess these attributes in your own startup, and in your own leadership style. Are you operating with the proper sense of urgency, or do you spend most of your time handling emergencies?

Marty Zwilling


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Saturday, August 24, 2013

Every Startup Needs Six Social Media Initiatives

social-media-initiativesAn all-too-common question I get from startups and small businesses is “Which is the right social media platform for my business?” Is it Facebook, Twitter, LinkedIn, or one of the other 200 active platforms vying for attention these days? The right answer is that not all of these are worth your attention, but it’s probably more than one.

The “Tyranny of the OR” is a concept from the business best-seller “Built to Last,” by James C. Collins (Stanford Business School). Too many executives believe that things must be either A or B, and can’t be both. The reality is that most businesses need to embrace the “Genius of the AND,” meaning they should use and monitor more than one of the available platforms, based on objectives.

If you are in the realm of the 47% of small businesses who still ignore social media, you need to read the book by Dave Carroll, “United Breaks Guitars.” It highlights the story of how United Airlines in 2008 paid no attention to social media as Dave’s story of his crushed guitar and poor customer service went viral around the world. United Airlines is still recovering from that debacle.

Thus your objectives for social media should at least include monitoring your online reputation on the three top platforms, and hopefully taking the minimum actions to turn any negatives into positives for the rest of us. Of course, the right approach is to be proactive along all the following fronts:

  1. Reputation management. You can’t ignore the fact that Facebook alone now has over one billion users who may be talking about you, and there are fifteen other platforms per Wikipedia that have over 100 million users. You need to protect and grow your brand, so the first step is to know what’s going on, and the best defense is a good offense.

  2. Build your brand and expert visibility. Engaging in social media and blogging on a regular basis is a low-cost way to achieve visibility, and become the “go-to” person for that topic and the voice that people trust in your industry. That’s how you brand yourself as an expert in your niche and make your company the one that others seek out and turn to. Customers today trust those they know and those they see others trusting.

  3. Increase customer leads and conversion. With over 98% of the population now using social media, at least 30% look at business profiles on Facebook, Twitter and LinkedIn before buying any product or service. Of those, approximate 70% said they wouldn’t deal with a new company if it didn’t have a social media presence. You need to be there.

  4. Maximize customer retention. It’s a well-known axiom of business that efforts to retain existing customers have tremendous payback, compared to the costs of attracting new customers. Courting them with ongoing updates and special offers through their social networks is a natural way to keep their loyalty.

  5. Proactive customer service. Without social media, companies must rely on incoming calls and letters to address customer problems and concerns with products and services. Why not ask them for feedback before there is a problem, and watch what they are telling their friends, both good and bad?

  6. Keep up with the competition. Last year, Facebook’s revenue from advertising was over $5 billion, which was a 40% year-over-year increase for the last quarter. Almost 40% of small businesses that sell on Facebook say it is their sole sales channel. Ignoring what your competition does is sure to limit your business longevity.

So what are the best social media platforms for small business, according to these industry leaders? It never hurts to look at where the big boys are. According to data from Inc. 500 companies, the top three are Facebook (74%), LinkedIn (73%), and Twitter (64%). I recommend that these be the point of entry for every business.

For the new platforms and all the rest, that’s where tracking and testing comes in. Set some objectives, pick a likely platform, set some measurements, and do a 30-day trial. If you don’t get results, it might be a mismatch for your target market. If you see progress, double down and add even more content or focus to continue the positive momentum.

So there is no one magic social media platform for any business, just like there has never been just one marketing channel for any business. The best marketing programs today for small businesses are the “genius of the AND,” including traditional print and video advertising, complemented by proactive efforts in a selection of the new social media domains. Don’t put all your marketing eggs in one basket.

Marty Zwilling


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Friday, August 23, 2013

How To Become an Extraordinary Entrepreneur Leader

peter_fudaIn building successful businesses, I find that creating a new and innovative product or service is usually the easy part. The hard part is providing the leadership required to align and motivate all the constituents and players – from engineers, to investors, vendors, and ultimately customers. Great entrepreneurs are not just idea people and then managers, they are extraordinary leaders.

Most investors admit that they invest primarily in people, not ideas, and they inherently believe that they can sense this leadership ability needed to get the rapid growth and 10x return we all strive for. Yet beyond a list of noble attributes, like vision, courage, and integrity, it’s hard for them to define what separates an ordinary entrepreneur or manager from an extraordinary leader.

I just finished a book by Dr. Peter Fuda, “Leadership Transformed: How Ordinary Managers Become Extraordinary Leaders,” that identifies seven leadership themes, presented as metaphors, which I believe will really help anyone recognize great leaders, and even more importantly, accelerate your own entrepreneur leadership transformation:

  1. Demonstrates a burning ambition and a burning platform (fire metaphor). These are the forces that initiate and sustain transformation efforts. The top two on the personal side are “urgency” and “desire,” but these have to be matched on the business side with the willingness to burn the platform (change any aspect of the business) without a crisis.

  2. Sense of accountability and momentum (snowball metaphor). This means no excuses and no rationalization, sweeping team members into mutual accountability. The leader then builds momentum from small successes into a snowball that will grow into a large, powerful, and eventually unstoppable business. Have you addressed all sources of drag or friction on your snowball?

  3. Artfully applies tools, and strategies for change (master chef metaphor). New entrepreneurs are really amateur chefs learning to cook a new business. Existing business frameworks are the recipes, and great entrepreneurs creatively use new tools and strategies to hone these frameworks, just like a master chef.

  4. Works with other team members on mutual aspirations (coach metaphor). It is not about leaders becoming coaches; it’s about leaders letting themselves be coached by others – advisors, team members, and even customers. A team’s captain is dependent on the support of their teammates, requiring trust and respect from both parties, and humility on the part of the leader.

  5. Does not mask authentic self, values, and aspirations (mask metaphor). Too many entrepreneurs put on a mask to conceal personal imperfections, or they adopt an identity not aligned with their authentic self, values, and aspirations. This façade is a burden soon recognized, so dropping the mask is more effective, as well as more comfortable and more fun.

  6. Enhance their self-awareness and edit their own performance (movie metaphor). Great entrepreneurs recognize that leadership is like a movie, and it can be honed and improved by disciplined reflection (see yourself as others see you), edited for impact, and directed by experts on your team. Reflect on how often you operate from judgment as opposed to perception. Think about who could help you reflect-on-action.

  7. Embed their personal journey within the business journey (Russian dolls metaphor). Business is really a set of journeys that interact with an entrepreneur’s personal journey. Up-line this may be your interaction with your Board, investors, and family. Down-line it’s the leadership model you use with your internal teams and external partners. Focus on improving your up-line and down-line dolls with your personal journey.

Here are five strategies that Dr. Fuda and I both agree will lead to a more empowering approach to entrepreneur leadership, and help you optimize all the themes described above :

  • Shift your focus from your business content to market context.
  • Spend more time showing others what is required, rather than telling them.
  • Focus more on collaborating with others, rather than competing.
  • Evolve from guru to guide, and coaching others to find answers for themselves.
  • Move from critic to cheerleader, from what is going wrong to what is going right.

If you are an investor, you need to recognize and mentor entrepreneurs to extraordinary leadership. If you are a startup Founder or executive, you need to strive continually to change yourself and your business to build and maintain the leadership you need to out-perform your competition, and generate the results to meet personal and financial objectives. How many of these themes and strategies are you practicing today?

Marty Zwilling


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Thursday, August 22, 2013

Entrepreneurs Need to Harness the Power of Frequency

RepetitionMost of the young entrepreneurs I know are classic proof of the old adage that people tend to overestimate what they can do in a short period, and underestimate what they can do over a long period. They become frustrated when they are unable to build their startup in a weekend, and give up way too soon when the path to real success seems to be interminable.

Both problems can be mitigated by learning the power of frequency, as defined in a recent book by Jocelyn K. Glei, “Manage Your Day-to-Day,” which asserts that working consistently and frequently on something makes it possible to accomplish more, with greater originality, than spasmodic bursts of effort. A successful startup needs to be a daily task, with consistent focus.

I suggest that the following key reasons from Glei for how the habit of frequency fosters both productivity and innovation in general, apply especially well to an entrepreneur starting a new business:

  1. Frequency makes starting easier. Getting started is always a challenge. It’s hard to convert an idea into a business, and it’s also hard to get back into the groove with all the distractions of other activities and your “real job.” If you block out time every day to focus on your startup, you keep your momentum going, and start seeing long-term progress.

  2. Frequency keeps insights current. You’re much more likely to spot opportunities for innovation and to see new trends in the marketplace, if your mind is constantly humming with issues related to the startup. Frequent discussions with peers and customers on open questions will keep you from being led astray by your own biases.

  3. Frequency keeps the pressure off. If you’re producing just one page, one blog post, or one sketch a week, you expect it to be good and final, and you start to worry about quality. It’s better to write 100 lines of new code every day, recognizing that you will have to iterate to perfection, rather than expecting a week of work to happen all in one night.

  4. Frequency sparks creativity. You might be thinking, “Having to work frequently, whether or not I feel inspired, will force me to lower my standards.” In my experience, the effect is just the opposite. Creativity arises from a constant churn of ideas, and one of the easiest ways to get results is to keep your mind engaged with your project.

  5. Frequency nurtures frequency. If you develop the habit of working frequently, it becomes much easier to sit down and get something done even when you don’t have a big block of time; you don’t have to take time to acclimate yourself. The real enemy of progress is the procrastination habit, which should be replaced with the frequency habit.

  6. Frequency fosters productivity. It’s no surprise that you’re likely to get more accomplished if you work daily. The very fact of each day’s accomplishment helps the next day’s work come more smoothly and pleasantly. By writing just 500 words a day in a blog, I suddenly realized that I had enough for a book in just a few months.

  7. Frequency is a realistic approach. Frequency is helpful when you’re working on a startup idea on the side, with pressing obligations from a job or your family. It’s easier to carve out an hour a day, than to set all else aside for a week in the early stages of your startup.

Don’t be like many of the people that we all know who feel like they are working at a breakneck pace all day, every day, but have very few tangible results to show for their efforts. Every entrepreneur needs to build a proactive daily routine, while being able to field a barrage of messages, and still carve out the time to do the work that matters.

Another enemy of progress in startups is the curse of perfectionism. Some entrepreneurs never start, waiting for that ideal moment, when there are no distractions. Some are lost in the middle, obsessing over every step, and some never finish, always refining and adding, rather than learning from a minimum viable product. Thus the need to combine frequency with pragmatics.

If you can manage your day-to-day routine with frequency, rather than let reactive chaos manage you, you will find that your creative mind is sharpened, and your focus on the new venture will generate the “change the world” results that attracted you to this lifestyle in the first place.

Marty Zwilling

*** First published on Entrepreneur Inc on 08/15/2013 ***


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Wednesday, August 21, 2013

7 Key Startup Principles for Keeping Up With Change

jim-barksdaleEvery entrepreneur’s first priority should be the alignment of interests across the range of constituents required for success – partners, investors, customers, vendors, and employees. The best are ones quickest and most willing to do the realignment on a continuous basis these days, as the market changes, customer interests change, and you learn from experience.

Alignment means everyone has complementary objectives, and everyone is executing on their objectives. These things change so fast these days that the primary role of the entrepreneur as CEO is to be the Master of Realignment. My perspective on this role is outlined in the book “Rapid Realignment,” by the experts in this space, George Labovitz and Victor Rosansky.

The basic alignment framework of strategy, customers, people, and processes hasn’t changed, but the pace of technological, competitive, and social change has increased at an amazing rate. Most entrepreneurs recognize the need to pivot on a regular basis, but many forget that pivoting usually requires a realignment effort to get all the players back in sync.

At the highest level, startups must remember what Jim Barksdale of Netscape and FedEx famously said, “The main thing is to keep the Main Thing the main thing.” That means keeping all the players and all the organizations centered on what matters amid the crosscurrents of change. There are several key principles to follow along these lines:

  1. Move slow, fast, faster. The experts advise taking your time initially to listen, learn, and gather data. Then it’s time to speed up with a set of ambitious initiatives, and finally going all out to engage all the constituents in enduring change. False starts or obvious mis-steps will derail even the best pivots.

  2. Revisit your startup vision and values. Make sure the inspiration that launched your vision isn’t lost in the course of a pivot or market change. Of course, you may need to realign that vision to your team, your investors, and all the other players. Without that realignment, many may be left with confusion.

  3. Realign all elements of the plan. All too often I talk to startups which still don’t have a social media plan even though most of their customers now use social media as a key part of their buying decision. If you have had to pivot from the consumer market to enterprise customers, that requires new pricing models and new sales channels.

  4. Communicate, communicate, communicate. If you want effective team collaboration, you have to communicate effectively. When I was an executive, a common complaint was “Why didn’t someone tell me about the change?” A rule of thumb is that you need to put out an important message four times, in different ways, before everyone hears it.

  5. Change out team members as required. Entrepreneurs need to understand that realigning a team often means replacing members who are unable to change. It certainly is likely that you will have to get new strategic partners, and market to a new segment of customers. These changes may cost more than product changes.

  6. Update delivery systems and processes. Re-evaluate processes as they are today and set metrics to better represent the new sales, operational, and service needs. Then you have to face the reality that it’s time for new systems, software, or vendor contracts. Building a culture of continuous improvement is great for facilitating realignment.

  7. Pay particular attention to investor alignment. For inexperienced entrepreneurs, pivots and realignments often lead to some of the biggest disagreements and tension with investors, whether they be family, Angels, or VCs. These can easily result in CEO/Founder replacement or funding freezes if not handled openly and above-board.

Quite simply, rapid realignment is required for long-term survival in today’s startup world. Entrepreneurs need to realize that they can’t accomplish the alignment alone – they need to get engagement from all the members of the team, and the extended team. Make sure it hasn’t been pushed too far down on your priority list.

Marty Zwilling


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Tuesday, August 20, 2013

10 Steps to a Memorable Website for Your Startup

website-memorableSmart people only visit and buy from credible and memorable websites. In the past, if your startup had a website presence, the company was credible by definition. In today’s world, a website is necessary but not sufficient for credibility. Dreamers and gamblers have found out that if the website isn’t validated as credible, it’s probably a scam, and everyone loses.

Yet most startups I know experience the same shock of disappointment when they first open up their website to offer their “million dollar idea” product, and nobody comes. What validates credibility and makes your site memorable in the minds of consumers, and how much does it cost?

  1. Put yourself on the site. People buy from people. Until the company name is a famous brand, you are the brand. No name, picture, address, or business history only convinces customers that you are hiding, located in an un-trustable country, or don’t have a clue. They will exit quickly.

  2. Show evidence of your expertise. Publish a regular blog, contribute to relevant social networks, and write a “white paper” on your technology. People respect people with relevant experience, so highlight your accomplishments, and the credentials you have.

  3. Highlight personal presence and testimonials. Third parties are always more credible sources than you are. Highlight interviews and reviews from recognized industry sources, and news sources. Include links to your profiles on LinkedIn, Facebook, and Twitter.

  4. Create a positive online image. Show your visitors some evidence of community involvement and charity efforts. Offer something that is really free – with no strings attached to cause them to lose their trust. Set up an award, and show winners.

  5. Link to recognized brands. If you can have an affiliate relationship with any recognized brand names, or any connection to publicly recognized experts, highlight these and provide links to their websites.

  6. Advertising presence. The presence of a few related advertisements can actually improve your site credibility, since most credible sites have them. Of course, too many or obnoxious advertisements are especially harmful to a site’s credibility.

  7. Join relevant business associations. Most will give you a membership graphic for your website, and an association link to give your business extra credibility. Don’t forget the local Chamber of Commerce and Better Business Bureau.

  8. Provide a privacy and security statement. Display a logo like McAfee Secure or Privacy Label, in addition to specific policy statements on these subjects, to persuade your visitors and prospects to trust you.

  9. Offer support assistance and guarantee. Publish the terms of your support, return, and replacement policies. Be consistent is their application, and provide contact information for both phone and email access. Follow-up for customer satisfaction.

  10. Professional user-friendly site design. Studies have shown that consumers gauge credibility in large part based on the appeal of the overall visual design, including layout, typography, font size, color schemes, no broken links, and correct language usage. Don’t forget basic Search Engine Optimization (SEO) so search engines improve your ranking.

These are all minimal-cost survival marketing efforts. Beyond these, you will likely need to budget time and dollars (up to $50,000 is not unusual) for real marketing efforts to enhance your visibility and credibility, which include branding, promotions, give-aways, and free services.

In summary, a startup with no website, or a website with no credibility will kill your business. Use the tips outlined above during the first three months to get in the game, and count on much more time and money if you intend to stand out. Make your website not only credible, but incredible!

Marty Zwilling


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Monday, August 19, 2013

Why are Good Business Plans So Rare These Days?

business-plan-sketchToo many entrepreneurs still believe the urban myth that you can sketch your idea on a napkin, and investors will throw money at you. Every investor I know is frustrated with the poor quality of the business plans they get. This is sad, since “how to write a business plan” is a frequent topic found in every business journal, and a common title in the business section of every book store.

What is the definition of a good business plan? In simple terms, it is a document which describes all the what, when, where, and how of your business for you, your cohorts, and potential investors. Forcing yourself to write down a plan is actually the only way to make sure you actually understand it yourself. Would you try to build a new house without a plan?

Make sure your plan answers every relevant question that you could possibly imagine from your business partners, spouse, and potential investors. That means skip the jargon and include explanations and examples. A plan that generates more questions than it answers is not a good plan.

Finally, hone the result into a professional document. Remember that you only get one chance to make a great first impression. Make sure it has a cover page, table of contents, headings, page numbers, and is organized logically.

Notice that I didn’t say anywhere that a good business plan has to be at least 20 pages, or have ten sections, or must start with an executive summary. These are good things, but I’ve seen great business plans that are ten pages, or have totally non-standard formats.

But, if you ask, ten sections is a nice round number, and would include the following:

  • Executive summary
  • Problem and solution
  • Company description
  • Market opportunity
  • Business model
  • Competition analysis
  • Marketing and sales strategy
  • Management team
  • Financial projections
  • Exit strategy

You can get free downloads of sample business plans from the Internet, and there are thousands of customized samples for sale highlighting every business area. You can even download a free sample of my own business plan from my website as a starter. You really need a business plan for you own efforts, even if external funding is not a requirement.

So what if you know that you simply aren’t a good writer, or don’t have the time or patience to write? No problem. That’s why they invented ghost writers, and came up with the concept that you can pay someone else to do it for you. A few thousand dollars is a small price to pay for a successful business, or for that $1M investment you expect the plan to entice.

The tougher case is where you really don’t understand the business you are about to enter, so you don’t know what to write. This is a recipe for failure that most investors and professionals can quickly see, so no investment will be forthcoming, and your startup will likely wither and die.

My advice here is to swallow your pride, and find a partner or give it away to someone who has the “domain knowledge” and the business experience to get you going. Your idea may be right, but dead right is not very satisfying to anyone.

Keep in mind that thoroughness and clarity of the plan are factors that will play key roles in successfully financing, starting, and operating your business. A great business plan is one that your team can learn from, attracts investors, and will guarantee your species a future. With no plan, I hope you have unlimited personal funds or at least a rich uncle!

Marty Zwilling


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Sunday, August 18, 2013

7 Steps to Productive Business Use of Social Media

dell-twitterMost startups, and many big businesses, still don’t have a clue on how to use social media productively for marketing their business. They randomly churn for hours a day on a couple of their favorite social media platforms, with little thought given to goals, objectives, or metrics; and ultimately give up and fall back to traditional marketing approaches.

The first thing that entrepreneurs need to realize is that the process and framework for making social media marketing work are different from traditional marketing, and trial and error certainly doesn’t work. Ric Dragon, an expert in online marketing, in “Social Marketology,” outlined the best set of steps I have seen so far for the new world:

  1. Focus on desired outcomes first. Valid social media objectives for a business should include one or more of the following: increased brand awareness, lead generation, service and support, or reputation management. Obviously, the platforms and how you use social media would be different for lead generation versus service and support.

  2. Incorporate brand personality and voice. Popular culture these days expects a more humanized brand voice, and constituents are listening carefully to the tone, vision, and expertise of that voice. Think about how you can project the voice you want, and make sure it is consistently used by all team members across all platforms used.

  3. Identify the smallest segments possible of your constituents. Due to the information overload felt by consumers today, marketing at the generic segment level no longer works. Social media is the only one which allows you to be hyper-granular and drill down to micro-segments, to dramatically improve engagement levels and conversion ratios.

  4. Identify the communities for these micro-segments. Traditionally, community implied a physical grouping, but today a community is characterized by what they value, more than proximity. More important than finding a community, is creating one, with your blog and other social media engagement. The best communities then become your advocate.

  5. Identify the influencers of these communities. Social media brings all the aspects of important influencers these days, including peer pressure, authority, credibility, and in some cases, celebrities. Because feedback from social media operates in real time, you don’t have to wait months for results. You spend the months influencing the influencers.

  6. Create an action plan with metrics. Good action plans include a listening plan, channel plan, SEO plan, and a content creation plan, with activities and metrics. Social media activities span the gamut from curation to gifting, building relationships and groups, blogging, service actions, to lead conversion. Pick the ones that fit your desired outcome.

  7. Iteratively execute and measure results. Measuring is all about return-on-investment (ROI). This can be customer acquisition cost, revenue growth, profit, or whatever other parameters are key to your success. Iterate and expect to pivot, based on results, because you can’t get it all right the first time. This is not trial and error.

In fact, marketing in the social media is fundamentally different from conventional marketing. The depth in which connections can be made with the “audience” or “customers” is far greater than it possibly can be with any other medium. The very nature of influence at this level mans that values and vision must be in tune.

Of course, with social media marketing, trial and error is not the only way to fail. You can fail by not being there at all (see the United Breaks Guitars story), or making the big mistake (see Red Cross Rogue Tweet).

More positively, social media also brings many more ways to succeed. See the classic examples of Dell Makes $3M from Twitter (customer retention), Australia’s Tourism via Facebook (large rewards), and Blendtec You-Tube “Will it Blend” (brand building). It’s time for you to learn the best practices of using social media in your company, and putting them to work before your competition puts you out of work.

Marty Zwilling


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Saturday, August 17, 2013

10 Keys to Managing the Business After the Startup

brian-tracy-managementEntrepreneurs often have formidable technical expertise, key to developing a new product or service, but a great naïveté in management skills. They run into difficulty when their business reaches the $1-2 million annual sales range, or their employee count exceeds 5-10. It’s here that entrepreneurs must shift their thinking from tactical and operational, to strategic and managerial.

I’m convinced that management is a learnable skill. It can come from experience, or from training in a prior company, and it can even be self-taught from the Internet by smart entrepreneurs, just like they learned the skill of establishing a company, negotiating a contract, or filing a patent.

There are also many books on this subject, including one from the master on management, Brian Tracy, “Full Engagement!: Inspire, Motivate, and Bring Out the Best in Your People.” In it, he outlines a long list of key management principles for success. I’ve extracted here some key ones relevant to startups entering the growth stage:

  1. Communication clarity is essential. Management is “getting results through others,” not doing it yourself with the assistance of others. That means your chief responsibility is to communicate clearly about what you need done, and who has the responsibility to do it. Your growing team doesn’t automatically know what you are thinking.

  2. Planning has priority over doing. Planning is one of key learning areas, in moving from an entrepreneur to a manager. Your ability to plan, to think through what needs to be done, in advance, on paper, is a critical skill that largely determines your entire future. Your job moves to determining what is to be done, instead of how it is to be done.

  3. Organize your work before you begin. Most startups begin first, and think about organization later. Organizing means bringing together the necessary resources, and assembling the right people, then assigning work to specific people to be accomplished at specific times to specific standards of performance.

  4. Delegate effectively and often. Delegation doesn’t work when you are creating your startup. ‘Not delegating’ doesn’t work when you are growing it later. Remember that delegation is not abdication. It’s still your company, so you have to follow-up, step in for disaster recovery, and keep the interplay between tasks and organizations working.

  5. Staff properly at every level. This is not the same as finding a partner with complementary skills to start your business. It means not only hiring, but training and measuring performance. It means mentoring less experienced team members, and quickly replacing incompetent staff members. These are all skills you can learn.

  6. Focus on high productivity. For growth and success, you need to continually look for ways to increase output, while lowering costs. That’s a big step from one product for one customer. The three R’s for attaining higher productivity are reorganization, reengineering, and restructuring. No entrepreneur is born with these skills.

  7. Set the standard with visible actions. You can only lead by example, and set equally high standards for the people around you. You learn and gain credibility by committing to excellence, and asking customers and team members for feedback and ideas.

  8. Concentrate on the important tasks. All successful managers never forget to concentrate on their most important task and stay with it until it is done. As a startup grows, it’s easy to try to do too many things at once, while doing nothing particularly well.

  9. Identify constraints and their source. Between you and any goal is a constraint setting the speed at which you achieve that goal. The best managers are the most creative in overcoming constraints. Constraints follow the 80/20 rule – eighty percent are from inside, and 20 percent are from the outside. You need to tell the difference.

  10. Concentrate on continuous improvement. No company that is static can grow or survive. Continuous improvement requires strategic planning to set new objectives and work toward them. Every growth company needs to innovate continually, maybe spending 20 percent of your revenues on research and development.

Some entrepreneurs, on seeing all this, will decide they have no interest in being a manager. They should voluntarily bow out early, to start another business. Others will get pushed out, with some pain, by investors who see the need for a new team to lead the growth stage. Even more painfully, too many others won’t bother to change their style, resulting in everyone being unhappy, and a business that stagnates, or even fails.

Things that great entrepreneurs have in common with great managers are that both are results-oriented and action-oriented. They have a sense of urgency, and move quickly. Thus it should be easy to apply those attributes to the learning required for the next stage of your company. Just start now, and do it!

Marty Zwilling


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Friday, August 16, 2013

8 Keys to Entrepreneurs Who Can Make New Markets

costello-hoganThe ultimate compliment that any entrepreneur can get is that they can “see around corners.” This is a statement that they are willing and able (and successful) at projecting market and technology turns, not just straight-line innovations. They have the courage to make bold decisions, often contrary to conventional market research.

Steve Jobs of Apple has been maybe the most visible example of this phenomenon, but others often mentioned include Richard Branson (Virgin Group), Joe Costello (Cadence Design), and Howard Schultz (Starbucks). Most of you could suggest one more, but not many.

Seeing around the corner does not mean closing your eyes and jumping into the unknown. We can all point to the casualties from that approach. Great entrepreneurs seem to all exhibit a common set of attributes which go well beyond the basic skills required to be an entrepreneur:

  1. “Larger than life” personality and presence. Richard Branson’s adventurer escapades are legendary, and Steve Jobs made new product presentations an experience, as well as a sales pitch and an education. Joe Costello was known to dress up as Frankenstein and the Riddler for company functions, and wasn’t afraid to laugh at himself.

  2. Strive for breathtaking design, as well as function. Great entrepreneurs remember that great design motivates and excites customers, often even more than function. Design is not just about making things look pretty. It gives a product structure and style, and makes it memorable and unique.

  3. Practice learning as an action sport. Entrepreneurs who depend on the ‘traditional’ learning process (schools, formal classes, practice problems, and risk-free iterations) are doomed in breaking the paradigm. The best entrepreneurs attack learning like a sport, savoring the challenge, and practicing it every day.

  4. Possess extraordinary passion and energy. Visible passion is a quality that helps successful entrepreneurs choose their direction, attract clients, investors, and success. They also remember that energy is a resource that must be renewed, so they treat themselves well both physically and emotionally.

  5. Believe there is no such thing as a crazy idea. For real entrepreneurs, crazy is a compliment, and the new market may be just around the corner. Besides, many of the most commonly used items today, like disposable razor blades, were deemed crazy ideas before their inventors made a fortune.

  6. More to business than dollars and cents. Entrepreneurs who see around corners usually start with the “big” vision of making the world a better place. Guy Kawasaki talks about making your product a “cause,” rather than just focusing on how much money you can make, and considering social entrepreneurship for maximum impact.

  7. Not afraid to kill the cash cow. Holding back on promising new businesses to maintain old ones is the bane of many entrepreneurs. Unfortunately, playing defense is easier than playing offense. Steve Jobs didn’t hesitate to kill the iPod in favor of the iPhone and iPad, which moved the market to a whole new level and kept competitors at bay.

  8. Build a great team and nurture them. The best entrepreneurs know that investors invest in people, not ideas. Customers buy from people, not companies. With a team of the best people, the sum is greater than the parts, so your chances of surviving the walk around the corner are optimized. Surround yourself with people smarter than you.

But all these attributes don’t mean that anyone should expect to get it right every time, or certainly not the first time. All the entrepreneurs mentioned here have had their share of failures and false starts. The key is learning from a failure, and having it increase your motivation and focus, rather than de-motivate.

My advice to the entrepreneur looking to earn the ultimate compliment is to first sharpen your view by tackling a more modest straight-line objective, and bouncing your bigger visions off people who have been there and done that (peers, investors, and competitors). Use those reflections for a sneak peek around the corner before you leap.

Marty Zwilling


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Thursday, August 15, 2013

5 Problems to Incent Million Dollar Idea Startups

paul-graham-ideasPotential startup founders are always looking for ideas to implement, when they should be looking for problems to solve. Customers pay for solutions, but there is no market for ideas. I’m often approached by people with a “million dollar idea,” but I haven’t seen anyone pay that for one yet.

Equally often, I see startups who are on the road to implementing an idea, but haven’t figured out what problem it solves – the business plan waxes on eloquently for 20 pages about how great this product and technology is, but never gets around to defining the problem (investors call this the “solution looking for a problem” syndrome).

A related “red flag” in a business plan is a missing competitive analysis section, or a short paragraph that essentially says, “this product has no competition.” My reaction is, if there is no competition, then there is no market demand for your product, so why are you building it?

Luckily, many startups are smart enough to keep morphing their idea, until it finally fits a real-world problem, and they can move forward in the marketplace. Unfortunately they could have saved themselves much lost time, money, and heartache if they had just focused on identifying the problem before they built a solution.

Smart startups also don’t forget that startup ideas are solutions for someone, and companies have to make money. The way to make money is to make something people or companies need (not necessarily what they want). Here are five solutions from an old essay by Paul Graham on “Ideas for Startups” that I believe have even more potential in today’s fast changing environment:

  1. Automate a labor intensive process. This is the traditional realm of computers. Lotus 1-2-3 applied it to accounting spreadsheets, and Google applied it to information mining on the Internet, but Henry Ford even applied this principle to auto manufacturing. There are still millions of these opportunities for startups out there.

  2. Fix something that’s broken. In business, it seems to me that the traditional banking business models are broken or at least no longer fit the purpose. On the other end of the spectrum, Internet dating sites don’t seem to work. There are thousands of them, so they must be offering something people want. Yet they work horribly, according to most people who have tried one.

  3. Take a luxury and make it a commodity. People must want something if they pay a lot for it. Yet most products can be made dramatically cheaper as technologies improve. This opens the market opportunity, you sell more, and people start to use it in different ways. For example, once cell phones were so cheap that most people had one, people started using them as cameras and Internet devices.

  4. Make something cheaper and easier to use. Making things cheaper means more volume and more profit. For a long time making things cheaper made them easier, but now even cheap things are too complicated. Computer applications today are cheap, but often still impossible to use.

  5. Take a current solution to the next level. Solve the currently intractable problems that impact all of us. Tackle the global warming problem, predict where earthquakes will occur, find alternative energy sources, cure cancer, and unlock the keys to aging. There is no shortage of opportunity here.

Combine these with the value of a good understanding of promising new technologies, and the value of having associates with complementary skills to extend your thinking. Problem solutions are the ingredients that startups are made of. Start solving a problem today that you can use as the basis for the “idea” for your next startup.

Marty Zwilling


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Wednesday, August 14, 2013

How Startup Founders Set the Right Company Culture

Visa Business_August Infographic_081413Many investors will assert that company culture trumps strategy every time in predicting the long-term success of a new startup. Obviously, both are important, so it behooves every entrepreneur to start early in setting the right tone for his own company, and every new team member should be gauging both of these relative to their own interests, prior to signing on.

What is a company culture, anyway? Probably the best definition is the oft-quoted view that culture is simply “the way we do things around here.” It’s always amazing to me how different that can be between two companies in essentially the same business. There is no ultimate right or wrong in a culture, but there are attributes that will be right or wrong for you, or your investors.

I saw some good insights on these in a book by Eric C. Sinoway, “Howard’s Gift: Uncommon Wisdom to Inspire Your Life's Work,” which highlights the wisdom of Professor Howard Stevenson and his years of training entrepreneurs at the Harvard Business School. Howard suggests that company culture can be accurately assessed through the following five questions:

  1. Is everyone singing the same hymn? Ask several people on the team for their purpose, values, and strategic goals. If you get disparate answers, or generic job descriptions, the culture is fragmented at best. The result is that everyone pulls in a slightly different direction. This indicates a lack of communication or leadership.

  2. How do the leaders lead? Check for indications that leader actions match their words. Otherwise there is likely a disconnect between what is said to be important and the ‘informal rules’ made clear through leaders’ actions and decisions. The result is dysfunctional or non-credible leadership, which creates a bad culture.

  3. Who gets to drink from the information reservoir? Information is a key resource and culture is shaped substantially by how and with whom that resource is shared. Good indicators include how bad news is shared and whether divergent opinions are cultivated. Successful organizations have a culture of total communication and honest feedback.

  4. Is this an organization of teams or of stars and satellites? Howard rebuts a widely held myth that successful organizations are built of stars with a supporting cast, like a sports team. This model constrains the company from fully leveraging the real contribution and potential of all team members, with less collaboration and more conflict.

  5. How does the organization evaluate employees’ performance? The best cultures are marked by transparency, predictability, progress, and trust between team members and managers. Performance is measured against objective performance, clear goals, and benchmarks. Subjective evaluations leave employees confused and tentative.

Most experts agree that finding the right team members really comes down to finding the perfect culture fit, more importantly than the perfect skill fit. Of course, qualifications and work experience are critical, but the potential for trust and collaboration must come first. The same is true if you are an investor or a professional looking for the right company to stake your future on.

Great cultures don’t just happen. If it’s your startup, you have to make it happen, and it’s worth the effort to start on that first. I assure you that it’s easier to set it right at the start than it is to change it later. Key elements of building the right culture include a written and communicated business plan, defining and practicing company values, and measuring your progress.

Zappos has long been recognized as a startup which exemplifies the focus on culture, and provides award winning customer service. A while back, Tony Hsieh, Founder of Zappos, confirmed in an interview that his top priority was in fact not customer service, but rather company culture.

To walk the talk, Zappos still has quarterly all-hands meetings in which employees can ask anything they like, whether it be about earnings or what brands Zappos will be selling next. Through careful culture matching during hiring and training, Tony built a company full of employees who actually enjoy working there and believe in the brand wholeheartedly.

It’s time to take a hard look at the culture in your own startup, whether you run the company, or are the newest member of the team. If it’s not quite perfect, figure out how you can be part of the solution, or you may be part of the problem.

Marty Zwilling

Disclosure: This blog entry sponsored by Visa Business and I received compensation for my time from Visa for sharing my views in this post, but the views expressed here are solely mine, not Visa's. Visit http://facebook.com/visasmallbiz to take a look at the reinvented Facebook Page: Well Sourced by Visa Business.

The Page serves as a space where small business owners can access educational resources, read success stories from other business owners, engage with peers, and find tips to help businesses run more efficiently.

Every month, the Page will introduce a new theme that will focus on a topic important to a small business owner's success. For additional tips and advice, and information about Visa's small business solutions, follow @VisaSmallBiz and visit http://visa.com/business.


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Tuesday, August 13, 2013

Combine Creative Products with a New Business Model

cannaday-chapman-innovationWithin the startup realm, there is a big difference between having an innovative product versus an innovative business. Some startups have a new technology, but stick to a tried-and-true business model. Others take an existing product, and give it new life with a creative business model. The most competitive startups do both, all the time and every time.

In today’s competitive world, with its accelerating rate of change, no competitive advantage lasts long. According to Josh Linkner, in his book “Disciplined Dreaming,” we have entered the Age of Creativity, in which each incremental gain is zeroed out as global competitors quickly copy and adapt. The only sustainable competitive advantage is creativity.

He makes the case, and I agree, that creativity in a company, large or small, doesn’t just happen – it requires a culture. If you want to build and maintain a creative culture in your organization, you need to make sure your operation is guided by these seven critical rules:

  1. Fuel passion. Every great invention, every medical breakthrough, every advance of humankind began with passion: a passion for change and for making a difference. With a team full of passion, you can accomplish just about anything. To promote passion, you need to develop a sense of purpose, promote collaboration, and have fun.

  2. Celebrate ideas. Many businesses give lip service to their celebration of innovation, but punish, rather than reward, risk-taking and creativity. In a creative culture, rewards come in many forms: money, yes, but great businesses also celebrate creativity through praise (both public and private), career opportunities, and perks.

  3. Foster autonomy. People and teams that can call their own shots are better able to produce valuable creative output, since requiring approval at every step kills the creative process. Granting of autonomy first requires extending trust. The key is to provide a clear message of what you are looking for, and then get out of the way.

  4. Encourage courage. Netflix, which is known for its creative culture, tells employees to “Say what you think, even if it is controversial. Make tough decisions without excessive agonizing. Take smart risks. Question actions inconsistent with our values.” Encourage team members to take creative risks without fear.

  5. Fail forward. Rather than characterizing something that doesn’t work immediately as a “failure,” position it as an experiment. These experiments can be called “failing forward,” because each one leads you one step closer to the perfect solution. The key is to fail quickly. Flush out ideas and let go of the ones that fail.

  6. Think small. When you want to foster big ideas, it’s important to have a strong sense of urgency, be nimble, and not afraid to embrace change. It’s easier to accomplish this in a small team, in a small local environment, before you try to extend it a much larger infrastructure. You will see results sooner, and be more able to overcome opposition.

  7. Maximize diversity. A diversity of thought and perspective fuels creativity and builds creative cultures. To connect with customers, for example, you need to understand the world from their perspective, not yours – this is one area where a diverse culture can make a huge difference.

Fostering creativity doesn’t mean that you don’t need a business plan, or must forgo all discipline in running your business. A successful business is still all about execution, so you still need clear milestones, checkpoints, and metrics to keep you on track.

Creativity is the ultimate competitive advantage. Not just one innovation, but a culture that assures that you are never standing still on the technology or the business model. Make it the priority we are all looking for. No investor wants to bet on a “one-trick pony.”

Marty Zwilling


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