Friday, January 31, 2014

Entrepreneurs Need To Extend Their Range Of Change

nonlinear-thinkingIt’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 book a while back 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 of the 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


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Monday, January 27, 2014

Entrepreneurs Relish The Challenge More Than Money

money-is-not-the-motivatorOver the years, I’ve had the privilege of working with some of the best entrepreneurs in Silicon Valley and elsewhere. On the average, the entrepreneurs I know are living on Ramen noodles. But one thing they all seem to have in common is a love for learning and change. They rush in with a passion to better the world, and money is just an indication of their progress.

The successful ones then invest their time and money in furthering their knowledge base. I’m not talking about academic classes, because at best these only teach you how to learn. In these days of rapid change, most experts believe that the facts college students learn as a sophomore are obsolete before they exit their senior year.

Learning should be viewed as an ongoing part of everything you do, and one of the most important things. It’s an unfortunate artifact of our educational system that young people spend a dozen years focused more on memorizing facts than the learning process, and then thinking that they will have all they need to know for the rest of their lives by the time they graduate.

In business, as in most other disciplines, there are practical steps towards learning what you need for the next stage of your company and your life. These include the following:

  • Networking with people who know. A question I sometimes get from startup founders is “What do I talk to these guys about?” I say you can’t learn much if you are doing all the talking. Just ask investors what they look for in successful companies. I’ve never known any successful entrepreneurs or investors who were not happy to share their insights.
  • Read entrepreneur stories. Most successful entrepreneurs have been written up on the Internet, or in magazines, or books. Spend some time with these biographies and soak up the insights and inspiration. Follow up online with social networking to make contact, dig deeper, and maybe even line up a mentor.
  • Adopt a mentor. Boomers who have “been there and done that” make great mentors. They have the time and interest in “giving back” some of what they have learned to the next generation. Gen-X executives are too busy running their own companies to be mentors. A mentor is someone who doesn’t let ego or money get in the way of helping.
  • Formal learning. Some formal learning is always advisable, but get beyond university MBA courses to professional seminars and case studies. Formal courses work best for basics, like a business start-up course or financial accounting. Go with topics you are interested in and need today.
  • Volunteering with local organizations. Work is highly valuable in any environment of universities and professional organizations. The payback is that you can get experience for free, while working on real stuff. I’ve done business plan judging at local universities, and learned more than I contributed.
  • Just start a business. There is no better way to learn about being entrepreneurial than starting a business. No matter how much advice and counsel you have been given, I guarantee that you will encounter new challenges daily, to enhance your learning opportunities.

If you are one of those people who likes structured classes for learning, and counts on spending at least two weeks per year in the classroom to “catch up,” that’s laudable, but don’t try to start a business at the same time. It won’t happen.

If you have decided to become an entrepreneur solely to make more money, you are also likely to be disappointed. It’s that double challenge of learning to overcome all obstacles, while still surviving on the financial front, that keeps a good entrepreneur motivated to face a new day. Join us if you dare.

Marty Zwilling


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Sunday, January 26, 2014

Startup ‘Word-Of-Mouth’ Is Not A Launch Strategy

word-of-mouth-launchYour marketing launch is the most important element of startup success these days, to get customer attention in this world of information overload. Yet it is the one element that too many entrepreneurs focus on only as an afterthought. Everyone assumes their product or service is so great that “word-of-mouth” will carry the day for them.

Even great products need great marketing “content” to fuel the ascent of their online message. A couple of years ago, I saw a modern-day primer on the key elements of great online content that I like in “Launch: How to Quickly Propel Your Business Beyond the Competition,” by Michael Stelzner, founder of SocialMediaExaminer.com.

Michael delivers field-tested guidance on how to create the core elements of great content for your announcement, your webinars, blog posts, Facebook contests, newsletters, Internet TV, and other initiatives. It’s all about content that will bring the masses to your business:

  1. Highly relevant. To get to the core of what’s relevant to customers, you need to know them well. Use your content as a way to make a connection between your business and things that matter to them. The more frequently you can deliver content that meets the needs and desires of your customers, the more relevant you will become to them.

  2. Educational. Helping customers discover new ways to solve common problems can quickly build you a loyal following. Your content must continue to deliver new ideas. In simple terms, this is where you share your knowledge, as well as the guidance from other experts, for free.

  3. Easy to digest. A conversational tone should be the basis for all of your content. Highly relevant and educational content if irrelevant if you can’t make it easy for people to understand. Common approaches include the use of metaphors, tell stories, and always stay on topic.

  4. Visually appealing. The eye is just as important as the mind when it comes to customers. The old saying, “A picture is worth a thousand words,” is still alive and relevant. Make sure your paragraphs are short. Use callouts and bullets to help the reader speed through your content.

  5. Conversation inviting. Great content is conversation. If you want to connect with customers, put aside your writing formalities. Your language doesn’t have to be perfect. It’s pretty simple to do. Simply speak out loud. Then write it down. The message should spark a side conversation between friends, and a follow-up comment to you.

  6. Lacks a sales angle. Great content shouldn’t have any obvious marketing messages or sales pitches embedded inside of it. If your content is about your specific product or service, that’s not great content; it’s marketing collateral. People won’t flock to marketing materials.

Creating these core elements is a lot easier if you can team with outside experts to help you. They have what your readers seek – important, worthwhile knowledge, and some experts already have a large following of their own. They are a shortcut that can put you far ahead of your competition.

Some experts are so instrumental that they are called “fire starters.” These are people who have so much influence that their endorsement can ignite your efforts nearly overnight. The best potential fire starters have the eyes and ears of people who closely match your ideal base. Nurture these relationships, and provide generous value to them in return.

Every marketer throws around the word “content,” but few have mastered the art and science of creating useful, thought-provoking, and viral content. Great content doesn’t happen by accident. Start early in your planning, build your own skills, or find the best expertise you can afford. There is nothing more devastating than a good business that fails to launch.

Marty Zwilling


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Saturday, January 25, 2014

5 Logistical Steps For Startups Seeking Investors

sand-hill-roadDon’t charge the hill until you are “ready.” This probably seems obvious to military types, but I see entrepreneurs violating this rule all the time. They approach key potential investors way too early, trying to talk their way up the hill, with no supporting business plan, and before they have a support team around them. Needless to say, they usually get shot down, and get no second chance.

The first rule is to separate your advisors from your investors. Perhaps a close personal friend can be both (the earliest stage and first tier investors should be “friends and family”). But for Angel investors and venture capital investors, just remember that investors are not on your team (yet). You only get once chance to make a great first impression.

Continuing with my military analogy, here are some logistics, suggested ammunition, and an assault strategy (the bold points apply to every aspect of building the business):

  1. Do your reconnaissance first. Before you meet a potential investor, check them out on the Internet and through your advisors. You need to know exactly what the investor has done before, what he is doing now, and what will interest him If you walk into his office cold, and can’t convince him you meet his interests, you will walk out cold.

  2. Coordinate and brief your support team. Make sure all your advisors and team members know exactly what your mission is, and if possible, have at least one of them make prior contact to set the stage. If the investor thinks you are coming to ask for domain advice, and you ask for money, your success probabilities are shot.

  3. Fully prepare for the assault. Don’t try to talk and demo your way up the hill. Talk bounces off and won’t stop any bullets. Lead with your two-page executive summary, be prepared to give a ten-slide investor presentation. Keep your big guns, the business plan and financial model, in your holster but visible for backup.

  4. Put your ear to the ground before charging ahead. Offer to give your executive presentation, but he may want just the elevator pitch. Listen, and follow his lead with confidence and enthusiasm. Don’t insist on a product demo – he is buying the business, not the product. If you have an hour, use no more than 20 minutes for presentation.

  5. Follow-up to assess progress or casualties. Have someone else, if possible, follow up with the investor the next day, to find out what really happened. If you didn’t learn anything from the meeting, you weren’t listening. Most VCs won’t volunteer to the Founder what they think, because that limits their options later.

By now, you are probably saying that this is “old school;” when going to Sand Hill Road offices was like going to the principal’s office. There you were ushered into a gorgeously appointed conference room for a precise amount of time with a serious-looking partner. Now some VCs and Angels actually hold court in a nearby Starbucks or Paradise Bakery.

But believe me, investors are, if anything, tougher now than then. Don’t be fooled by the informality. Preparation, professional image, confidence, and strategy are just as important as they ever were. The strategy of “I’ll talk to him informally and early, find out what he doesn’t like, and then I’ll fix it,” is pure folly. Napkins don’t really work as your business plan.

Some of the most prepared “teams” I have seen are essentially one person, with a few part-time advisors, who seem to overcome all obstacles. One person can look like an army charging the hill, if they use all the networking facilities of the Internet, all the tools available to build business plans, financial models, and product prototype.

Don’t be afraid to use some mercenaries to back you up (outsourcing, consultants). All the shortcuts up the hill are rigged with minefields. Better safe than sorry. This is serious business.

Marty Zwilling


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Friday, January 24, 2014

How To Increase Self-Esteem And Success In Business

Paul-Meshanko-speakingIn my years of mentoring entrepreneurs, a problem I have seen too often is low self-esteem, and over-compensating through arrogance and ego. These entrepreneurs find it hard to respect customers or team members, and their ventures usually fail. As an employee, low self-esteem leads to low confidence, poor productivity, and no job satisfaction. Fortunately, both can be fixed.

Organizational change expert Paul Meshanko, in his recent book “The Respect Effect,” explores the human science behind these issues, confirming that people with a healthy self-esteem perform at their best and treat others with respect, getting their best. All of us shut down when disrespected. He assures us that anyone can train themselves to get on track to stay on track.

With my updates to focus on entrepreneurs, I like Meshanko’s eight steps to help build business self-esteem, which support a broad range of attitudes and behaviors that are individually and organizationally beneficial to startups as well as mature companies:

  1. Identify the qualities and skills most closely linked to your idea of success. Current research is conclusive that self-esteem is linked to our sense of competence in the areas that are important to us. As you look at your entrepreneur goals, make sure you are following your own definition of success that gives you pride and passion in its pursuit.

  2. Identify your current strengths and establish plans for improving. Once you have clarified your personal definition of startup success, examine where you currently are relative to where you want to be Whatever your goals, there are few things more esteeming than knowing you’re making progress toward your picture of success.

  3. Be on the lookout for new opportunities to grow your talents and experiences. Part of our sense of self-worth comes from the belief and confidence that we have the ability to grow the business both today and in the future. Entrepreneurs have a natural base for adventure and curiosity, and should relish trying new things each day to stretch them.

  4. Identify and redirect unhealthy competition and comparisons. Make you the base, not others. Your sense of worth should not be determined by other startups, or what you think peers expect of you. Competition sabotages teamwork and leaves feelings of isolation and alienation. Use others as a source of inspiration, rather than envy.

  5. Forgive yourself for past mistakes and poor decisions. From a rational point of view, berating ourselves for past startup failures makes no sense. Free up your energy to be spent on more productive activities, and learn from past efforts. The great entrepreneur Thomas Edison said that every wrong attempt discarded is another step forward.

  6. Hold yourself completely accountable for your actions, decisions, and outcomes. The legitimate place for short-term guilt and remorse is making these lead to some type of behavior change. Failing to hold yourself accountable sends subtle messages that may damage others self-esteem, and it doesn’t promote lasting confidence or competence.

  7. Develop a pattern of self-talk that validates your worth and abilities. Each of us has developed a way of interpreting and explaining the business world around us. It’s important that our stories neither damage us nor free us from blame. We should continue to feel worthy, accountable, and capable, with a mindset that allows us to continue to follow our entrepreneurial passion.

  8. Focus on what you can control, not what you can’t. Our short-term destiny is not always in our control. What we can do is make a commitment to do our best in whatever entrepreneurial environment we find ourselves. We can also make sure we build strong relationships with successful business leaders in advance of our needing their wisdom.

For every entrepreneur, a healthy self-esteem, leading to self-confidence, is critical to your success, since every startup is entering uncharted territory, and must take risks to seize a new opportunity. Not all entrepreneurs have a background to start from a position of strength in this area, but all have the ability to learn and the passion to succeed.

In my experience, the most common cause of entrepreneur failure is giving up too early, rather than running out of money. Are you selling yourself short on your own potential, and not working on your own self-esteem, thus jeopardizing your business success and job satisfaction?

Marty Zwilling


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Monday, January 20, 2014

5 Leadership Elements That Are Not Always About You

leadership-not-about-youMany entrepreneurs forget that their success is more about helping other people than about personally becoming famous, or overcoming the odds and getting rich. A successful business has to satisfy customers with a strong team, by helping them solve problems, save money, or experience more pleasure. That means more focus on helping others achieve their goals.

How and why this is true was brought home to me a while back in the book, “It's Not About You: A Little Story About What Matters Most in Business,” by Bob Burg and John David Mann. This is a fictional story about how an aggressive young M&A executive comes to realize that his aggressive style is actually making it harder to reach his goals.

He concludes that there are five leadership elements that include him, but are not always about him, that lead to success. These are lessons that every entrepreneur should take to heart:

  1. Hold the vision. Many entrepreneurs are able to come up with a vision, but far fewer are able to hold on to it through thick and thin, and communicate it effectively and continuously to their team and their customers. Keep your eyes on where the company is going, especially when nobody else does. Watch your use of personal pronouns.

  2. Build your people. Give people on your team the means, authority, and the motivation to do the job, you will be surprised at the value delivered. Make sure that the essence of your influence is pull, not push. See people for who they are, realize what they can be, and help to take them there.

  3. Walk the talk and do the work. Most startups begin their life as “one-person shows” that over time evolve to teams of people, interacting with customers and vendors. By virtue of the growing workload and stress, too many entrepreneurs isolate themselves from the hands-on as the team builds. Don’t forget to be a mentor as well as a leader.

  4. Stand for something. What you have to give, you offer least of all through what you say, and in greatest part through who you are. Competence and character are most important, and visible to everyone. I believe in the old saying: “If you don’t stand for something, you’ll fall for anything.”

  5. Share the mantle of leadership. The best way to increase your influence is to give it away. Don’t get stuck thinking that you are the deal. Let others lead in their own area of expertise, and your power will be expanded many-fold.

As early-stage entrepreneurs, it’s natural for you to focus on you – what you’re doing, what you want, and what you need. As the business evolves, you must expand your focus beyond yourself to motivating the team and delivering value to customers. At that stage, you are still important, but it’s not about you anymore.

One mistake many entrepreneurs make, especially with online businesses, is a fundamental misunderstanding of how interesting they need to appear to others. Yes, you are a fascinating person. You know how to bootstrap a business, build it from nothing, and burn sweat-equity for long hours to push your dreams to reality. Your business brand needs to quickly supersede you.

Online businesses have removed the convenience of geographic connections. Today, remote relationships are far more important. The best way to turn someone into your devoted fan is to go out of your way to make them feel important. Put yourself first by putting others first as well. It really isn’t about how great you are but how you make others great.

What have you done for your team and your customers lately? How did you make your product manager shine in the last meeting? Being an entrepreneurial success is not about grabbing information and power, it’s about helping others succeed.

Marty Zwilling


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Sunday, January 19, 2014

Entrepreneurs Must Not Confuse Action With Results

business-momentumToo many entrepreneurs confuse actions with momentum and results. We all know someone who repeatedly tells us how “busy” they are, when it’s hard to see what they get done. Momentum is moving things forward (mass x velocity). Founders or employees in constant motion, but with no momentum, will never get off the ground.

It is true that motion in any direction is often better than no motion at all. But motion without momentum may be even less productive. For a more complete discussion of this phenomenon, see the book entitled “Fake Work: Why People Are Working Harder than Ever but Accomplishing Less”, by Brent Petersen and Gaylan Neilson.

So how do you fight this, and get real momentum going in your startup? Here are some key recommendations:

  • Measure results, not work. Build your business plan and day-to-day operations around real results that are quantifiable and measurable. For example, a result is not forty hours of work, but a prototype complete, partner contract signed, or first customer sale.
  • Focus and prioritize. There will always be more things to do than anyone has hours in a day. Focus means act instead of react, act on the important things. Don’t allow yourself to be interrupted by “urgent” issues of the moment, which may not be important.
  • Live the 80/20 rule. Pick the 20% of your important tasks that will deliver 80% of the results. Judiciously apply the 20% of your energy where it will achieve 80% of the momentum you desire. Maintain that balance of work, family, sleep, and unwind.
  • Communicate effectively. People can’t do the job you want unless you communicate effectively. So they scurry around trying to look busy, or work on random things that they hope might generate momentum. Tell people what results you expect, tell them how they measure up so far, and tell them how much you appreciate their results.
  • Recognize the finish line. Don’t burn yourself and everyone out, by continuing a forced march after you pass the finish line, or even a major milestone. Gather your thoughts and savor the small successes along the way.

During the early start-up phase, most of the momentum in a new company derives from the entrepreneur's own commitment and self-sacrifice. You do almost everything by yourself, and your focus is on building enough cashflow so you can start bringing in people to help you. Watch yourself for wasted motion during this stage.

Cashflow is the element of momentum that allows you to hand over jobs to other people and do more of your core passion jobs, like creating content or designing new products. This creates more value in your business and increasing cashflow – more momentum.

What you then want is for the momentum to compound, with each new employee or outsourcer you hire to help, to give you get more time to create value and ultimately, increase profits. At this point especially is where you need to watch out for fake work, which thrives in less dedicated hires, outdated cultures, and old work processes.

Recent research indicates that across all business organizations, as much as 50% the work that people do in that stage is just motion not related to their company’s strategies. Think of the drag this can put on your momentum.

Starting a new business is a little like taking off for the first time as the pilot of a new airplane. You need to push that throttle all the way to the dashboard until your knuckles are white, but never forget the relationship between motion and momentum. Are you pushing the right levers?

Marty Zwilling


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Saturday, January 18, 2014

Entrepreneurs Are Winning With A New Startup Model

nail-it-then-scale-itI see more and more entrepreneurs who seem to have everything going for them – vision, motivation, passion, even a good business plan, product, and money, and yet they can’t close customers. Maybe it’s time to look harder at the mantra of a new breed of gurus and successful entrepreneurs, including Steve Blank and Eric Ries, called “nail it then scale it” (NISI).

You can review all the specifics of this approach in a book by Nathan Furr and Paul Ahlstrom, appropriately titled “Nail It then Scale It: The Entrepreneur's Guide to Creating and Managing Breakthrough Innovation,” but I will net it out here. I found their five phases of the process to be compelling, based on my own years of experience mentoring startups:

  1. Nail the pain. Great businesses begin with a customer problem that has a big and monetizable pain point. Avoid the three big mistakes, of guessing but not testing the pain (on real customers), selecting a low customer pain (solution is only nice to have), or selecting a narrow customer pain (small number of customers willing or able to pay).

  2. Nail the solution. Neither breakthrough technology nor maximum features will assure that “if we build it, they will come.” In fact, NISI recommends starting with the minimum focused set of features and technology that will drive a customer purchase. Success demands testing the solution early and quickly in the market, then iterating to get it right.

  3. Nail the go-to-market strategy. In parallel with nailing the solution, you need an in-depth understanding of your target customer’s buying process, the job they are trying to get done, the market infrastructure, and a stable of serious pilot customers. Do real tests with real pricing to see if customers will pay you, without being pushed.

  4. Nail the business model. Leverage your customer conversations to predict and validate your business model. For example, when you think about distribution channels, revenue streams, or the relationship with the customer, ask customers what they expect. Don’t forget a viable financial model of costs, margins, customer acquisition, and break-even.

  5. Scale it. Don’t attempt to scale it until you have a proven repeatable business model that predictably generates revenue. Only then is it time to focus on the get-big-fast strategy, and the transformation of three key areas from startup to a managed growth company. These areas include market, process, and team transitions.

These pragmatics and points of focus can effectively counter three core myths which trap too many enterprising and capable entrepreneurs today:

  • Hero myth: Why believing in your product leads to failure. All too often, founders fall in love with their products or technology, ignore negative feedback from customers, and spend years building a product based on a vision that no one else shares.
  • Process myth: Why building a product leads to failure. Conventional wisdom is that after a great idea, the next steps are raise some money, build a product, then go sell the product. This doesn’t work when attacking unknown problems with untested solutions.
  • Money myth: Why having too much money leads to failure. The old saying that “it takes money to make money” isn’t so simple. Money allows entrepreneurs to execute a flawed business plan far too long, rather than stay focused on the market and adapt.

At the heart of it, to be a successful entrepreneur you have to be totally customer centric, and learn to change and adapt as fast as the market. The pace of change in the marketplace is escalating, so entrepreneurs have to improve their ability to deal with change.

At the same time, more entrepreneurs are jumping into the fray, and less money is available from investors. It’s time for a new startup model. In my view, savvy “super angel” investors such as Mike Maples, Jr., and leading incubators such as Y Combinator, are already on this one. How far behind is your startup?

Marty Zwilling


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Friday, January 17, 2014

How To Balance Business Risk Versus Opportunity

Tom-PanaggioThere is no real business opportunity without risk. Serious entrepreneurs know that, but too many “wannabes” still fall for that elusive dream of a get-rich-quick scheme with no risk. As an active Angel investor, I still hear entrepreneurs asserting large opportunities with minimal risk or no competition. My conclusion either way is that there is no market, or they haven’t looked.

According to a new book by serial entrepreneur and former race car driver Tom Panaggio, “The Risk Advantage: Embracing the Entrepreneur's Unexpected Edge,” smart business owners embrace two essential risks to every opportunity – decision and change. First, they decide on a direction to jump, and then they make adjustments and innovations to keep going and growing.

In simple terms, the way you balance risk and opportunity is to look at both as two sides of the same coin. Obviously you are looking for the opportunity side to be bigger than the risk side. Great entrepreneurs have learned how to realistically assess and manage both sides of the coin in the following business opportunity and risk categories:

  1. Strategic. Visionary entrepreneurs tend to identify and map strategic new opportunities, rather than grow existing current ones, based on market insights emerging technology. The risks in new opportunities are usually not evident, so the challenge here is to reduce the probability that the assumed risks actually materialize and to improve the company’s ability to manage or contain the risk events, should they occur.

  2. Financial. Both risks and opportunities in this area can arise from many aspects of your startup, before and after product development. First you need to assess the risks and value of investor funding and carrying debt. Then you walk the delicate balance between burn rates, revenue flows versus expenses, investment in marketing, and employees.

  3. Operational. Once a business is operational, the opportunity can be maximized, and risk managed through best-of-breed processes, and a rules-based control model. Examples are the risks from employees’ unauthorized, illegal, unethical, or inappropriate actions and the risks from breakdowns in routine processes.

  4. Growth. The way you scale your business is a huge balancing act between risk and opportunity. You can grow organically, or stretch out with big capital investments for volume and reach. Grow too fast, and risk quality and delivery ability, or go slowly only to be overtaken by your competitors or a new technology. Find the balance.

For entrepreneurs, both Panaggio and I agree that the first step is adopting a winner’s mindset, and not become a prisoner of hope. When entrepreneurs become prisoners of hope, they look for others to solve their problem. After that, the key is to embrace risk, rather than fight it, which gives you the real advantage:

  • Embrace the risk of failure. Every entrepreneur must realize that failure is not defeat, but a signal that it is necessary to invoke the two essential risks: decide that change is necessary, and change. Every investor believes that entrepreneurs learn more from failures than from successes. Short-term failures lead to long-term successes.
  • Embrace the risk of proactive marketing. Marketing is fraught with risk, but playing it safe or no marketing is the ultimate risk. Proactive marketing is a marketing strategy that focuses on one objective – to generate customers now. Look at marketing as an investment, not an expense. Risk being known for who you are, as well as what you sell.
  • Embrace the risk of standing in your own line. All entrepreneurs should face the risk of being one of their own customers, by using their own products and standing in their own customer service lines. Only shortsighted leaders assume that customers have unreasonable expectations, or their demands will increase once you have a relationship.

Embracing risk and learning from your mistakes really is an entrepreneur’s edge, since only startups and small businesses can afford to fail quickly, maybe multiple times, and all the while having the ability to pivot quickly to achieve success. In fact, these are the keys to balancing risks against the opportunities. When was the last time you felt your business was in balance?

Marty Zwilling


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Tuesday, January 14, 2014

Digital Tools May Soon Make Business Cards Obsolete

digital-business-cardsIn a second, with Google, I can find a phone number that was assigned to you ten years ago, but it takes me an hour to find your phone number on that business card you gave me last week. That’s just wrong. We need instant access to the most important of all resources: current contact info.

Too many of us have piles of business cards scattered around the office and home, as well as additional contacts on your smartphone, iPad, Outlook, LinkedIn, and Facebook. The result is we can’t find key names and phone numbers quickly when we really need them, and the data is outdated for the ones we do find.

The solution is simple to define. What we all need is a digital tool that can extract data from business cards, as well as sync it with your cell phone, your email, and the social networks you use. It needs to have great search and display capabilities as well as spreadsheet-like sorting so you can look at the information in various ways. Finally, we want it cheap (of course).

My old rolodex for 1000 business cards doesn’t do the job anymore, so I’ve been scouting around for something better, looking at the pluses and minuses. There is a wealth of new alternatives, but no universal solutions:

  • Bump. Here’s a new free smart phone app that came out a couple of years ago, but doesn’t seem to be catching on. It allows users to simply tap their phones together, and with the right setup, they will exchange contact info. I predict Near Field Communications (NFC) will soon be pervasive on smartphones, so you won’t even need the bump.
  • CamCard. With today’s smartphones, card scanning means taking a picture of a card, automatic trimming, optical character recognition, and cutting and pasting into Contacts (phone or Google). Another variation is an iTunes app called ScanBizCardsLite, which scans card images and extracts them into Contacts.
  • Jumpscan. This smartphone app places all your contact information into a single QR code image. Anyone with one of the many QR code scanning apps on their phone can take a photo of your code to be taken directly to your contact information. You don’t even need your own copy in Contacts, since it’s always obsolete when you use it later.
  • CardScan Personal. Here is the old standby low-end hardware-based solution – a simple business card scanner for $225, with software to synchronize the data with Outlook, Windows mobile devices and smartphones. That doesn’t address social networks and other lists you may have.
  • Shareware. I found dozens of software packages available on the Internet for free download, or a nominal price. Several of these have good reviews, including PIMEX, Diasho, Enhilex, and Advanced Contact Manager. My experience is that shareware software is usually worth what you pay for it.
  • Commercial software. There are hundreds of other alternatives and add-ons out there, like Quickbooks Customer Manager, Personal Information Manager, Beyond Contacts, and Goldmine. They range in price from $150 to over $4000, but check each for the features important to you.

Social networks have added additional layer of complexity to this challenge. LinkedIn supports the export of connection contact information to Outlook and Gmail, with no special software required. Facebook, however, does not provide this interface, and has specifically prohibited applications from being offered to solve the problem. They consider such data proprietary.

Even email is a problem. You need to capture contact details beyond the email address from email contents, including signature blocks. I did find a package named Copy2Contact, which can save you lots of cutting and pasting. Now if everyone included contact information in every email, I wouldn’t need to bump smartphones with you periodically to stay current.

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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Monday, January 13, 2014

A Valid Business Model Requires Real Customer Sales

dogs-eat-dogfood“Will the dogs eat the dog food?” This rather crude expression weighs heavily on the mind of all good startup founders, no matter how confident they appear. We all know the products they give away, and the ones purchased by family and friends don’t count. The real milestone, proving the business model, is that first product sold for full price to a total stranger, leaving him happy.

So what can you do to expedite this event, or even improve the odds that it will happen at all? Of course, one sale isn’t really enough, so you need to get the first customer to recommend you to a second, and make sure the rate of sales ramps up quickly enough to keep the business alive and growing.

This whole process is particularly worrisome to many startup founders, since their expertise and background more likely technology than sales. If you are one of those, here are some basics principles you should follow and live by until that milestone is behind you:

  • It’s the market, stupid. I still see too many entrepreneurs who build a product and spend lots of money because THEY are in love with the idea or technology. There is no substitute for good market research, talking to experts, analyzing the competition, and listening to potential customers from day one.
  • Sell what you have, not what you dream. Customers don’t buy the impossible dream. I believe in pre-selling and early marketing, but make sure you don’t oversell what you can deliver. I recently knew a founder whose sales pitch was always the next generation of his product, and he never understood why customers always decided to wait.
  • Your revenue model has to make sense. If you lose money on every sale, it’s hard to make it up in volume. On the other hand, if your price is over the moon, even the best product features probably won’t sell it. Many of the Internet business plans I see these days say the service is free, and revenue will come later from a huge user base. You need deep pockets to make this one work.
  • You need a sales channel that works, and one you can afford. Even with the global reach of the Internet, selling your first product from your website will likely not be much of a business. To get the reach you need probably requires one or two levels of distribution, partnerships, or joint ventures. Direct sales are too expensive, and word-of-mouth is too slow.
  • A product, without customer support, is not ready for sale. Remember that your ultimate goal is satisfied customers, not just the best product. The sales process has to be smooth, the customer support impeccable, and the customer-facing people delightful and empowered.
  • Selling is a learned skill, and takes effort, just like building a product. Everyone in your startup needs to understand sales, and needs to be a salesman. Don’t assume that only “fast talkers” are good salesmen, or that you can hire a good salesman at the last minute to sell your product. The best salesmen know their products and their customers better than anyone else, and they believe in both. That should be you.

I’m certainly not suggesting that you wait until all these items are perfect before you open your doors. If you do that, you will never achieve this milestone. The real job of an entrepreneur is to manage the right variables, with the right level of risk, to get and stay just one step ahead of their competitors.

What I am suggesting is that you laser focus on that first real customer from the very beginning. His real requirements might keep you from getting sidetracked by all the neat features your technology could deliver, and your dreams of delivering the perfect product. What you really want is a successful business and all your customers to be happy puppies.

Marty Zwilling


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Sunday, January 12, 2014

We Need Entrepreneurs Who Can Drive Global Change

teslaBy most definitions of the term, an entrepreneur is someone who starts a new business, incorporating innovative changes to existing products, services, business models, and creating new markets. Yet very few achieve that great aspiration of really driving economic, social, and environmental changes on a global scale.

What does it take to get to that level? One way of identifying the right characteristics and approaches is to take a hard look at entrepreneurs who have done it. Peter Andrews and Fiona Wood, in their new book “Überpreneurs” have profiled 36 leading candidates for this category, to extract a set of common characteristics. Here are some recognizable entrepreneurial examples I like, just from the technology space:

  1. Driven by an epic ambition. Each of them has seen and seized opportunities for change, sensed the way forward, garnered the necessary resources, and pursued their dreams, regardless of the odds. All of them, in the late Steve Jobs’ words, “push the human race forward.” He agreed with Mark Twain on keeping away from people who like to belittle your ambitions.

  2. Opportunistic and visionary. They must be constantly on the lookout for new ideas and intuitively grasping their potential implications, seeing and seizing opportunities for change. Bill Gates telephoned Ed Roberts, the man behind the first microprocessor, to offer a BASIC software package that he and Paul Allen had not yet written because he knew that one day there would be “a computer on every desk and in every home.”

  3. Innovative yet pragmatic. Überpreneurs are willing and able to jump organizational, cultural, and geographic boundaries as they sense their way toward novel but practical solutions. Mark Zuckerberg envisioned Facebook as a virtual social network built on a lifetime of friendships, while offering advertisers a powerful and targeted marketing tool.

  4. Persuasive and empowering. Offering irresistible investment propositions and attracting talented and loyal followers is key, as they garner the resources to pursue their goals. Larry Page of Google piqued the interest of venture capitalist John Doerr with an outrageous revenue estimate of “$10 billion,” a target that was met in less than ten years.

  5. Focused and confident. All are indomitable spirits who assume total control and drive full steam ahead toward the realization of their dreams. Richard Branson once said “My interest in life comes from setting myself huge, apparently unachievable challenges and trying to rise above them.” “I have always lived my life by making lists … Each day I work through these lists, and that sequence of calls propels me forward.”

  6. Resilient and courageous. Taking bold but calculated risks is the norm, learning from their mistakes, and thriving on change and uncertainty as they upend your world, regardless of the odds. Jeff Bezos of Amazon once said that if you are going to do large-scale invention, you have to be willing to fail, think long-term, and be misunderstood for long periods of time.

  7. Consistently produce results. All of them have created massive new capital, be it financial or technological, social or spiritual. All of them have transformed the condition of mankind – for the better. Elon Musk is a South African born Canadian-American engineer, business magnate, investor, and inventor who founded and built PayPal, SpaceX, and Tesla Motors, and is still going strong.

The real question is how do we produce more of these? I don’t see anything genetic here, as these have come from some very diverse backgrounds, with the normal mix of middle-class, upper, and lower economic environments.

My best suggestion, like the authors of Überpreneurs, is that we just teach aspiring entrepreneurs the facts, help them build their networks, supply them with some resources, and simply get out of their way. If you have a better suggestion, I’ll be happy to learn from it.

Marty Zwilling


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Saturday, January 11, 2014

How Entrepreneurs Get Out Of Their Comfort Zone

comfort-zoneChange is about the only thing constant in the world of startups. Despite their own focus on changing the world, they often forget that they too have to change rapidly and often as the market evolves. Too many find that out too late, and are left chasing a rabbit that is long gone.

The solution is to establish and maintain a culture and processes that don’t view change as a discrete event to be spotted and managed, but as an ongoing opportunity to improve competitiveness. Chris Musselwhite and Tammie Plouffe, in an HBR article a couple of years ago on change readiness for large companies, define it as “the ability to continuously initiate and respond to change in ways that create advantage, minimize risk, and sustain performance.”

Since the startup environment is usually more volatile, the challenge there in balancing advantage, risk, and performance, is more critical than in big companies. The following initiatives that Chris and Tammie define for large companies apply just as directly to startups:

  1. Improve change awareness. How good are you and everyone on your team at proactively scanning the environment for opportunities, emerging trends, and customer feedback? This contextual focus is critical to innovation and survival – the right product at the right time.

  2. Increase change agility. Change agility represents a startup’s ability to immediately and effectively engage everyone in pending changes and innovations. It starts at the top with the founder and CEO, but has to extend quickly to the bottom of the organization. This requires leadership, teamwork, and trust at all levels.

  3. Expedite change reaction. This is the ability to appropriately analyze problems, assess risks, and take responsibility for problem-dictated and market-dictated changes, while still sustaining the day-to-day business activities. It’s called the management of unplanned changes, or how well your startup reacts to crises.

  4. Implement change mechanisms. Every organization needs to have specific mechanisms in place to facilitate change, including regular effective communication, reward systems that reinforce desired change behavior, and accountability for results. These won’t work in an autocratic or dysfunctional management environment.

  5. Build a change readiness culture. Change readiness is hard work, and requires creativity sometimes in conflict with task orientation. People have to have the right attitude, and make the choice from the beginning to be ready to change at any time. They need a sense of urgency to handle change, and confidence in their leaders.

  6. Imbue customer change focus. The more everyone in the startup is obsessed with satisfying customer needs and providing better customer service, the more effective the startup will be in adapting to change. Provide direct customer contact to everyone, as well as training.

Experts say that we live in a world where the pace of change is accelerating at the fastest rate in recorded history. On the other hand, change management practices seem to be changing very slowly, resulting in a 70% failure rate of change initiatives. Failure rates this high demand a new mindset and startups are the logical place for this to happen.

For starters, the whole team needs to be constantly trained and encouraged to develop their skills. Relevant skills include continuous improvement of existing methods, processes and devices against a set of quality metrics. The ultimate skills, which lead to innovation and totally new processes, usually come from experimentation and special studies.

In summary, change will happen. If your people and your startup do not change, statistics say you won’t survive. It’s up to you to get out of your comfort zone and make things happen in your startup, rather than let things happen to your business.

Marty Zwilling


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Tuesday, January 7, 2014

10 Startup Shortcuts That Will Be Back To Haunt You

startup-mistakesI’ve been advising and mentoring startups and growth companies for years, and find myself always pushing them to try something new, for the sake of growth and survival. When you try new things, you make mistakes, and I’ve seen many. Smart companies learn from their own mistakes, but some don’t pay enough attention to other people’s mistakes.

In the spirit of saving you a few lifetimes of pain, here are some common mistakes or shortcuts that seem to happen routinely:

  1. Wait until your company is up and growing before you formalize it. Some entrepreneurs can’t decide if they want to be a Limited Liability Corporation (LLC) or a C-corporation, or they don’t have the money, so they put off doing anything until the first venture capital round, or until the first lawsuit occurs.

    The simple answer is to do something, and start simple. In almost every state, you can incorporate as an LLC with a minimal effort, and a cost in the hundred dollar range. This step shows everyone you are serious, and limits your liability on any mistakes. It also forces you to pick a name for your company and put other intellectual property stakes in the ground. It’s not that hard to change later to a C-Corp.

    Company and product naming may also seem simple, but should be a key early effort, because mistakes can be very costly. You may recall the Chevy Nova, a compact car from GM. Pundits in Latino countries quickly pointed out that the name, ‘no va’ means ‘does not go’ in Spanish. Professional advice in this area is highly advised. Cultural and religious implications must be very carefully considered.

  2. Rely on informal agreements with partners. You may all be friends, or spouses, today, but things do change quickly in the stress of a growing company. The same principles apply to strategic partners. Early co-founders often drop out of the picture due to disagreements, and you forget about them, but they don’t forget about the verbal promises you made.

    Later, when your venture is trying to close on financing, or even going public, that forgotten partner surfaces, demanding their original share. This problem can be avoided by incorporating immediately after early discussions, and issuing shares to all founders. I know two former friends who are still killing each other financially years later over an unwritten agreement, remembered differently by each.

  3. Be quick to hire and slow to fire. If you are growing quickly and desperate for help, you may skip on the homework of a proper job description, or validating applicant credentials are a fit before you proceed to interview. The message here is that if you don’t know exactly what help you need, you probably won’t get it. Hiring after one interview is like hopping a red-eye to Vegas to get married after one date.

    Equally bad, you may know what you want, but you are trying to force-fit the candidate into the position. Maybe she’s related to the boss, or you are confident that the candidate will be a good helper, and can learn a lot from you. Helpers are expensive, since it often takes longer to jointly do a job than it would take one qualified person to do it alone.

    On the other end of the process, don’t hesitate to pull the trigger fast when a new hire isn’t working, but don’t forget to be human and follow all the steps. Carrying a non-performing employee probably triples the costs, since you are paying two people to do the job, and at least one other is de-motivated by the inequity.

  4. Only hire people who like you or think like you. Flattery feels good, but it doesn’t pay the bills. Look for the thoughtful challenge to your ideas, and practice active listening, when you are selling your vision. High three-digit intelligence has value.

    Some executives think they can mix business with pleasure, with inter-office relationships. We all have our favorite story on this one. Make it a rule to not fraternize with your employees, and choose your partners wisely.

  5. Be super-conservative on your funding requests. Double-check both the money you need before funding, and the size of investor funding requests. You will be amazed at how many items you forgot to cover, and how fast the cash disappears. You should buffer the first by 50%, and the second by 25%. Severe cash flow problems are a big mistake, and may not be recoverable.

    When you have people and their families depending on you for their paychecks, and you are strapped for money, there certainly won’t be any money for growth. Even if you can find someone willing to help, it may be a very expensive proposition. Cash is more important than profit.

  6. Let your accountants manage the expenses. Too many founders think it’s more important to work on products and customers. In reality, the most important task of every small company CEO is to review every expense with a miserly hand before the money flows out. Do not delegate this task.

    A variation on this theme is promising a burn rate to investors than you can’t deliver. That means managing a bottoms-up budget process, and living within the budget. The result of budget and expense overruns is not only lost growth opportunities, but lost credibility and lost support from investors and vendors.

  7. Make all the decisions yourself. One person making all the decisions doesn’t mean better decisions, and certainly not faster ones. For a company to grow, the team has to grow, and decisions must be delegated. Smart growth companies hire decision makers, not more helpers.

    Even early in the startup process, you need someone like-minded but complementary in skills to help you with the startup plans. It’s always good to have someone to test your ideas, keep your spirits up, and hone your business skills.

    Lastly, make good use of your Board Members. One or two “experts” who have “been there and done that” can head off many mistakes and suggest a calm recovery plan for the ones you make. Resist the ego urge to “go it alone” or to convince yourself that you are smarter than your competitors.

  8. Assume defining the strategy is a one-time process. Your initial strategy will be wrong, no matter how carefully you think it out. Most startups I know have “refined” their target market and “pivoted” their operation several times during their rollout and growth phases. So be alert and be flexible.

    Plan for strategy changes by scheduling an adjustment review every month. Watch out for the unknown, such as an economic recession you hadn’t counted on, or a new competitor with deep pockets, or the changing trends in the industry. Be sure to communicate changes to the team effectively and often, so it doesn’t look like you are making random changes.

  9. Let the daily crisis keep you from the “most important” issues. It takes practice and effort to focus on the most important things first. In business, “most important” means time to market, customer service, low cost, and beating your competitors. It also means knowing when to delegate, when to rest, and reserving time for effective communication with your team.

    If you allow yourself to be driven by the crisis of the moment, you will lose the ability to set priorities and focus on goals. Personal discipline is the key word here. Working in isolation and handling all the issues is fine during the creative phase of the startup, where the founder is often the designer and architect, as well as the builder. Now this same individual has to graduate from short-term thinking to long-term thinking.

  10. Ignore the mistakes of others. The biggest mistake of growing companies is failing to learn from the mistakes of others, or even from your own mistakes. You can only learn from your mistake after you admit you’ve made it. Wise people admit their mistakes easily, and move the focus away from blame management and towards learning.

The list goes on and on. But the reality is that making mistakes is part of every successful growth effort. Therefore, mistakes should be celebrated and learned from. But the one unforgivable mistake you should never make is to repeat a previous mistake.

In the end, ask yourself this question: Is it better to try and fail, or never have tried at all? To grow in the business world, never trying is not an option.

Marty Zwilling


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Monday, January 6, 2014

Lessons For Entrepreneurs From A Navy SEAL

seal_us_navyYou have to be extra tough mentally to be an entrepreneur. While thinking about it, I realized that it’s really not that different from the toughness required and trained into America’s elite military force of Navy SEALs, who are known to be cool under fire, able to sense danger before it’s too late, and never give up on achieving their objective.

I just finished a new book “The Way of the SEAL,” co-authored by Mark Divine, who spent many years with the SEALs, and has since started and built six multimillion-dollar business ventures. He now teaches the key principles to business leaders through his Unbeatable Mind Academy, focusing on the following lessons and strategies, which I recommend for every entrepreneur:

  1. Lead from the front, so that others will want to work for you. To be an entrepreneur or a Navy SEAL, you must first have vision, focus, and the courage to step up to lead. That means visibly walking the talk and willing to clear a path for others. People want to follow leaders they can learn from, who demonstrate excellence and commitment in all they do.

  2. Focus on one thing until victory is achieved. SEALs call this front-sight focus, or the ability to envision your goal to the point that you see it, believe it, and make it happen. Every entrepreneur needs this kind of focus to build a minimum viable product, target the right customer segment, differentiate from competitors, and drive business growth.

  3. Think offense, all the time, to eradicate fear and indecisiveness. Indecision leads to doubt, then the two blend and become fear, which signals defense, resulting in being overrun in the business world, as well as the military world. Offense, for entrepreneurs, means leading with a new business model, new marketing, and new technology.

  4. Never be thrown off-guard by chaotic conditions. Smash the box and think outside the box. In the world of the entrepreneur and the SEAL, chaos is the norm, not the exception. Plan for it mentally and physically, and you will see opportunities rather than problems in the chaos. Winning is finding opportunities, rather than fighting problems.

  5. Access your intuition so you can make “hard right” decisions. Your intuition is really your knowledge and awareness of your business environment, which must be honed with practice and focus. This knowledge is required for you to turn quickly or pivot based on new input from the market, without loss of competitive position.

  6. Achieve twenty times more than you think you can. Set your targets high. Nobody knows what they are truly capable of, with the right discipline, drive, and determination (three Ds). SEALs challenge themselves to find their 20x factor, and entrepreneurs should accept no less of a challenge. Leverage the resources of mentors, investors, and peers.

By teaching and practicing the principles behind these six lessons, Mark Divine was able to improve the pass rate of Navy SEAL candidates from less than 30% to over 80%. I see the same potential for improving the success rate of new entrepreneurs from the current 10-year survival rate below 30%, to a new high target of 80% in this new era.

He suggests that you start with a self-assessment against the “five mountains” to be climbed on the path to self-mastery and success, with my adaptation for entrepreneurs:

  • Physical: business as well as technical skills required for the domain you want to enter.
  • Mental: ability to persevere, make decisions, focus, and visualize success.
  • Emotional: resilience, open to relationships, keep negative emotions under control.
  • Intuitional: level of awareness, listen more than speak, strong self-esteem, insightful.
  • Spiritual: strong values, at peace, willing to make sacrifices, see the big picture.

I agree with Divine that if you desire serious change in your life, you can’t get there by focusing on what you don’t want. Becoming an entrepreneur is a great lifestyle, but it is a serious change from other career alternatives. If you decide to be an entrepreneur because you don’t want a boss, on don’t like regular business hours, you may be setting yourself up for failure.

Apply the lessons from the Navy SEALs and you too can be an elite warrior who leads and succeeds in the new global business paradigm. Are you up to the challenge?

Marty Zwilling


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Sunday, January 5, 2014

8 Ways To Tell If Your Startup Is Ready To Innovate

tata-nanoWhat sparks paradigm-shifting innovation in any business? It’s a special mix of entrepreneur and company, regular in every respect except for having the courage and foresight to make an idea happen that was supposed to be impossible. As an entrepreneur in a startup, how do you know if you have this potential, and what are the steps to get from an innovation to a revolution?

The first step is to meditate on the examples set by others, like Steve Jobs of Apple, Jeff Bezos of Amazon, or Thomas Edison with the electric light. There are many others, like the book I read a while back about Ratan Tata bringing out the Nano car in 2009 in India for less than $2,500. The book is titled “Nanovation,” by Kevin & Jackie Freiberg.

These authors have studied many such examples, and summarize my own perspective on the characteristics of entrepreneurs they call “nanovators,” that produce true, life-changing innovations:

  1. Get wired for innovation. We all agree that innovation is an adventure into the unknown. If you want people to follow, you need to be able to convince them of three things: (1) your mission is worth supporting, (2) you have the competence to build a critical mass, and (3) you have integrity to look out for their best interests along the way.

  2. Lead the revolution. Innovators have more than the vision; they have the drive to lead, and the focus to stay on target. They are wired to win. Organizations don’t produce game-changing innovations; people do. They allow a leap of faith in their own ideas, as well as in the ideas and capabilities of their team.

  3. Build a culture of innovation. You need a culture where restlessness is tolerated, curiosity is encouraged, passion is inspired, creativity is expected, and people are always talking about what’s next. Ultimately, the mind-set changes so significantly that innovation is natural, and no one is conscious of it.

  4. Question the unquestionable. Outsiders ask a lot of questions because they don’t presume to know why something is done a certain way. Make your insiders think like outsiders. Provocative questions like “What if?”, “Why not?”, or “So what?” can help to get everyone outside the box.

  5. Look beyond customer imagination. First-of-a-kind products empower customers to do things they didn’t even know they wanted to do, and now can’t live without them. The computer mouse, Tivo, and Teflon are examples. Listen to customers, but remember that they can’t always tell you what they don’t know.

  6. Go to the intersection of trends. Innovators pay close attention to the early warning signs that precede major cultural, societal, and market shifts. Where most people see an isolated trend, innovators connect the dots by relating one trend to several others. They focus on next practices, versus best practices.

  7. Solve a problem that matters. The key here is to resist the temptation to pay more attention to the technology solution than the problem. Some people create brilliant solutions to non-existent problems, like maybe Segway and satellite phones. These solutions may be nice to have, but won’t ignite a revolution to get there.

  8. Risk more, fail faster, and bounce back stronger. When you pursue a creative idea that takes you beyond, fear tempts you to make compromises. If you can push through this fear and doubt, or bounce back intelligently from initial setbacks, you often arrive at something that has truly never been seen before.

Jeffrey Immelt of General Electric argues that the next big thing, like the Nano, could well be from “reverse innovation,” where instead of industrialized nations adapting their products for emerging markets, innovation in emerging markets will bring new paradigms to home markets. In any case, the future is defined by what we put off until tomorrow, so don’t wait too long to get started.

Marty Zwilling


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