Monday, February 24, 2014

Where To Find The Most Angels To Fund Your Startup

Angel-funding-sourcesIf your startup is looking for an Angel investor, it makes sense to present your plan to flocks of Angels, and assume that at least one will swoop down and scoop you up. Or does it? Actually numbers and locations are just the beginning. The challenge is to find the right Angel for you, and for your situation. Here are some basic principles:

  • Angels invest in people, more often than they invest in ideas. That means they need to know you, or someone they trust who does know you (warm introduction). For credibility, they need to know you BEFORE you are asking for money.
  • Angel investors are people too. Investors expect you to understand their motivation, respect their time, and show your integrity in all actions. They probably won’t respond well to high pressure sales tactics, information overload, or bribes.
  • Angels like to “touch and feel” their investments, so they are generally only interested in local opportunities. It won’t help your case or your workload to do an email blast and follow-up with 250,000 members around the world.

But now to answer one of the most common questions I get “How do I find Angel investors?” With today’s access to the Internet, and Google searches, it really isn’t that hard. Here are the largest flocks:

  1. Gust (formerly AngelSoft). This is perhaps the most widely-used source of information on Angel investor groups across the world, run by the “Father of Angel Investing in New York,” David Rose. This software platform is used by most local Angel organizations for managing deal flow.

    It powers over 1,000 investment Angel and VC groups in 80+ countries. More than 200,000 startups have already used the platform to connect with 45,000 investors. As an entrepreneur, you simply use their investor search engine to find appropriate investors for your business according to location, industry interest and other relevant criteria.

  2. AngelList. This is another very popular website for raising equity or debt investments for startups. It was founded back in 2010 by Naval Ravikant and Babak Nivi of Venture Hacks, which is also a great place to visit for startup advice.

    Although relatively new, AngelList already has featured over 42,000 businesses and provided over 28,000 introductions to potential investors in a format that's, effectively, a social network for entrepreneurs and Angels. They claim to have already raised up to $200 million for startups, primarily in the US and Europe.

  3. Keiretsu Forum. This one claims to be the world’s largest single Angel investor network, with 1,100 accredited investor members throughout 27 chapters on t3 continents. Since its founding in 2000, its members have invested over $400 million in companies in technology, consumer products, healthcare/life sciences, real estate and other segments with high growth potential.

    The Founding Chapter is in Silicon Valley, California, (naturally). A caveat is that this is a for-profit organization, so fees to present may be significant.

  4. New England Investment Network. This is an online platform connecting entrepreneurs based in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont, with Angel investors worldwide. The caveat here is that this network doesn’t have a personal touch, as it only facilitates the exchange of contact information, so the matchmaking is left up to you.

    The reach is very broad, however, with 30 branches worldwide covering over 80 countries in Europe, North America, South America, Africa, Asia and Australasia, and over 500,000 members worldwide, perhaps the largest Angel investment community in the world.

  5. Angel Capital Association (ACA). ACA membership includes more than 200 angel groups and 20 affiliate organizations across North America. ACA member Angel groups represent more than 10,000 accredited investors and are funding approximately 800 new companies each year and managing an ongoing portfolio of more than 5,000 companies throughout North America.

Of course, there are many Angel investors, often called “super Angels,” that have a large following and large reach, so they don’t need any of these organizations to be found. Examples of some leaders in this space include Ron Conway, Mike Maples, Jr., and Dave McClure. Connecting with one of these would be a real coup for your startup.

My real message is that the best Angel you can find is a local high net-worth individual, with whom you or your advisors have an established prior relationship. So get out there and network today, and you can be one of the lucky ones who is touched by an Angel without having to go through hell first.

Marty Zwilling

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Sunday, February 23, 2014

Can Your Startup Flourish Despite Business Chaos?

business_chaosEvery startup founder I know talks about the chaos of their business, which they usually attribute to that burst of growth that is required to get to positive cash flow. They envision a stable environment after that point, and may have convinced themselves that they will be safer and happier with a livable income, maintaining a loyal but flat customer base.

Sadly, this false perception often leads to the death of their business, or at least the end of their tenure as CEO. I “second the message” that chaos never subsides, from a couple of successful entrepreneurs, Clate Mask and Scott Martineau, in their book “Conquer the Chaos.” Your only choice is to live with it, and find a way to conquer it.

Some small business owners hope to reduce stress by keeping their business static, and believe that they can rely on referrals and repeat business to keep a consistent customer set. Even with this, Mask and Martineau present some important reasons why not innovating, or going into maintenance mode, will lead to your demise:

  • Competitors swoop in and take your space. There are always people around with deeper pockets that can find synergy between your space and theirs. Once they see you have developed credible traction, they can grab your space with less cost (meaning lower price) than you had to put into developing it. Don’t count on your IP to save you.
  • Employees stop innovating. Employees are human, and a static known environment is more comfortable than a dynamic one. Innovation requires venturing into the unknown, causing more dreaded chaos. The easiest way to reduce chaos is to buffer all your activities (slow down), define safer generic processes, which spiral down productivity.
  • Your products quickly become outdated. Change is the only constant in a successful business. Technology keeps improving at a rapid rate, so you fall behind in technology, driving costs up, and you become non-competitive.
  • Your income drops. With decreased employee productivity and outdated technology, your costs go up, and income drops. Even great entrepreneurs are amazed at how fast this can lead to a non-recoverable situation.

The only real solution is to conquer the chaos, while continually expanding your reach into the available market, and into the improvements in technology. Conquering chaos requires two key strategies:

  1. Mindset strategy. Your mindset is your emotional capital, bolstered by disciplined optimism and entrepreneurial independence. These give you the capacity to grow your business without getting consumed by it. You need to find ways to replenish these on a regular basis, and find your balance of pain versus rewards to keep your company vital.

  2. System strategies. These are the processes and tools you implement to grow your business and keep it running smoothly and profitably. Key ones include centralization, automation, and follow-up. Again, balance is the key, with some measurements along the way to keep you on track.

Even after you bring chaos under control, you face an ongoing challenge to avoid back-sliding. Once your systems are in place, you have to give yourself the time you are saving. Make sure your own ambition doesn’t send you back into chaos. Don’t fall for the belief that your business will fail without you. Relax, let go, and enjoy the freedom you have earned.

Only now can you become the liberated entrepreneur that you set out to be in the first place. Your business will grow, you will make more money, have more time, more control, more purpose, and less chaos. Do you have what it takes to achieve the real entrepreneur lifestyle?

Marty Zwilling

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Saturday, February 22, 2014

Security And Privacy Are Entrepreneur Opportunities

LifeLock_ITRCWith the Identity Theft Resource Center® reporting a 30% increase in privacy breaches in 2013, there seems to be a growing population out there worried about all the people intent on hurting them. Why is everyone so paranoid these days? My plea to entrepreneurs is to recognize these concerns as an opportunity, to make people’s life better, rather than stoke the fires.

I must be the only one who believes that most of the data gathering in the real world, and on the Internet, is done by businesses to help you find what you want, protect you, and improve your experience, rather than invade your privacy or scam you.

In addition, there is a real business opportunity here for startups. I know companies who collect sensitive data from consumers all the time, and still seem to keep a squeaky clean image (Amazon.com, Ebay). There are others, like LifeLock, who have already built a billion dollar business by providing identity theft services for more than 2 million consumers in all 50 states.

But that is just the beginning of the opportunity to provide or take advantage of the new power and tools on the Internet. Here are a few specifics on how to be part of the solution, without the costs, rather than part of the problem:

  • Put a personal face and address on your site; don’t hide behind an “info” email address.
  • Make your company visible, reachable and responsive through social networks.
  • Market your solution and user benefits, not the mysterious technology behind it.
  • Use video and audio, rather than jargon, abbreviations, and computer lingo on your site.
  • Make navigation simple and consistent, with abundant online help

The good news is that, if your company does it right, it might be another Amazon. There seems to be an insatiable demand from consumers for a better shopping experience, meaning they will pay a premium to a company that can present them a better match in products to their interests, without jeopardizing their good name.

In support of this, despite qualms, consumers seem very quick these days to provide more personal data to get something they want. Young people naively enter their pictures and personal data for fun on social networking sites, ignoring constant feedback from the media that these are bad practices.

I certainly agree that just like in the real world, consumers have to assume that there are always bad groups on the Internet, as well as down the street, trying to rip you off, so stay out of bad neighborhoods, and keep your wits about you at all times. Internet users need to start watching out for themselves, like looking both ways before you cross the street.

The bad news for startups is that your company can lose big if it’s caught in the middle. Last year, the Target retail chain account database was hacked, with personal data of up to 70 million customers stolen, and this black eye won’t soon go away. A few years earlier, PayPal was hit by a scam to get the personal information of its users, and some feel it hasn’t really recovered since.

Sometimes the problem cause is that startups forget the technical standards and quality processes that every Internet rollout must follow to reduce the risk. Don’t take shortcuts on these. I see lots of new software put together on a shoestring as a “proof of concept” – but then gets rolled out to customers “asis” due to lack of time or money to “harden” the product.

What I learned from a panel discussion a while back, sponsored by an association of lawyers, is that lawyers don’t have any answers, and are all too quick to fan the flames of fear and paranoia. They merely highlighted consumer privacy rights, with much hand-wringing about big bad companies that are capturing shopping habits without consumer knowledge on the Internet.

A better approach might be to use your marketing power to tell people that you can now ring their smartphone in front of their favorite store for a special sale, and allow them to “opt in,” rather than surprising them with your new technology. Few people are paranoid about something they want and enjoy.

The best startups start from a painful problem needing a solution, rather than a technology solution looking for a problem. Security and privacy are an opportunity crying for more solutions. Have you looked hard at the potential?

Marty Zwilling

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Tuesday, February 18, 2014

10 Keys To Team Motivation For A Winning Business

team_successSponsored by VISA Business

One of the keys to maximizing the productivity and success of your team, as well as yourself, is motivation. It has been estimated that the average team member at any given time works at less than 50% of his capacity. Thus, mastering the art of employee motivation could double your chances of success over the average competitor.

While there are many books written on this subject, most entrepreneurs I know simply assume that their own vision, motivation, and drive will be adopted and maintained by partners and employees. This is based on a one-hour inspirational talk by the founder or business leader, supplemented a reasonable salary and a dose of fear for good measure.

Unfortunately, it’s not that easy. Motivation has to be a constant priority and tone, focused more on the positive emotional and internal needs of a person, rather than their opportunity to simply make more money. My review of the research indicates that many experts have settled on four R’s for motivation, but I have found ten, and you can probably add a couple more:

  1. Respect. Every professional expects to be treated with respect. We all watch our leaders’ body language, facial expressions, and words for indications of respect and disrespect. Show by your words and actions that you value their role.

  2. Resources. A team that doesn’t have the resources to do their job will lose their motivation rapidly. In a startup, key resources include funding, facilities and tools, and the time to get the job done. The most important resource may be your help and support.

  3. Relationships. Positive social interactions with fellow team members lead to improved job satisfaction and motivation. Inversely, people who are negative and bring negative interpersonal attitudes to the workplace will destroy the motivation of others.

  4. Responsibility. New responsibilities, when done with respect and moderation, prevent stagnation and challenges people to perform at even higher levels. Most people will rise to the occasion, see their progress, and become even more motivated.

  5. Recognition. When you recognize and celebrate individual achievements, large and small, in front of peers, people feel wonderful about themselves. They feel more competent and eager to repeat the success or take on additional responsibility.

  6. Rewards. People need rewards to maintain their motivation, or they will start to feel that the recognition is all “show,” with no substance behind it. Cash incentives are a good start, but even intangible rewards, like lunch with the boss, can be powerful motivators.

  7. Reserves. In the military, an important mission is always backed up by reserve forces. Having backup gives a team confidence, motivation, and a sense of value. In startups, when people are clearly willing to back up each other, everyone’s motivation increases.

  8. Reasons. A good cause can be the most powerful motivator of all. Workers doing assembly-line tasks during World War II were highly motivated because they were helping to win the war. Make sure your team really believes their work has impact.

  9. Reinforcement. When a team member shows increased skills or results, following prior rewards, reinforcing that progress will result in a motivational multiplier. Reinforcement on a regular basis is recognition and rewards on steroids.

  10. Recruiting. People are more motivated when they see “new blood” joining the team. This gives everyone a sense of renewal, additional support, and a fresh perspective. Recruiting is the inverse of layoffs, which reduces motivation in everyone.

In reality, people motivate themselves, and all these dimensions are simply ways to accelerate personal motivation. The key to increasing anyone’s intrinsic motivation is to align the support with things they value. Therefore the first step is to get to know your people, talk to them, and ask them what they are passionate about. Don’t try to guess the answers.

Doesn’t it make sense to use these motivational elements to get that other 50% from your startup team? In addition, these elements will make your business a more enjoyable and exciting place for everyone, consistent with your own vision for being an entrepreneur. When was the last time you really assessed the motivation level at your business?

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, February 17, 2014

10 Top Relationship Strategies For Startup Leaders

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

Jan Yager, Ph.D., an author and speaker on this and related subjects, outlines in her book a while back “Productive Relationships: 57 Strategies for Building Stronger Business Connections.” From my experience and hers, here are ten top relationship strategies, as practiced by Richard Branson and other well-known startup leaders:

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

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

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

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

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

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

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

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

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

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

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

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

Marty Zwilling

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Sunday, February 16, 2014

Pick The Entrepreneur Lifestyle Alternative For You

alternative-entrepreneur-lifestyleYou are an aspiring entrepreneur, eager to dump the corporate grind, and work to the beat of your own drummer, but you can’t come up with that killer idea to save the world. What are the alternatives that will give you the independence you crave, and challenge your business acumen?

Technically, I believe an entrepreneur is anyone who manages his own profit and loss, and doesn’t meet the government tax definition of an employee. Beyond the traditional new product or service model, you can always buy an existing business, purchase a franchise, join a multi-level marketing (MLM) company, or simply go out on your own as a consultant.

Of course there are a million variations which can make the difference, like work at home versus an office, or online versus storefront, but these are secondary to your basic role. In deciding which of these startup models is right for you, the best place to begin is to ask yourself why you want to own a business rather than be an employee:

  • You have the technology to change the world. If you want to nurture a product into full bloom, a traditional startup is your best bet. Of course, you get the challenge of filing patents, developing a product, and defining the revenue model. With an existing business, MLM, or franchise, the technology and process are already set.
  • You really just want to be the boss. If your answer is that you want to own your own business because of the freedom it will bring you to manage an operation, try a franchise or join an MLM. The base organization will define what you have to do, when you do it, and how you do it, but the success is all in the execution. Don’t look for an investor, since they can be the toughest boss you ever had.
  • You want to make lots of money. New startups build from scratch, and go for broke. Many end that way, but a chosen few do make lots of money. Franchises, on the average, make less money than other types of businesses, but they have higher success rates. Consulting businesses rarely scale, so you may do well, but are not likely to make lots of money. MLMs are like the lottery, minimal investment, with low odds of any success, but a few people hit it really big.
  • You are doing it to satisfy someone else. Too many people are running a business because their father always expected them to take over for the family, the spouse has been nagging you to do it for years, or they want to prove something to a sibling or peer. If you have a choice here, at least pick a less risky franchise, or a minimal investment MLM.
  • You're looking for something to keep you busy. If you have startup funds in hand, you are one of the lucky ones who can start or buy any business you want. If you lack hands-on experience, a franchise may be ideal for you, because you'll get help with everything you need to set up your business. On the other hand, if experience is your strong suit, why not highlight and share it through consulting?

Whichever business model you pick, you need to make a serious commitment to the effort, or you will likely fail. I have a friend who starts a new business every couple of years, sort of like a hobby. After a few months, she gets tired of the grind, or runs up against a couple of tough problems, so she rationalizes that the economy turned bad, or someone misled her, and she walks away. A different business model probably won’t solve this problem.

If you still aren’t sure where you fit, I recommend working for someone else for a few years to gain knowledge, contacts, capital, and learn more about yourself. Then take the plunge with one of the above business models. You will soon know whether you are having fun, and that’s the most important criteria for any aspiration. Enjoy.

Marty Zwilling

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Friday, February 14, 2014

Great Entrepreneurs Know How To Manage Setbacks

Steve_Jobs_with_the_Apple_iPadManaging and motivating a team in a startup is more than just using the right interpersonal skills. It’s more than providing recognition, tangible incentives, and clear work goals. A key influencer of satisfaction and motivation, top-ranked by employees, is positive progress and the completion of meaningful work. Sometimes you have to manage progress, not people.

“Busy work” and “grunt work” are deadly terms in a startup environment. So are setbacks, project cancellations, and frequent changes of direction that make people doubt that the work they are doing will ever see the light of day. These points are illustrated in detail a while back in “The Progress Principle,” a book from the Harvard Business School, by Teresa Amabile and Steven Kramer.

They explain that work progress and setbacks matter so much because one of the most basic human drives is toward a person’s belief that he or she is individually capable of planning and executing the tasks required to achieve desired goals (self-efficacy). Steve Jobs had his share of setbacks, but he never let those dampen his team enthusiasm.

Negative events cause uncertainty, doubt, or confusion in people’s sense of themselves, and lowers their motivation for the work. In fact, an analysis of thousands of detailed logs from employees show that setbacks have more power to sway work satisfaction than progress:

  • The effect of setbacks on emotions is stronger than the effect of progress. The power of setbacks to diminish happiness appears to be more than twice as strong as the power of progress to boost happiness. The power of setbacks to increase frustration is more than three times as strong as the power of progress to decrease frustration.
  • Small losses can overwhelm small wins. The asymmetry between the power of setbacks and progress events appears to apply even to relatively minor triggers. Similarly, small everyday hassles hold more sway than small everyday assists. Any manager’s job description should start with facilitating subordinates progress every day.
  • Negative leader behaviors affect work satisfaction for everyone. Managers should avoid actions that negate the value of work in progress. One way is dismissing a team member’s work, or changing priorities arbitrarily, or inadequate communication. Don’t assign people who are clearly unqualified, or over-qualified, to a task.
  • Failure to facilitate progress and remove obstacles. Consistent daily progress by individual employees fuels both the success of the organization and the quality of those employees inner work lives. This progress principle should be the driving force and the number one objective of every leader.
  • Other types of negative events – not just setbacks – are more powerful than their mirror-image positive events. Based on employee logs, the connection between mood and negative events is about five times stronger than the connection between mood and positive events. Employees recall more negative leader actions than positive actions.

People often say, “it’s business, it’s not personal.” But work is personal. If people feel capable, then they see difficult problems as positive challenges and opportunities to succeed. Put another way, they develop a “sense of empowerment.” This need grows throughout their career as people compare their achievement with those of their peers as well as their own “personal best.”

As an example, entrepreneurs often have great difficulty relinquishing top leadership positions when their companies have grown beyond their own management capacities, because they have invested so much of their personal identities in what they have built.

In many cases, only you as the founder can remove barriers to progress, such as meaningless tasks and toxic relationships, before they disrupt employee motivation and productivity. Only you can activate the positive forces that enable progress, including “catalysts” and “nourishers.” Start today in your own startup, to eliminate the negatives, as well as accentuate the positive.

Marty Zwilling

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Monday, February 10, 2014

Entrepreneurs Need Experience More Than An MBA

harvard-business-schoolI don’t have an MBA. I used to fear that this would put me at a disadvantage in starting my own company, but now I’m convinced that it may be the other way around. In some reputable surveys, as many as two-thirds of entrepreneurs felt that their entrepreneurial spirit was more ingrained than learned, so a specific education level is at least irrelevant.

For business professionals who aspire to an executive position in a large company, most people agree that an MBA is always positive. It will get you a higher starting salary, and a valuable edge in your credentials at every promotion opportunity. In fact, BusinessWeek reports that roughly 40 percent of the S&P 500 chief executives have MBAs in any given year.

On the other hand, I had trouble thinking of famous entrepreneurs with an MBA. With a little research I found a few notable names in relatively recent businesses, although each of these actually started with some big-company experience:

  • Fred Smith, chairman and founder, Federal Express. Smith is a legend among MBAs because he developed the hub-and-spoke delivery concept in a business case at Harvard Business School. The company now has more than 160,000 employees and revenues of $44 billion. He built an overnight competitor to the U.S. Postal Service.
  • Meg Whitman, president and CEO of Hewlett-Packard. As an entrepreneur, she grew EBay from 30 employees and $4 million in annual revenue to more than 15,000 employees and $8 billion in annual revenue, before moving on to HP. She is a graduate of Princeton University and has an MBA from the Harvard Business School.
  • John Scully, former CEO of Apple. He has an MBA from the Wharton School of Business. During his ten-year tenure, Apple's sales increased from $800 million to $8 billion. Yet he was ultimately replaced a one-semester college dropout, Steve Jobs, who was the original founder. Sculley is currently doing well, despite his setback at Apple, as a partner in Sculley Brothers, a private investment firm formed in 1995.

These probably feel that their MBA was worthwhile. But I’ve found so many on the other side, like Mark Zuckerberg of Facebook and Steve Jobs, who dropped out of college to start companies, and succeeded anyway. So here's my net on how an entrepreneur should look at an MBA:

  1. If you are already an entrepreneur, more education, including an MBA, will only slow you down. Consider it a waste of time.

  2. If you plan to become an entrepreneur, and already have business experience or an undergraduate business degree, skip the two-year delay and cost of the MBA.

  3. If you have a technical career with no business background, and you want to start your own business, an MBA can be a blessing by giving you the basic knowledge you need to manage your business.

  4. If you are still in school, and contemplating an MBA before stepping into the entrepreneurial world, go for it. An MBA will extend your education more broadly into the world of business strategy, and give you more credibility with potential investors.

What’s different about the entrepreneurial environment? Many people argue that it has to do with the requirement for entrepreneurs to use “effectual” reasoning, compared to “causal” reasoning taught by most of the major business schools.

According to Professor Saras Sarasvathy, who teaches entrepreneurship at the Darden Graduate School of Business, causal reasoning begins with a pre-determined goal and a given means, and seeks to identify the optimal way to get there. Effectual reasoning, on the other hand, begins with a given means and allows goals to emerge based on situational dynamics.

That’s all a bit academic, so for me an MBA is not gold. But I have to admit that I feel blessed when I’m invited to guest lecture at MBA classes at one of the local universities. As in all my articles, I always hope to add a dose of reality to the theory, and make some gold for entrepreneurs and executives alike. But I’m always open to learning from you as well.

Marty Zwilling

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Monday, February 3, 2014

5 Keys To Effective Entrepreneurial Team Mentoring

RichardBransonMentorI’ve always wondered why every executive meeting has to be one hour in length, or longer. That’s probably a tenth of your day spent on one issue. It better be a critical one, because you have a hundred others waiting. I believe you can be much more productive, as well as a more effective leader, if you approach most meetings as mentoring opportunities, and limit them to five minutes.

In a traditional meeting, another person presents you with multiple options, and you make the decision. With the five-minute mentoring approach, the mentee asks for your support in their decision, or asks for your insight on the considerations for them making a future decision. Which approach do you think is more fulfilling for them, and best for your company in the long run?

The time limit has more to do with setting an expectation that the meeting is not for solving the problem, but coaching on the parameters and the approach. If you are a problem solver by nature, like Richard Branson,  this requires you to change your mindset from giving the “answer,” to helping someone else understand the process, and come to an even better solution.

I have used this approach with high-tech roles, like software design, as well as business development roles. It works, but in all cases, to be a successful mentor, there are some key things you have to do:

  1. Be available always. If you are “too busy” most of the time, or locked behind closed doors, no mentoring relationship can work. It has to be evident to the mentee that this relationship is important to you, and you will make short periods of time available on a moment’s notice as required. If you often make people wait, they will take extra time, which will make more people wait longer and later.

  2. Adapt to each individual learning style. Start by open listening. Some people learn best from anecdotal stories, and others need concrete pointers and step-by-step instructions. Respect each mentee’s desire to grow and honor their individual style. Remember that five-minute listening is not the same as five-minute mentoring.

  3. Respect discussion confidentiality. Mentor discussions must remain confidential, so both parties can talk freely to each other without being quoted around the water cooler later. The mentee must not be afraid to show false starts or a naïve perspective.

  4. Provide honest and constructive feedback. Personal attacks and emotional comments are not appropriate, but people need real feedback to learn. Set the context by clarifying your goals and expectations on a regular basis. Critique the work and not the person.

  5. Hold the mentee responsible and accountable. Encourage the mentee to generate their own solutions, and make it clear that they must accept full responsibility for their personal choices. Good people won’t want it to work any other way. Most people learn best from making mistakes, so you have to let them fail sometimes.

I’m definitely not proposing the “traditional” style of mentoring, where the goal was a one-way transfer of a broad range of knowledge or information. Here the mentor was the authoritarian source, and directed all other aspects of the mentoring relationship. The mentee was a passive recipient and often had little say or control in the relationship.

Today’s learner-centered mentoring is a dynamic and two-way relationship that involves critical reflection and full participation in short period increments by both partners. The mentor assumes a role of a facilitator. The mentee becomes a proactive and equal partner, helping direct the relationship and set its goals.

The primary responsibility of a startup founder is to provide vision and leadership. Use five-minute mentoring as one tool and stick to it with unwavering zeal. There's nothing worse than getting off course and entering areas that lead you away from the primary track. Your greatest contribution is maintaining focus and guiding the team. Give it a try. You’ll get your time back and real respect.

Marty Zwilling

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