Friday, September 19, 2014

10 Entrepreneur Beliefs That Defy The Stereotype

Page brin_by_origaMost people agree that entrepreneurs have to think differently and take risks to have much chance of building a successful business. Yet I have found that serious entrepreneurs usually go way beyond these platitudes in their actions and thinking, and often won’t volunteer their real views, for fear of alienating “regular” people, and being branded a fanatic.

In his book from a while back “The Entrepreneur Mind,” by serial entrepreneur Kevin D. Johnson, he outlines 100 essential beliefs, insights, and habits of serious entrepreneurs. Most of these are predictable, like think big and create new markets, but I found a few, like the ten below, that will likely raise the hackles of many people outside this lifestyle, and many “wannabe” entrepreneurs.

Yet, based on my own years of experience “in the business”, mentoring many entrepreneurs, and following stalwarts like Larry Page and Sergey Brin of Google, even these potentially controversial mindsets ring true to me:

  1. All risk isn’t risky. Entrepreneurs surely understand the high probability of failure, but they don’t necessarily like to gamble. Instead, they take calculated risks, stacking the deck in their favor. They must have enough confidence in themselves, supplemented by expert knowledge, solid relationships, or personal wealth, to see the risk as near zero.

  2. Business comes first, family second. This view isn’t a selfish one, but a recognition by serious entrepreneurs that family well-being is dependent on the success of the business, not the other way around. This is why airlines ask you to put on your oxygen mask first. Should you forego closing a million dollar deal to attend a ball game with your son?

  3. Following your passion is bogus. Look for a good business model first. Your passion may be for a good cause, like curing world hunger, but it may not be a good business. In any young business, you inevitably find things that are not enjoyable, but need to be done, like cold calls or firing unproductive employees. Just doing fun things is a myth.

  4. It’s not about being your own boss. Great entrepreneurs aren’t interested in being bosses at all. People who crave the freedom to do what they want when they want generally make terrible entrepreneurs. In order to be a successful entrepreneur, discipline is a must, and accept your new bosses as investors, partners, and customers.

  5. Fire your worst customers. We have all had customers who take advantage of us, to the detriment of other good customers. The best entrepreneurs are quick to make the tough decisions to bypass bad customers, with proper respect, to minimize frustration, resource drain, and reputation loss. You can’t please everyone all the time.

  6. Ignorance can be bliss. It’s great to be highly familiar with the industry in which you plan to compete, but many times people see too many challenges, and never start. In other cases, entrepreneurs are opening up new business areas, so no one yet knows the challenges. Serious entrepreneurs trust their ability to beat a new path to the opportunity.

  7. You’re in no rush to get an MBA. If you are already an entrepreneur, more education, including an MBA, will only slow you down. Consider it a waste of time. 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.

  8. You are odd, and it’s OK. Entrepreneurs, especially those in technology, usually don’t start out as well-rounded, well-adjusted leaders. In fact, being odd is quite the norm. According to other studies, attention-deficit disorder (ADD) is common, as well as host of other personality disorders. It’s actually cool to be a geek in this lifestyle.

  9. A check in hand means nothing. Every entrepreneur remembers their na├»ve days when that first customer check bounced. When you receive a new purchase order, a check, a verbal agreement, or even a written agreement, don’t get too happy and excited. Save the celebration until you have cold cash in hand, or the funds are verified.

  10. There’s no such thing as a cold call. If you are an elite entrepreneur, you don’t go into anything cold. With the Internet and a plethora of other resources, you can warm up any call quickly, and not waste your time or theirs. Doing your homework first is one of the best ways to get an advantage over your competition.

If you think Johnson is on the right track, see his book for 90 more challenging insights. Even if you disagree with some of these, try to open your mind to the value of the seemingly backward way of thinking required to be a great entrepreneur – others seek refuge, they take risks; others want a job, they want to create jobs; others follow the market, while they define the market.

Have you caught the entrepreneur bug yet? If so, prepare for a lifetime commitment, and learn from the elite. There is no turning back.

Marty Zwilling


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Wednesday, September 17, 2014

Entrepreneurial Leadership Can Save Any Business

Chris-RoebuckOne of the realities of being an entrepreneur is that you have to keep learning and changing to survive. Everyone on the startup team knows there is no buffer, and no personal isolation from impact based on your job description that can save you. Thus everyone has to make sure they are focusing on what is important, and making leadership decisions to save the business.

That is what business leadership is all about. Unfortunately, in mature companies, a larger and larger percentage of employees forget company survival and customers as the objectives, and focus only on their own personal gain. Risks to the business drift off their radar screen, resulting in poor business decisions, as well as less job satisfaction and declining professional success.

I recently finished an insightful new book exploring these issues, “Lead to Succeed: The Only Leadership Book You Need,” by Chris Roebuck, an expert on transformational leadership. I have worked in both large companies as well as startups, and I have seen first-hand the positive impact of the entrepreneurial leadership principles that he highlights:

  1. Total focus on delivering to the customer. Every startup team member is close to the customer front lines, so they see how every function does or does not add value to the service they give to the customer. People in larger organizations move away from day-to-day contact with the end customer, and focus becomes company internal and isolated.

  2. Optimizing risk, not minimizing it. Calculated risks must be taken to enable change, to improve, and meet new customer needs. Minimizing risk will eventually cause any company to fail. Mistakes will happen, so the objective should not be to eliminate all mistakes, but to catch them before they create disasters, and become repeatable.

  3. Constantly being creative and innovative to get better. Mature organizations forget that change is an opportunity, not a threat. Yet nothing stands still. Change allows everyone to be push the limits in response, to improve their opportunity for personal growth, improve the company competitive position and odds for long-term success.

  4. Taking personal responsibility for organizational results. The attitude that creeps into big companies is that individual employees have no results responsibility outside their own objectives. This causes company-wide inefficiency, poor communication, and poor alignment, and also tends to reduce the effectiveness of every individual leader.

  5. Understanding the wider picture. To get individual and team performance to the highest level, everyone has to be committed to the organization’s vision, values, and strategy, just as much as their personal objectives. An attitude of no responsibility outside of individual objectives is almost always detrimental to the company.

  6. Keeping things simple. Over time, people in large organizations tend to make things more complicated than they need to be. This may be to impress others with their expertise, or their desire to minimize risk. Entrepreneurial leaders know that complexity actually increases risk, as well as mistakes, and ultimately reduces customer satisfaction.

  7. Inspiring people around you with a clear vision and target. People need a customer-driven vision and some form of end destination to give meaning to why they do things, and engages them beyond their internal view. They also need step-by-step targets to help them visualize the journey to that destination, and see that it’s possible to achieve it.

In fact, large organizations need entrepreneurial leadership and thinking just as much as startups. The challenge to build and maintain this perspective is the same everywhere. It has to start with leadership from the top, hiring people with the right skills, giving them the right training and tools, and motivating them with the right leadership objectives, compensation, and growth opportunities.

I’m convinced that we are entering a new era of the entrepreneur. The cost of starting your own company is at an all-time low, and all the information and tools you need to lead are readily available on the Internet. More and more people are doing their own thing, freelancing, working from home, and starting their own companies.

But this doesn’t mean that everyone should start their own company to be an entrepreneur. Entrepreneurial leadership and thinking like an entrepreneur have just as much value, both to you and to your company, in big organizations as well as small. You can lead to succeed wherever you are. Do it now.

Marty Zwilling


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Monday, September 15, 2014

Startups Need To Capitalize On Every Conversation

business-conversationWhether you are trying to motivate your team, close a deal with a customer, or get funding from an investor, a casual conversation is usually a waste of your valuable time. These result is a founder who is always “too busy,” but never seems to get the business done and the team moving. All real business is conversations focused on creating results.

Shawn Kent Hayashi, in her recent book “Conversations That Get Results and Inspire Collaboration” makes my point very well as she outlines the top twelve types of conversations that relate to working together in business, and provides tips on how to make each of them more effective for all concerned:

  1. Conversation for connection. Connecting with others happens when we slow down our talking enough to be in the present and really listen to one another. Rapport building requires listening, more than talking. Powerful listening causes trust to grow.

  2. Conversation for creating new possibilities. The questions a manager or colleague asks help us to understand a situation better, if we ask good questions and really listen to the answers. Conversations can also be the triggers to professional development.

  3. Conversation for structure. When we know what we want to create, the next step is to devise a plan. We build our plans with the steps as we become aware of them through conversations, with ourselves as well as with others.

  4. Conversation for commitment. For each identified action step, we identify potential candidates and then seek their commitment to produce the result that corresponds to the task. The commitments we make to ourselves are the most fundamental.

  5. Conversation for action. What actions will make your tasks and goals come alive? We’ve all seen people get stuck in a project because they do not know what to do next. They’re not asking themselves or anyone else the right questions, and not listening.

  6. Conversation for accountability. After a conversation for commitment has occurred and the expectations are clear, being accountable for engaging others in what you want to do is a sign of respect. Sometimes people need to be guided into better outcomes.

  7. Conversation for conflict resolution. Many people will avoid conflict in work relationships at all costs, which is nonproductive. Others feel fear when the smell of conflict arises. A few overuse this conversation type. Conflict is normal, so deal with it.

  8. Conversation for breakdown. Anger indicates that something or someone has crossed one of our boundaries, and is a signal to address the issue. Breakdown recognition is vital to moving forward. Asking for what we want might actually clear up the breakdown.

  9. Conversation for withdrawal and disengagement. It is unrealistic to think that all work relationships will be enjoyable or friendly forever. Often it is best to end a tenuous connection, so that we can invest our time in ones that are meaningful and productive.

  10. Conversation for change. Your ability to change the direction of an individual, team, or an investor occurs through conversations. By design, you can change the conversation in the office, at board meetings, and with peers who seem to have gone off track.

  11. Conversation for appreciation. Think of the last time you felt really appreciated at work. Undoubtedly someone showed appreciation of your efforts using language that works for you. Affirming others through conversation builds relationships and momentum.

  12. Conversation for moving on. You have conversations for moving on when leaving a community or transferring or retiring from a company. One day you might reconnect, but for now you have closure, with no expectations of future conversations.

Being successful as an entrepreneur begins in a conversation with ourselves first, and then extents to others, focused on what we are passionate about, and the solutions we are bringing to market. None of these are casual conversations, where you don’t really listen to the response. How committed are you when someone is obviously not listening to your responses?

Marty Zwilling


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Sunday, September 14, 2014

Dread Startup Problems Or Learn To Enjoy Challenges

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

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

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

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

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

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

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

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

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

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

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

Marty Zwilling


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Saturday, September 13, 2014

7 Reasons To Think Positively About Competition

Mens_100m_finals_Olympic_TrialsMost entrepreneurs spend far too much time thinking negatively about competitors, and can’t resist making derogatory statements about them to their own team, investors and even to customers. This approach only makes these important constituents question your integrity, intelligence and your understanding of business basics. Pointing out flaws in others does not give you strength.

As an investor, I always listen carefully to what an entrepreneur says, and does not say, about competition. Every business area has competition and every customer has alternatives, so a smart entrepreneur needs to acknowledge these as a positive in defining a big market, and position the features of a new solution in this context. Here are seven key ways to do this:

  1. Frame the competition as manageable. Investors want to see evidence of your sustainable competitive advantage. They don’t want to hear there are no competitors or a long list implying a crowded space. Use three generic categories, and relate your position to a key player in each.

  2. Highlight your positives to suggest competitor shortcomings. Talk about competitors with positive statements about the advantages of your own product. For example, “While product X has worked well in the server market, my product also provides cloud support to drastically reduce IT costs and maintenance.”

  3. Emphasize intellectual property and a dynamic product line. Patents and trade secrets are more powerful advantages than missing competitive features, which might be quickly filled in as you gain traction. Be careful with the first-mover claim, since big competitors have deeper pockets and can accelerate to quickly eliminate your lead.

  4. Demonstrate expertise on the range of competitors. You don’t need to talk about every competitor, but you better know every one just in case someone challenges you. Do your research thoroughly on the Internet and with industry experts and advisors. Build your credibility by presenting information on competitor leadership and team histories.

  5. Become a thought leader on industry evolution. Make it evident that you have learned and evaluated competition from a higher perspective -- meaning the evolution of industry technology and trends. Show that you have thought about indirect competitors and alternative solutions, such as airplane technology versus a better train.

  6. Develop a timeline showing continuous innovation. Make your competitive position a long-term advantage by presenting a timeline of technology evolution, rather than a comparison at the time of first rollout. Investors don’t like an apparent “one-trick pony” or a momentary advantage that can be quickly overcome by smart competitors.

  7. Position your solution in the world market. Every market and every opportunity these days is global, so successful strategies and positioning are done with that in mind. Your rollout needs to be focused and targeted locally in the near-term, but competition needs to be addressed in a much broader, long-term way.

Don’t forget that the primary objectives of every competitive positioning are to demonstrate your business acumen and integrity, as well as the strengths of your solution. Any overly negative comments you make about competitors doesn’t help you on either of these objectives and will kill your momentum with investors and potential customers.

Spot comparisons are also less and less valuable these days, as the market tends to change quickly, and competitors can pivot and recover just as quickly. Remember that smart competitors are likely working on new features with resources greater than yours, and timeframes to delivery that may be shorter.

In addition, thinking positively about competitors is what your customers will do, and what every smart investor or potential business partner does. You have to get on the same wavelength to optimize your solution, maximize your credibility and minimize the competitive risk. Besides, being an entrepreneur who is full of negativity is no fun.

Martin Zwilling

*** First published on Entrepreneur.com on 9/05/2014 ***


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Friday, September 12, 2014

Smart Entrepreneurs Plan Ahead For A Startup Exit

AccentureNYSEThe last thing a new entrepreneur wants to think about for a new startup is how it will end. Yet one of the first things a potential equity investor asks about is your exit strategy. The answer you give can make or break your ability to get an investment, so you need to have the right answer ready before anyone asks. Here are three important reasons for the question:

  1. Good investment paybacks normally require an exit event. Equity investments are not loans, so there is no loan payback period or interest payments. Equity is stock, but private company stock has no market value until the company goes public or is sold or merged with another company. These events may take three to five years at a minimum.

  2. Startups with no exit planned will minimize investor returns. If the entrepreneur plans to grow the company into a family business, or keep it private, they will either never be interested in buying out investors, or will certainly not be motivated to provide the 10x return that investors are looking for. Investors hesitate to invest under these conditions.

  3. Most entrepreneurs like the startup role, but not the big-company role. Investors know that the fun of a startup turns into managing production processes, sales processes, and personnel in a few years. You probably will do that job poorly, unless you plan your exit early, to move on to your next startup role, to do that better the next time.

Of course, if you are able to bootstrap your startup, and don’t anticipate the need for outside investors, you can technically ignore the first two points. Even still, in the context of all three points, I recommend that you evaluate the most common exit alternatives and considerations, and integrate the right one into your startup strategy and plan:

  • M&A - merger or acquisition by another company. This should be perceived as a win-win event, where your startup is bought or merged into a larger peer or competitor, allowing both you and investors to cash out. The resulting entity will gain complementary skills, economies of scale, new customer sets, and hopefully a larger growth opportunity.

  • IPO – public company initial public stock offering. According to recent National Venture Capital Association statistics, only 20% of venture-backed startups now use this alternative, due to high liability concerns, demanding shareholders, and high costs. Most experts don’t recommend this approach as your default strategy anymore.

  • Find a private equity firm or friendly individual. This alternative differs from an M&A, since the result is still your original single company. Yet it is an opportunity for you and your investors to cash out. The buyer has the challenge of scaling the business, and managing all the operational growth requirements. You can kick-off your next startup.

  • Position the company as a cash cow to fund spinoffs. If you can convince investors that your startup will generate a solid revenue stream, and the market won’t go away any time soon, they may see an opportunity for an ever larger return. You can maintain ownership, and even find someone you trust to run it for you, as you focus on spinoffs.

  • Liquidate the assets, cash out investors, and keep the rest. This is not a recommended strategy, since business shutdowns are usually seen as distressed situations, meaning the value of hard assets will be highly discounted. Less tangible assets like the brand name, business relationships, and even your reputation may be lost or damaged.

  • No exit. If your startup strategy is to be a lifestyle company, or a family business that will grow organically and never go public, then no-exit is a valid exit strategy. This alternative is often paired with a personal no-exit strategy. If you expect investors to help your startup scale, it probably won’t happen, as discussed in the first points of this article.

While exit discussions may somehow seem negative, an exit strategy should always be seen as positive. It’s a plan to develop the best opportunity for you, your startup, and your investors, and capitalize on it, rather than a plan to get out of a bad situation. Think of it as a succession plan, to keep you and what you have started growing. It may be the end of your startup phase, but it should be the beginning of a more mature and stable business.

Marty Zwilling


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Wednesday, September 10, 2014

Size Up Your Investors Before Accepting Their Money

green-moneyEven though the color of their money is always green, all startup investors are not the same. Struggling entrepreneurs are often so happy to get a funding offer that they neglect the recommended reverse due diligence on the investors. Taking on equity investors to fund your company is much like getting married – it is a long-term relationship that has to work at all levels.

Investor due diligence on a startup is not a mysterious black art, but is nothing more than a final integrity check on all aspects of your business model, team, product, customers, and plan. Reverse due diligence on the investor is a comparable process whereby the entrepreneur seeks to validate the track record, operating style, and motivation of every potential partner.

If all this checking sounds a bit paranoid and unnecessary, it may be time to take another look at some questionable investor practices and onerous term sheet requests. Beyond the technical issues, if the chemistry isn’t right, the impact on your startup and future business is likely to be similar to that of a bad marriage. It’s no fun for either side.

Thus, here are the minimum steps that I recommend to every entrepreneur in completing an effective reverse due diligence effort:

  1. Get a perspective from peer investors. Of course you need to discount any investor competitive positioning, but local investment group leaders will quickly tell you the strengths and terms of active investors in your area. If your investor is unknown, or peers offer no positive attributes, take it as a red flag. A sample of three views is adequate.

  2. Personally visit another startup funded by this investor. Through networking with other entrepreneurs, you should find one or more to visit that have relationships with this investor. Another approach is to ask the investor for references, where their involvement has made a real difference, leading to success.

  3. Do research on investor visibility via Google and social media. Start by checking the profile and credentials of investor principals on LinkedIn and industry associations. Check for positive or negative news articles, press releases, relationships, and support of community organizations.

  4. Invite the investor to dinner or fun-related activity. Outside of work is where you can best evaluate the chemistry match, and decide whether you can enjoy and learn from the relationship. Enjoy a sports event together, or find common non-profit causes to participate in. As with any relationship, it doesn’t pay to close in a heated rush.

  5. Conduct a routine credit and background check. Look for investor experience in your business domain, as well as evidence of integrity and trustworthiness. Check the content of the investor’s website, and pay particular attention to the source of funds. Personal funds imply the most commitment, and offshore funding is most suspect.

Investor agreements should always be reviewed by an attorney who is familiar with startup equity investment deals. To get the terms you want, it’s better to start with your own term sheet. It’s even better to let the attorney do the negotiating, since many innocent-sounding protective and governance provisions can have long-term negative consequences to you.

While I recognize that there continues to be a shortage of venture capital for new entrepreneurs, compared to the demand, don’t succumb to the temptation to take funds from investors that you are not totally comfortable with. The result will likely be business demands that you can’t meet, loss of key personnel, potential lawsuits, and certainly not the fun lifestyle you expected.

The only successful entrepreneur-investor relationships are win-win ones. That means you and your business must benefit from both the money and mentoring from the investor, and the investor will win from getting a larger return sooner. Win-win relationships get better over time, whereas win-lose go downhill fast and rarely survive the honeymoon period. Know your partner well before you get married.

Marty Zwilling


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Monday, September 8, 2014

Every Entrepreneur Needs Help In Getting Things Done

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

Stever Robbins, known on the Internet as the Get-It-Done Guy, outlines his strategies in his classic book “9 Steps to Work Less and Do More.” These steps are not aimed specifically at entrepreneurs, but I see how they can be applied there as follows:

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

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

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

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

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

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

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

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

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

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

Marty Zwilling


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Sunday, September 7, 2014

Do You Have The Mentality To Be An Entrepreneur?

Employees_discuss_in_officeAs an angel investor and a mentor to aspiring entrepreneurs, I’m always disappointed to see founders who seem stressed out most of the time, and more annoyed than energized by the abundance of challenges they see in building their startup. The entrepreneurial lifestyle is a tough one under the best of circumstances, and it’s one you have to love in order to succeed.

Obviously, it’s not that simple, but making the right first impression is critical for an entrepreneur, not just with investors, but also with partners, customers and even yourself. Even though I’ve been working with entrepreneurs for many years, I’m sure I’m not the only person who can quickly spot the ones whose mentality for the role is suspect.

We would all prefer that aspiring entrepreneurs take a hard look in the mirror early, before they assume they can step easily into the role of a Mark Zuckerberg, Richard Branson or Bill Gates. Here are some key mentality attributes to look for, which I believe are essential for every entrepreneur to see in themselves:

  1. You relish the role of leading the charge. Being a visionary or an idea person is not enough, you have to be anxious to jump in and get your hands dirty. Most success stories in business are not about envisioning the next big thing, but about making that change happen. Investors and strategic partners look for entrepreneurs who can execute.

  2. Ability to balance right-brain and left-brain activities. Most technical entrepreneurs are left-brain logical thinkers, even perfectionists. Yet every business today needs a focus on visualization, creativity, relationships and collaboration, which are normally in the domain of right-brainers. Successful and happy entrepreneurs have that rare whole-brain focus.

  3. Enjoy being outside your comfort zone. New businesses are an adventure into the unknown. You need to be mentally prepared to enjoy the roller coaster ride, rather than face it holding your breath with your teeth gritted at every turn. Only then can you enjoy the thrill of victory when you survive a major turn, and be energized for the next one.

  4. Proactively seek input, but make your own decisions. Great entrepreneurs seek out critical customers and industry experts, and actively listen, but are not afraid to trust their own judgment as well. Ultimately they accept the responsibility of “the buck stops here,” meaning they live by their own decisions, and never make excuses.

  5. Willing and able to do a little bit of everything. Technology experts tend to have a very deep level of knowledge, but not very wide. If your real interests are not very broad, then building a business will likely be frustrating and expensive. Startups have limited resources, so the founders have to enjoy trying things and learning from their mistakes.

  6. Viewed by others as a successful problem solver. The best ideas for a new business are solutions to a real customer problem, rather than great ideas looking for a market. Creating a new business means tackling one difficult problem after another, until success suddenly appears. Entrepreneurs see problems as milestones to success, not barriers.

  7. Don’t demand or expect immediate gratification. Seth Godin once said, “The average overnight success in business takes six years.” He is an optimist. For some entrepreneurs that success is financial. For others it is a legacy of good deeds. Because it takes so long to get there, it is important to be happy with the journey.

I’m not suggesting that you need to fit every aspect of my view of an entrepreneur’s mentality for success. Certainly there are winning businesses run by people from every background and personal style. But if you are looking for investors, team members and demanding customers, it helps to understand what their biases might be in committing to and helping the ideal partner.

I do believe that if every aspiring entrepreneur spent at least as much effort looking inward, understanding their own drivers and preparing as they do in working outward by building solutions, seeking investors and writing business plans, the startup success rate would go up.

Overall, the entrepreneur mentality is a state of mind that enjoys the activities and requirements of starting a business. Happiness is more likely to lead to success, than success leads to happiness. Are you certain that your desire and expectations of being an entrepreneur are being driven by the right perceptions?

Martin Zwilling

*** First published on Entrepreneur.com on 8/29/2014 ***


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Saturday, September 6, 2014

6 Principles For Building A Winning Business Culture

Sponsored by VISA Business

winning-business-culture-diversityI’m seeing a renewed appreciation of culture and values in business these days. Maybe it’s just another example of nature abhorring a vacuum, but I prefer to think it’s a natural evolution of the pervasive social networking communities where people relate to, and expect to interact with businesses and products they like. They drive the market, rather than the other way around.

“Your values as you create a startup are the key to creating an enviable culture that attracts more customers,” says Ann Rhoades in her book Built on Values. She would assert, and I agree, that you need to get it right the first time because first impressions are critical, and changing your values and culture in the eyes of customers and employees is extremely difficult.

I believe in a startup culture that strongly transmits the values of integrity, customer focus, and results. Ann outlines six fundamental principles that are key to building this culture, or changing an existing culture to improve financial return, customer satisfaction, and employee performance:

  1. You can’t force culture, you can only create environment. Every culture is the culmination of the leadership, values, language, people processes, rules, and other conditions, good or bad, present within the organization. No leader can “create culture,” just the environment where the desired culture can emerge and flourish.

  2. You are on the outside what you are on the inside. The service you provide for your customers will never be greater than the service you provide to your employees. You can’t force people to treat customers well if they feel ill-used themselves. Hire a diverse set of people who fit your desired culture, and treat them the same way.

  3. Success is doing the right things the right way. By defining your values and behavior by the right actions, you simplify and enable everyone to make the right decisions on the front line. Empowering and educating everyone to make the right decisions at every opportunity leads to happy customers and business success.

  4. People do exactly what they are incented to do. Your expressed values will be perceived as hollow and meaningless unless you base compensation and rewards on the behaviors that go along with the values. It takes diligence and courage to hire only people with these values, and fire ones who have lost them.

  5. Input = output. Your organization will get out of values only what they are willing to put into them. Communicate your values often, and use values-based performance metrics to gauge your results, measure the level of implementation, leadership development, and succession planning.

  6. The environment you want can be built on diversity, strategic values and financial responsibility. Conscious actions, beginning with determining a set of shared values and fostering diversity, can set up the necessary conditions for encouraging a culture that will make a startup into a leader. Values are most critical when making tough decisions, but that is also when they come in handy to illuminate the way forward.

Startups are the only businesses able to set their culture and values from a clean slate. Values start and emanate from you, the founding entrepreneur. Your values are not what you proclaim on your mission statement (if you have one). They set the culture by what you live by and project on the front line in day-to-day actions.

Strategy matters, but without a winning culture and the right values to drive it forward, your strategy will take you nowhere. Good leaders matter, but you need a culture with positive values in order to attract the best leaders and compete effectively.

Leaders drive value, values drive behavior, behavior drives culture, and culture drives performance. High performance makes new leaders. This is the self-reinforcing circle of excellence every startup needs to succeed. You can’t afford to wait on any of these, so get your culture right sooner rather than later.

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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Friday, September 5, 2014

Entrepreneurs Need To Bridge The Knowing-Doing Gap

erica-peitler-websiteThese days, with the many Internet articles and new courses available, most new entrepreneurs readily cross the gap from lack of business knowledge to knowing, but many never make it over the knowing versus doing gap. Investors I know highlight this problem with the mantra that they fund founders and teams who can execute, rather than ones who just talk about their great ideas.

After many years of working in and starting businesses, I’m convinced that implementing new business ideas is much more difficult than coming up with the ideas. The first challenge is to overcome the natural human tendency to equate talking about an idea with actually taking action. The bridge from talking to knowing to doing is all about leadership, confidence, and initiative.

I found a good summary of the dynamics behind personal business leadership, and how to get there, in a new book “Leadership Rigor!” by Erica Peitler, a well-known leadership performance coach. Here are the key principles she espouses, extended to leadership teams, based on my own background and mentoring new entrepreneurs:

  • Learn to trust yourself and your team. Crossing the knowing-doing gap in a startup can create feelings of trepidation, fear, and embarrassing consequences of perceived failure. These are self-imposed barriers based mainly on your own negative self-talk. Learning to trust yourself is critical. Then you have to listen to and trust your team.

  • Be patient and let the collective strength grow. Be aware of your anxiousness and practice self-management in being patient with yourself and team members. Resist the trigger of impatience. Slow down and trust the process, engaging the collective input of all. No one is the sole center of attention, so allow strengths to grow and unfold naturally.

  • Take an escalation-of-risk approach. Start with a low-risk approach of discussion of your action plan in a one-on-one discussion with a trusted advisor. A more moderate-risk is to offer your plan to key team members, asking for feedback. Finally, the highest risk approach is to push your execution model directly on the whole team, and resolve issues.

  • Take the fear out of team player decisions. It is easier to encourage team members to question current business processes and make innovative changes in an atmosphere of trust and safety. Getting beyond known limits requires courage from all, not fear. Driving the fear out of business pivots encourages thinking outside the box.

  • Use metrics to support judgment in decisions. Metrics should be seen as guides, helping to direct and support good behavior, but not absolute measurements of good or bad judgment and wisdom. Metrics are necessary to acquire knowledge and turn it into action. What gets measured gets done. What is not measured is not seen as important.

These principles embody an incremental approach to the knowing-doing obstacles that entrepreneurs and their teams have to face head-on:

  • Overcoming the resistance of inertia. It’s easy for founders and teams to convince themselves that it’s okay to stay in the knowing stage a little longer while everyone strives for a greater level of confidence. Sometimes intellectual arrogance drives the conclusion that knowing is the most important thing, and almost the same thing as doing. It is not.

  • Taking risks and resolving unknowns is not comfortable. Individual and team leadership is about consciously demonstrating good business actions, in real time, through disciplined practice. Doing this will create experiences from which you and the team can learn and grow. Expertise requires iteration on learning, failing, and growing.

  • Fear of showing vulnerability. Every entrepreneur and team member has to get over the fear of showing others conscious incompetency in certain areas, and a willingness to struggle through the necessary learning curve to reach conscious competency. This is an important step in self-coaching, and in coaching others on the team.

  • Don’t let the memory of past actions limit thinking. Memory often serves as a substitute for thinking. Team members do what has always been done without reflecting. Business problem solving should mean drawing from past precedents, how things have always worked, and standard operating procedures, but not being constrained by them.

Entrepreneurs should judge their own competency, and that of team members, based on how well they perform, not how well they talk or how smart they seem. It’s easy to sound smart by being critical of the ideas of other team members, and it’s easy to make excuses about why a new proposal will not work, or why the present process is less risky than a new one.

Starting and building a business is not rocket science. But is does require continuous decisions and sound execution. Thus the knowing-doing gap is one of the biggest inhibitors to success that I see. It’s time for every entrepreneur to take a hard look at themselves and their team to assess how well they stack up relative to the principles and challenges outlined here. All your competitors, investors, and customers are making the same assessment on you.

Marty Zwilling


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Wednesday, September 3, 2014

Modern Entrepreneurs Need To Learn How To Write

Arabic_calligraphyEven in this age of videos and text messages, the quickest way to kill your startup dream with investors, business partners, or even customers, is embarrassingly poor writing. Being very visible in the startup community, I still get an amazing number of badly written emails, rambling executive summaries, and business plans with one paragraph per chapter.

In the competitive realm of business, you only get one chance to make a great first impression. You have to be able to communicate effectively in all the common forms, including business writing, as well as talking, presenting, and producing videos. Lack of the requisite skills or discipline will get you branded as a poor business risk before the message is even considered.

Business writing is not a skill that anyone is born with, but one that everyone can learn. Since we both lose when an entrepreneur with a great idea is held back by a failure to communicate, I would like to offer a quick summary of business writing basic principles. Keep these in mind as you look for others to join you in supporting your idea to change the world:

  1. Get to the point in the first sentence. In this age of data overload, everyone has learned to tune out if they can’t quickly decipher a relevant purpose and focus for your message. That context needs to be set before your sales pitch or background story makes any sense. Before you start, make sure you understand your own objective.

  2. Plan the message flow to a logical conclusion. Random thoughts or lists of facts do not constitute effective business writing. Most commonly, your message is informational or meant to persuade, so every element should be consistent with that intent. Always include the key document elements of an opening, main body, and a conclusion.

  3. Key points should be highlighted and positive. Action items should be underlined, or separated into bullets to provide visual recognition in a quick scan. Positive messages have more impact, so keep negative and emotional statements to a minimum. Avoid flowery language and excessive use of adjectives. Tight wording clarifies the message.

  4. End with a clear call to action. If you are looking for an investor, a partner, or a customer, make sure the next step is clearly stated, and not just implied. Contact information should always be included. Ending with “May I ask for an hour on your schedule next week to discuss details?” is better than “Don’t miss this opportunity.”

  5. Talk uniquely to each recipient. Generic messages aimed at groups of people do not make a good first impression, especially if the greeting is non-specific and email is directed to a long list of addresses. Smart business people tailor their conversations to each recipient, and the same consideration should be applied to written messages.

  6. Use professional formatting. A badly formatted document, in all caps, mixed fonts, or all one paragraph will destroy even the best message. If you are asking for a million dollars, don’t send your message in smartphone or texting shorthand, ignoring spelling errors. Show your recipients professional respect, and you will get respect in return.

  7. Keep your writing voice friendly and courteous. If your writing tone is angry, cynical, or arrogant, don’t expect any reader to be open to what you have to say. Tune your use of language to the reading level of the recipient or below. Trying to impress or intimidate the reader with technical terms or acronyms doesn’t work with confident professionals.

As a general rule, text messages or emails from a smartphone should never be used for business purposes with someone you don’t know well. Emails are acceptable, if kept to one page, with minimal attachments, addressed to a single recipient, with a relevant subject line, and professionally formatted.

If the business criticality is high, or the subject is sensitive or easily misinterpreted, skip the written communication entirely, in favor of a phone discussion or a personal meeting. Written communication can never convey emotions and body language effectively, which may be fifty percent or more of the message.

Every entrepreneur needs to remember that they are selling themselves in every written communication, even more than they are selling their idea or funding request. Poor use of the writing technology generally available, including formatting tools and spell checkers, will be read as an inconsiderate or risky partnership. You can’t afford that competitive disadvantage.

Martin Zwilling


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Monday, September 1, 2014

Will A Business Incubator Help Hatch Your Startup?

Incubator_Baby_DuckOne of the reasons that now is the time to be an entrepreneur is the explosion of startup assistance organizations, usually called incubators or accelerators. According to the National Business Incubator Association (NBIA), there are over 7,000 of these locations worldwide, and even new online versions like Pitchswag springing up here and there.

Most of these are non-profits, set up by a university to commercialize new technologies, or a municipality to foster business development for the local economy. A few are still trying to make a profitable business out of nurturing startups, but it’s a challenge to make money when your customer startups don’t have many resources to give.

But there are notable examples of for-profit incubators that are thriving, including YCombinator, led by Paul Graham in Silicon Valley, and TechStars, led by David Cohen and located in several key cities around the country, that have an excellent reputation and track record. I believe their competitive advantage is their top on-site leadership, exclusivity, and connections to investors.

Variations on the incubator theme are sometimes called business accelerators, science parks, or the Small Business Administration's Small Business Development Centers (SBDCs) in almost every state in the US. Accelerators generally accept startups at a slightly later stage, and attempt to compress the timeline to commercialization into a few months, instead of a year or more.

Common resources provided by most of the incubators and accelerators today include the following:

  • Access to shared office facilities for multiple startup teams at a very low cost.
  • Shared business support services, including telephone answering, conference rooms, teleconferencing, administrative support, and a business mailing address.
  • Mentoring and technical assistance from volunteer or paid experts.
  • Direct seed funding, for a share of the equity, and introductions to investors.
  • Peer-to-peer networking with other startups and founders in the same stage.
  • Health, life, and other insurance at group rates.

If you don’t need these common resources, but need specialized technology services, you should look for technology parks and research facilities, often sponsored by leading companies in specific technologies, like Intel New Business Initiatives and Google Ventures. As well, these companies usually bring real new venture funding opportunities to the startups they sponsor.

To get started, go to the National Business Incubation Association (NBIA) web site, and use the lookup tool provided to see what’s available in your area. This association is definitely one of the world’s leading organization for advancing business incubation and entrepreneurship. Another good online approach is a simple Internet search for articles like the “The 15 Best Startup Accelerators in the U.S.

But don’t expect incubators to magically convert your pre-hatched idea into a successful company. The good incubators are highly selective, and expect you to demonstrate your commitment and a hard work ethic to meet expected milestones and show continuous progress. In a recent cycle, YCombinator had a thousand applicants for thirty slots, and several of these fell out before completion. Think of that challenge like competing for limited venture capital.

I believe the real value of an incubator is in the relationships you can build there, with peers as well as domain experts, investors, and potential strategic partners. An incubator won’t help you if the market opportunity is small, the competitors are large, or your solution doesn’t address a real need.

As evidence that it does work, TechCrunch recently aggregated the combined valuation of YCombinator graduates at $14.4 billion, with the total amount raised topping $2 billion. That’s over 500 successes in less than ten years. However, if you are looking to find an incubator like YCombinator for easy money and free services to hatch your startup, it probably won’t work.

Growing up and surviving in the entrepreneur world requires a fine balance between an independent determination to be self-sufficient, and a humble willingness and ability to listen to and learn from the best and the brightest startup mother-hens out there. Are you and your startup ready to make the cut?

Marty Zwilling


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