Monday, March 27, 2017

6 Ways To Attract A Flock Of Angels To Your Venture

flock-of-angelsFundraising is brutal. Actually, according to Paul Graham of Y-Combinator fame, “Raising money is the second hardest part of starting a startup. The hardest part is making something people want.” More startups may fail for that reason, but a close second is the difficulty of raising money.

A while back, I outlined “10 Tried-And-True Strategies For Funding New Ventures” for startups, listing angel investors as alternative six. I still get a lot of questions on these mysterious and often invisible investors, so here is another attempt to bring them out of the ether.

By definition, an angel investor is not an “institutional investor.” Venture capitalists (VCs) are paid to invest other people’s money, and measured on the rate of return they get. Angels are typically high net worth individuals who are investing their own money, for a wide range of motives.

So “good” angels are ones with motives that are consistent with what you bring to the table. This means they usually invest in people who have the right “chemistry”, and areas of business they already know. They tend to work locally, so they can “touch and feel” their investments.

Angel investors also tend to limit the size of individual investments to $250K or less. If you need more, you need VCs or a flock of angels. So how do you find those good angels?

  1. Use personal networking. The best angels you will find are the ones who know you personally, or know a member of your team or advisory board. If a potential investor gets to know you BEFORE you are asking for money, your credibility and investment probability will be improved by an order of magnitude.

  2. Entice angels to play along. Of course, angels are really mortals. They want to make a difference. Asking an angel to work with your company in an advisory role is a great way to establish a relationship that may lead to a cash investment. If you impress the angel, it will likely make her at least an archangel (advocate) when it comes to funding.

  3. Court local angel groups. Since angel investors most often focus only in their own geographic area, it’s most effective to court the local group, or even make a guest appearance with an archangel. If you can earn an archangel's confidence, he or she will invite you to pitch the group, and you'll have an edge in the voting.

  4. Mine national databases. If you are still alone, submit your application to the leading online website national databases of angel investors, Gust (USA) and National Angel Capital Association (Canada). These sites have arrangements with hundreds of local groups and individual investors that you might otherwise have missed.

  5. Remember angels beget angels. That means that once you get the first one, he or she becomes your best advocate for finding more. Investment angels don’t like to travel alone, so they will bring in others if they can (it’s called share the risk).

  6. Don’t forget passive angels. These are angel investors who are private, meaning they don’t go to meetings, but will invest if someone they trust brings them an attractive opportunity. Find the right investment advisor, or member of your advisory board, and the “match-making” will happen.

Remember that angels have a culture all their own, and it pays to understand how to deal positively with them after you find one. There are some books out there to help, like the one I published a while back with Joe Bockerstette “Attracting an Angel - How to get Money from Business Angels and Why Most Entrepreneurs Don't”, and an old standby “The Art of The Start”, by Guy Kawasaki.

Even if you follow this recipe, you are likely to find that fundraising is a brutal challenge. But if it results in a good angel or two watching over your startup, you will definitely be one step closer to heaven.

Marty Zwilling

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Sunday, March 26, 2017

6 Reasons Why The Google Leaders Were An Exception

Google_page_brinI tell entrepreneurs that Google was an “exception” to all the investment and startup rules, but I’ve always wondered what it takes to be an exception. Since every business is built by unique individuals, I’m totally convinced that exceptional people are the key to an exceptional company.

To check out the Google founders, and because I still see so many business plans that are modeled after Google (more search engines, and more billion dollar growth models), I had to take a look at the classic book about them, called “Inside Larry & Sergey’s Brain,” by Richard L. Brandt. It didn’t disappoint me.

This book was not sanctioned by Larry Page and Sergey Brin, so it’s not a love story. All the controversy is highlighted, but the message still seems to be that these guys were and are exceptional in their efforts to build a company. Here are some lessons from the book that all entrepreneurs should wish they could emulate:

  1. Independently outstanding, but complementary founders. Larry is the primary thinker about the company’s future direction, and weighs in heavily on key hiring decisions. Sergey, a mathematical wizard, is the arbiter of Google’s technological approach. Both have a deep sense of moral values and ethics, and work well together.

  2. Unique business tactics. Technology alone does not make a great company. Business tactics do. Google developed the most profitable form of advertising anyone had ever seen, ads selected real-time based on search terms. They focused on small advertisers looking for bargains. The model was a perfect fit for the Internet Age.

  3. Survived phenomenal growth. In 2003, just four years old, sales hit $1.5 billion, profit was $100 million, and it had taken over some 80 percent of the world’s search queries. Google now employs about twenty thousand people. Most founders don’t survive this kind of growth and change, but Larry and Sergey are still a well-balanced machine, with a net worth of over $20 billion each.

  4. Loved and hated at the same time. Larry and Sergey have been wickedly clever. They break the mold. They challenge old industries and make a lot of enemies. They’re ruthless businessmen. Yet through it all, they’re idealists, believers in the power of the Internet to make the world a better place.

  5. Surround themselves with the best people. Early on, they were able to get money from the likes of Andy Bechtolsheim and John Doerr. They convinced Eric Schmidt to take the reins with them for growth as interim CEO and current Executive Chairman, and had Dr. Larry Brilliant for the philanthropic arm for several years. Amazing.

  6. Continue to think big. According to the book, both founders continue to think big. Some of their ideas are as flighty as space travel; others are as grounded as the DNA that makes them who they are. No one proclaims to know where its leaders will take Google next, but everyone expects more great things.

Even the pros should probably pay attention here, to sharpen their game and to improve the accuracy of their assessments about people in general, as well as Google’s motivations and intentions. I think Larry and Sergey have shown a relentless focus on innovation that puts them miles ahead of competitors on all fronts.

I challenge each of you, as you reflect on your own vision and entrepreneurial plans, to take a lesson from Larry and Sergey. Do you have the intestinal fortitude to walk away rather than be “corrupted by financial interests,” or to ignore conventional wisdom and follow your own instincts? If so, then you too may be the exception that even the best and the brightest will line up to support. This world needs more exceptional people. Act like one and you too may be one.

Marty Zwilling

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Saturday, March 25, 2017

7 Rules For Turning Business Conflicts Into Win-Win

conflict-managementMany entrepreneurs are not prepared for conflict, or actively avoid it. Their vision, passion, and focus are so strong that they can’t imagine someone disagreeing, much less fighting them to the death. But the reality is that startups are composed of smart people, with emotions as well as intellects, working in close proximity under much pressure, so conflicts will occur.

In fact, most business conflict is constructive and should be embraced in steering through the maze of innovation and change that is part of every successful business. Surround yourself with “yes” people, and you may feel good initially, but the brick walls no one mentions will hurt later.

On the other extreme, constant and unmanaged conflict will quickly drive your startup to be dysfunctional. Here are a few simple rules of thumb toward constructive conflict resolution that I espouse, as summarized from the classic book by Peter T. Coleman, “The Five Percent: Finding Solutions to Seemingly Impossible Conflicts:”

  1. Know what type of conflict you are in. The first step is to assess whether the conflict is win-lose, win-win, or mixed (some competing and some shared goals). Each of the three types requires different strategies and tactics. Learning how to identify and respond to each type is central to success. Try a good business mentor to get you on the right track.

  2. Not all conflicts are bad. Most often, conflicts present us with opportunities to solve problems and bring about necessary changes, to learn more about ourselves and the business, and to innovate – to go beyond what we already know and do. Avoid the ones that are irrelevant to your startup, but don’t hesitate to engage in the others.

  3. Whenever possible, cooperate. Research has consistently shown that more collaborative approaches to resolving win-win or mixed-motive disputes (the majority of conflicts) work best. Therefore you should always approach conflicts with others as mutually shared problems to be solved together.

  4. Be flexible. Try to distinguish your position in a conflict (“I need a raise”) from your underlying needs and interests in the relationship (“I want more respect for my contribution”). Your initial position may severely limit your options. Creativity and openness to exploration are essential to constructive solutions.

  5. Do not personalize. Try to keep the problem separate from the person when in conflict (do not make them the problem). When conflicts become personal, the rules change, the stakes get higher, emotions spike, and the conflict can quickly become unmanageable.

  6. Meet face-to-face and listen carefully. Meet in a neutral location, and work hard to listen to the other side in a conflict. Accurate information is critical, and careful listening communicates respect. This alone will move the conflict in a more friendly and constructive direction. Don’t mistake sending text messages and emails as listening.

  7. Be fair, firm, and friendly. Research shows that the process of how conflicts are handled in usually more important than the outcomes of conflicts. Always attempt to be reasonable, respectful and persistent, but do not cave in. Find a way to make sure your needs are met.

Applied correctly, these methods can move most business conflicts in a positive and satisfying direction. But Coleman asserts that there are five percent that will always be “intractable.” These usually involve issues that won’t ever be resolved in the workplace, and should be avoided, like politics, religion, personal enmity, and cultural biases. Your best bet on these is not to engage.

For the rest, you must engage (avoidance just hardens positions and delays the consequences), and you must bring closure to the argument or conflict. Closure in business should include formalizing the result in a written document, with clearly outlined terms and activities, and follow-on milestones as required.

The most successful entrepreneurs are creative and skillful in handling conflicts, and actively seek constructive conflict with key stakeholders. The result is better decisions, more consensus, and better communication. In business, as in life, real change rarely happens without some pain. Learn to deal with it.

Marty Zwilling

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Friday, March 24, 2017

7 Ways to Use Data and Analytics for Strategic Change

analytics-strategicMore than ever, businesses need to take full advantage of automation, data, and analytics to run their business more productively and competitively. Yet, in my role as a small business advisor, I still see many founders and executives who see data and analytics primarily as a measurement device on current results, rather than using it to evolve the business strategy and direction.

Certainly it’s important to optimize current operations, but in this age of rapidly changing demands and competitors, it’s more important change quickly as the market changes. I was reminded of the critical need to change, and how, in a new book, “The Caterpillar's Edge: Evolve, Evolve Again, and Thrive in Business,” by Sid Mohasseb, former head of KPMG’s Strategic Innovation Practice.

Mohasseb details a set of insight boosters to channel your change decisions, and using data and analytics differently are among the key ones:

  1. Commit that data and analytics will drive strategic decisions. View and leverage data as an asset for future decisions, not just a measure of past actions. The first step is to get the data and analysis to all the right people. Strategic decision makers need to see the data, in addition to marketing and sales. Ask for analysis rather than reams of data.

  2. Always remember it’s about the problem, not the solution. Don’t start with finding what you want – having a specific end in mind assumes you have knowledge of the future. Recognize that the problem and needs will shift. Let the data and the analytics suggest the questions you need to ask, not the answers. It’s the begin point, not the end.

  3. Control your urges to solve first and justify with data later. To gain new insight, always look to disprove yourself. Allow your conventional assumptions to be challenged. We all have the human tendency to read data as supporting our own biases. Be sure to get multiple views of insights and implications from advisors that you trust.

  4. Avoid getting only a filtered view of the world. Too much reliance on automated filtering may result in missing key issues and rehashing the problems framed up in the past. Sometimes a look at the raw numbers, in addition to trend reports, will trigger a new question, and lead to insights otherwise overlooked. Seek a variety of analysis tools.

  5. Keep up on the details, but don’t miss the big picture. Using big data and analytics is a balancing act – some people get bogged down in the details, and ignore the bigger messages, while others miss short-term corrections that can make a big difference. Make sure you have team members covering both domains, to balance your decision input.

  6. You are the business scientist, to balance data scientists. You can delegate the technology infrastructure issues and decisions to the CTO or CIO, and data gathering and cleansing matters to the new chief data officers, but don’t delegate your business strategy role. Your tech guys may know how to read data, but you must read the market.

  7. You don’t need to be exhaustive in capturing all signals first. Start now to recognize and evaluate signals and changes from a growth, risk, and efficiency perspective. Be acutely aware of the value exchange dynamics between stakeholders, and sensitive to the urgency of reading changes before competitors, rather than following the crowd.

As important as it is to add insight boosters, you also need to change any addictions you have to traditional planning processes, fixed budgets, and reliance on ultra-optimistic revenue projections. Your team needs to know that it is safe to experiment, and failure is not a toxic result. Use data to unleash and reward the power in your team for imagination, action, and innovation.

As author Mohasseb indicates, you have to be able to evolve your business as quickly and smoothly as a caterpillar evolves into a butterfly, so that you can soar with the wind. Don’t be one of the many small businesses I see that crawls along at a snail’s pace, and ultimately gets stepped on by the competition. Keep your eye on the data and the analytics.

Marty Zwilling

*** First published on Inc.com on 03/07/2017 ***

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Wednesday, March 22, 2017

9 Ways To Spot An Opportunity For A New Business

smartphones-opportunitiesAs an advisor to startups and entrepreneurs, I often hear the myth that all new businesses must start with a great idea. I have to disagree. I believe the best entrepreneurs start by finding a large opportunity, and only then use good ideas to capitalize on that opportunity. The best opportunities are recognized from painful needs, plus a growing population of customers with money to spend.

For example, technologist entrepreneurs often come up with a new device or application, just because they can, and assume everyone will want one. Social entrepreneurs pitch me their latest idea for eliminating world hunger (producing algae), but may forget that really hungry people probably don’t have any money. It takes a real selling opportunity to sustain a business idea.

I just finished a new book, “The Entrepreneur’s Playbook,” by Leonard C. Green, which supports my view, and is full of practical advice for aspiring entrepreneurs, including easy ways to identify sure-bet opportunities, most not requiring any invention, before you finalize your innovative business idea. Here are some approaches that both of us recommend to get you started:

  1. Take a basic product and make it special (upgrade). Premium bottled water (Fuji), expensive coffee (Starbucks), and gourmet cookies (Mrs. Fields) are examples of what were once pedestrian products that have driven successful new businesses. Sometimes you need to take a commonplace item, like a cup of coffee, and make it an “experience.”

  2. Offer a no-frills version of a high-end product (downgrade). For example, Southwest Airlines eliminated all the frills that usually come with an airline ticket, and now they are a market leader, being copied by the majors. In supermarkets, everyone today knows that generic brands often offer more value and quantity, without giving up key ingredients.

  3. Find products that seem to fit together (bundle). Instead of requiring people to shop and pay for related items, combine them into one package. Today’s smartphones are more attractive than a separate phone, camera, computer, and software packages. Sometimes just including training and installation makes a product more attractive.

  4. Break existing bundles into separate packages (unbundle). This is obviously the inverse of the bundle approach. Home computers have long been offered in unbundled as well as bundled hardware and software, to allow for a lower entry cost and flexible configuring versus simplicity. Long-term warranties are now unbundled from appliances.

  5. If a product sells in one area, transport it to another. Importers/exporters make their living this way with products from different parts of the country or the world. The same concept resulted in the birth of franchises, which are essentially proven business models transported to new locations. The Internet is a business for transporting web services.

  6. Expand a narrow product offering to the mass-market. A popular incarnation of this approach today is to take an Internet-only product into brick-and-mortar retail for access to a much larger audience. The same concept applied to every startup which test-markets its product in a local area, then scales the business for national or global access.

  7. Take a broad-appeal product into a niche. With the widespread popularity of social media, I now see many businesses looking at niche market interest groups, such as sites for travelers, hunters, cancer support, and crafts. In television, this is called narrow-casting, to gear specific channels to a special audience, like golf, old shows, or history.

  8. Maximize the selection of products offered (think big). This approach brought us the “big box” stores, including Walmart, Lowe’s, and Home Depot. Online, the same concept has been implemented by Amazon and Alibaba. It allows customers to complete their shopping in one place, and businesses get the value of volume and common processes.

  9. Focus on in-depth expertise and support (think small). This is the inverse of the “think big” strategy, which you see at your local hardware stores, with knowledgeable and friendly support staffs. They specialize in the depth of their selections that a true connoisseur demands. Online sites now advertise customized designs and personal fits.

It shouldn’t be hard to see from these examples the wealth of business opportunities available without inventing a totally new product or technology. Thus I continue to tell entrepreneurs that business success is more about the execution, and the quality of the team, rather than the idea.

Also, by looking at the size of the opportunity, you can take a calculated risk, rather than close your eyes and step into the total unknown. Calculated risks are less likely to be fatal, and more likely to be fun and profitable. Think about it before you send me your next business plan to change the world.

Marty Zwilling

*** First published on Huffington Post on 03/20/2017 ***

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Monday, March 20, 2017

5 People To Avoid In The Search For An Ideal Investor

people-to-avoid-as-investorsEvery entrepreneur seeking funding loves the challenge of getting customers and investors excited, but dreads the thought of negotiating the terms of a deal with potential investors. They are naturally reluctant to step out of the friendly and familiar business territory into the unfamiliar battlefield of venture capitalists from which few escape unscathed.

In reality, a financing negotiation is not a single-round winner-take-all game, since a “good” deal requires that both parties walk away satisfied -- with a win-win relationship. Brad Feld and Jason Mendelson, in their classic book “Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist” emphasize that there are only three things that really matter in this negotiation: achieving a good and fair result, not killing your personal relationship getting there, and understanding the deal that you are striking.

To be an effective negotiator, I agree that you first need to quickly identify and adapt to your opponents negotiating style. Feld and Mendelson identify the five most common negotiating styles that you will see on both sides of the table, and talk about how you can best work with each of them:

  1. The Bully (aka UAW negotiator). The bully negotiates by yelling and screaming, forcing issues, and threatening the other party. They usually don’t understand the issues, so they try to win by force. Unless this is your natural negotiating style, their advice is to chill out as your adversary gets hotter.

  2. The Nice Guy (aka used-car salesman). This style is pleasant, but you always feel like he’s trying to sell you something. While he doesn’t yell at you like the bully, it’s often frustrating to get a real answer (need to talk with the boss). For these, be clear and direct, and don’t be afraid to toss a little bully into the mix to move things forward.

  3. The Technocrat (aka pocket protector guy). This is the technical nerd who can put you into endless detail hell. The technocrat has a billion issues and has a hard time deciding what’s really important, since to him everything is important for some reason. Make sure you don’t lose your focus and fight for what you really care about.

  4. The Wimp (aka Marty McFly). You may be able to take his wallet pretty easily during the negotiation, but if you get too good a deal it will come back to haunt you. You have to live with him on the Board and making decisions. You may end up negotiating both sides of the deal, which is sometimes harder than having a real adversary.

  5. The Curmudgeon (aka Archie Bunker). With the curmudgeon, everything you negotiate sucks. He may not yell, but he’s never happy, and keeps reminding you how many times he has been around the block. If you are patient, upbeat, and tolerant, you’ll eventually get what you want, but don’t expect to ever please him.

Secondly, you should never walk into any negotiation blindly without a plan. Know the key things that you want, understand which items you are willing to concede, and know when you are willing to walk away. When determining your walk-away position, you need to understand your best alternative to agreement, and have a Plan-B (bootstrapping, competing investor, or more time).

Another key preparation is to get to know the investors you will be dealing with. Do your homework on the Internet and through contacts to find out their strengths, weaknesses, biases, curiosities, and insecurities, Knowledge is power, and that can be used for leverage.

On the other hand, when negotiating a financing for your company, you should never present your term sheet first. Always wait for the investor to play his hand. Next, make sure you listen more than you talk. You can’t lose a deal point if you don’t open your mouth. Finally, don’t lose sight of the deal as a whole, by being forced to a decision linearly on each point in isolation.

If you are the least experienced person around the negotiating table, it’s time to hire a great lawyer to help balance things out. Remember, your lawyer is a reflection of you, so check their reputation and style, as well as their win-loss record. The financing is only the beginning of a critical relationship, and a small part at that. Don’t work so hard at winning the battle that you lose the war.

Marty Zwilling

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Sunday, March 19, 2017

10 Writing Tips To Get Maximum Impact From Any Plan

business-plan-writingIf you want people to invest in your idea, then my best advice is first write a business plan, and keep it simple. Don't confuse your business plan with a doctoral thesis or the back of a napkin. Keep the wording and formatting straightforward, and keep the plan short. For minimum content, see my original article “These 10 Key Elements Make a Business Plan Fundable.”

The overriding principle is that your business plan must be easy to read. This means writing at the level of an average newspaper story (about eighth-grade level). Understand that people will skim your plan, and even try to read it while talking on the phone or going through their e-mail.

But don't confuse simple wording and formats with simple thinking. You're keeping it simple so you can get your point across quickly and effectively to team members and investors. With that in mind, here are some specifics that bear repeating, updated from a classic article on simple plans by Tim Berry:

  1. Keep the plan short. You can cover everything you need to convey in 20 pages of text. If necessary, create a separate white paper for other details and reports. The one-page Oprah plan is a good executive summary, but it’s not enough to get the investment.

  2. Polish the overall look and feel. Aside from the wording, you also want the physical look of your text to be inviting. Stick to two fonts in a standard text editor, like Microsoft Word. The fonts you use should be common sans-serif fonts, such as Arial, Tahoma or Verdana, 10 to 12 points.

  3. Don't use long complicated sentences. Short sentences are the best, because they read faster, and reader comprehension is higher in all audiences.

  4. Avoid buzzwords, jargon and acronyms. You may know that NIH means "not invented here" and KISS stands for "keep it simple, stupid," but don't assume anybody else does.

  5. Simple straightforward language. Stick with the simpler words and phrases, like "use" instead of "utilize" and "then" instead of "at that point in time."

  6. Bullet points are good. They help organize and prioritize multiple elements of a concept or plan. But avoid cryptic bullet points. Flesh them out with brief explanations where explanations are needed. Unexplained bullet points usually result in questions.

  7. Don’t overwhelm the plan with too many graphics and flashy colors. Pictures and diagrams can effectively illustrate a point, but too many come across as clutter.

  8. Use page breaks to separate sections. Also to separate charts from text and to highlight tables. When in doubt, go to the next page. Nobody worries about having to turn to the next page.

  9. Use white space liberally, spell-checker, and proofread. Include one-inch margins all around. Always use your spell-checker. Then proofread your text carefully to be sure you're not using a properly spelled incorrect word.

  10. Include table of contents. No investor likes searching every page for key data, like executive credentials, or exit strategy. Most word processors these days can automatically generate a table of contents from your section headings. Use it.

Investors hear from too many entrepreneurs that envision a great business opportunity, but don’t have any written business plan at all. They think they can talk their way to a deal. It won’t work. On the other end of this spectrum are entrepreneurs who present long product specifications with a few financials at the end. This is a failing strategy as well.

If you're not the type who can connect with people based on a simple message, told succinctly, then hire someone who can. In fact, simplicity and readability is one of the most effective strategies for selling even the most complex proposal. A business plan that is easily understood and looks professional is already half sold. Simple is not stupid.

Marty Zwilling

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Saturday, March 18, 2017

5 Signals To Evaluate To Test The Value Of Your Brand

brand-relationshipsBrands are people first. Customers are people too, so customers tend to take their relationship with a brand personally. Thus it’s not a surprise that people love their favorite smartphone brand, cringe when you mention their cable company, or even hate the mention of a particular bank.

Startups, as well as every existing business, need to realize that this brand perception is becoming more and more driven by their relationships with customers, as well as feedback from other customer brand relationships, made visible on social media and Internet websites like Yelp and Foursquare. Proving the new model today are sites like Patagonia and Zappos.

According to Chris Malone and Susan T. Fiske, in their classic book “The Human Brand,” humans are very perceptive, from early survival evolution, and make quick judgments about other people’s intents toward them (warmth), and the capability of carrying out intents (competence). Thus your brand (people) needs to project both warmth and competence, for loyalty today.

But how do you know if your brand is projecting warmth and competence to your customers? Here are some key signals, outlined by Malone and Fiske, which I believe every startup founder and business leader should evaluate in their own business to see if their brand is positive:

  1. The loyalty test. For loyal customers, a business has to first demonstrate genuine warmth, concern, and commitment. Selling to loyal customers is 3 to 10 times cheaper than acquiring new customers. Go beyond loyalty expectations, and you can turn loyal customers into passionate advocates who actively recommend your company to others.

  2. The principle of worthy intentions. This principle is a relationship building strategy that involves attracting and keeping customers by consistently putting their best interests ahead of those of your company or brand. Competence alone won’t ensure loyalty. Only the emotional connections of worthy intentions has the power to change minds.

  3. The price of progress. Faceless commerce these days leads to a focus on discounts. Discounts are viewed as less-than-worthy intentions, and do not buy loyal customers. Every website must offer more than one-way commerce and discounts. It must also offer interactive relationships, and warmth and competence, through worthy intentions.

  4. Take us to your leader. Customers today have a primal desire to judge brands by the people behind the brand, most notably the CEO. Customers look for transformational rather than transactional leaders, who inspire employees to exert the extra effort on customers’ behalf. Leaders need to come out from behind their curtain.

  5. Show your true colors. Mistakes and crises are a golden loyalty opportunity. We are apt to forgive when we feel empathy for an offending partner. Customers watch and judge whether people or profits come first. A brand spokesperson can show worthy intentions, or can deflect blame and take a narrower more self-serving view.

Today’s business market exists in the renaissance of relationships. Perception is reality, and businesses can no longer hide behind their brand. Transactions move faster and mistakes happen faster, with customers able to watch for warmth and competence, or no worthy intentions. Here are key imperatives, sanctioned by Malone, Fisk, and myself, to keep you on the right track:

  • Become more self-aware. On-going self-awareness is a crucial competency of every brand and every business leader. Don’t be afraid to ask customers the direct questions – do you see us as warm and trustworthy, as well as competent and capable? Then listen with an open mind and genuine interest, and be willing and able to change.
  • Embrace significant change. Change is now the norm, so no change over a period of time is actually moving backward. Companies and brands must shift from a mentality of control, defensiveness, and unresponsiveness to one that is more open to understanding how they are perceived, and to adopt change as a good thing, rather than a problem.
  • Fundamentally shift priorities. Lasting change requires a sincere examination and adjustment of the goals and priorities that have led companies astray in the first place. Sustained success in the future will require companies to dramatically shift their emphasis from short-term shareholder value to shared value for multiple stakeholders.

Overall, your customers now have near-instantaneous power to hold companies and brands accountable for their words and actions. That power will continue to grow in the years ahead. Is your brand ready to flourish in that environment, or highly at-risk for any slight misstep?

Marty Zwilling

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Friday, March 17, 2017

6 Keys to Becoming an Influencer for More Business

influencer-business-growthThe most powerful way to grow your business and your career these days is to become a visible influencer in your domain. People follow influencers on social media to find what they buy, who they vote for, and which social causes they support. You don’t have to be the smartest person in the room to be an influencer, but you do have to understand and practice some key techniques.

In this age of total and instant communication via Internet videos and smartphones, everyone assumes that if they don’t know you, you are hiding something, or perhaps don’t even exist. They flocked to businesses like Apple, when influencer Steve Jobs was at the helm, and anxiously await the next moves from visible entrepreneurs, including Mark Zuckerberg and Elon Musk.

Personalities in business are the influencers these days, rather than brand names and symbols. You are your own brand, and the brand for your business. Thus it behooves you to do everything you can to be perceived as an influencer. I found a good summary of these attributes in a recent book, “The Old School Advantage,” by an expert on interpersonal communication, J. N. Whiddon.

The keys to being an influencer are time-honored and not new, but they have assumed a new importance in this age of instant communication. Based on my current role as a mentor to entrepreneurs, I will paraphrase and recommend Whiddon’s top techniques in business terms:

  1. Build an image of likability and rapport. We all relish working with and buying from people we can relate to on a personal level. In today’s customer context, you can foster rapport by dressing like them, making every effort to look attractive, offering compliments, and listening intensely. Customers need to believe that you are one of them.

  2. Highlight your interest in helping and giving back. Entrepreneurs who are clearly willing to give as well as take in business become influencers because people feel the urge to reciprocate. Going out of your way to help a customer or help a good cause pays big dividends these days. Don’t be seen as a business taking without giving back.

  3. Establish yourself as an authority in your domain. In the past, authority came from a position title or uniform. Today in business, authority is a function of visibility, leadership roles in related functions, and what is said about you online by authoritative publications and people you know. You can also establish authority by writing and public speaking.

  4. Show your ability to build customer consensus. Influencers in business are entrepreneurs who are willing to engage with customers, and get them fully aligned with the business. Actively participating in social media is the place to start, including blogging and positively responding to customer feedback, to build a growing crowd of followers.

  5. Demonstrate your commitments and consistency. As an example, early businesses that were willing to publish their commitment to “customer satisfaction or your money back” became influencers. Now customers look for more. Be creative in demonstrating your strengths consistently, and your influencer perception will rise.

  6. Highlight elements of your exclusivity and scarcity. Facebook initially capitalized on exclusivity by allowing only Harvard students to join their social network. When services are unique, difficult to obtain, or available for a limited time, their value increases, and your influencer level goes up. Scarcity is one of the best justifications for higher prices.

The net effect is that influencers can rely more heavily on the less expensive “pull” marketing, rather than traditional “push” marketing. With pull marketing, the idea is that your influence and presence draws customers to your solutions. Customers don’t even see this as advertising, and actually become strong advocates who pull in their friends, further magnifying your influence.

Certainly the steps to becoming an influencer take effort and involve risk. The power to persuade and influence others also carries a great responsibility. If you don’t wield your influence wisely, you will hurt others and hurt yourself. Yet staying invisible and taking no risks in business today is a certain recipe for failure. Are you doing all you can to influence your own growth and success?

Marty Zwilling

*** First published on Inc.com on 03/02/2017 ***

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Wednesday, March 15, 2017

6 Keys To Hiring The Best Team For Your New Business

Adam-Robinson-The-Best-Team-WinsStartup investors tell me they invest in a new venture with a higher caliber of people, rather than the product or service, and I agree. In my role as a business advisor, I see successful businesses most often emerging from great teams rather than great products. Yet I find the people building teams are usually product experts, often with no experience in team building.

Of course, it’s no surprise that most entrepreneurs don’t have a background in hiring teams, and don’t have a budget for training or human resource consultants. But these days with all the resources on the Internet and elsewhere, there is no excuse for not keeping up on the latest insights, best practices, and technology in the area of hiring, motivating, and training.

For example, I just finished a new book, “The Best Team Wins: Build Your Business Through Predictive Hiring,” by Adam Robinson, CEO and cofounder of Hireology, which details the how and why of hiring your most valuable assets today. He comments that in spite of the digital revolution, the hiring process hasn’t changed from its low priority, last minute, subjective roots.

In fact, his analysis of current statistics and many case studies leads both of us to recommend a focus on a set of key hiring principles that shouldn’t come as a surprise, but don’t seem to get followed very often these days by new companies, or even the more mature ones:

  1. Look for a cultural fit before a skill match. In the past, very little consideration has been given to finding people who share your purpose and values for the business. But today, in this era of relationships, people who fit your culture have proven to be much more engaged and productive than others who are more skilled, but feel like outsiders.

    Some of the companies with the best team cultures, including Zappos, even go so far as to offer new employees $2,000 to quit after the first week on the job if they don’t feel a fit with the team assigned. It’s a small cost to prevent a long-term loss.

  2. Give priority to attitude over experience. New businesses need people who have a passion for getting things done with limited resources, enjoy problem solving, and relish constant change. Often times, candidates with more years of experience are frustrated and unproductive in these environments, and are looking for structure and consistency.

    At Twitter, for example, even though everyone gets great perks, including meals, yoga classes, and unlimited vacations for some, employees can’t stop talking about how they love working with other motivated people, where no one leaves until the work gets done.

  3. Be patient when filling open positions. Not planning ahead, and only hiring people in the crisis of an open position is a recipe for creating dysfunctional teams. Having no one is better than someone who needs constant attention, or is working against you. Define a disciplined process, take the time to find multiple candidates, and do proper reviews.

  4. Get interactive in candidate interviews. Some entrepreneurs approach hiring as a test of their selling ability, while others wait for the candidate to sell them. The best approach is to ask open-ended questions, really listen to the answers, and then follow-up for depth. Have multiple team members do their own two-way interviews, and compare notes.

  5. Avoid surprises through proactive homework. Team managers in a hurry to hire often skip references, assuming they won’t get the real story anyway. In truth, much can be inferred from what is not said, and the tone of former managers. Doing multiple calls will reinforce your qualms or eliminate them. Recovery from a surprise bad hire is expensive.

    Another type of surprise is the perfect candidate who walks away at the last minute. This can be avoided by asking about extenuating circumstances before you extend them an offer, such as spousal objections or other pending job offers. Asking will give you the chance to address these considerations, and avoid disappointment and drama.

  6. Do your onboarding with conviction. Integration of a new employee into their team is the right time to communicate the culture and direction of the business, and let them know what is expected of them. The proper training and support right up front is key to retention, the right attitude, and their ability to be influential in driving your business.

Building and managing a great team doesn’t stop when your last position is filled. Keeping the team motivated and happy over time is just as hard. Even happy people expect to be promoted, and do move on to other opportunities, so you have to plan for replacements as well as new business. Is your business able to grow and adapt as fast as the market changes these days?

Marty Zwilling

*** First published on Huffington Post on 03/13/2017 ***

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Monday, March 13, 2017

7 Business Realities That You Don’t Learn In School

virtual-business-realityWhen I started mentoring entrepreneurs and startups a few years ago, I anticipated that I would get mostly tough technical questions, but instead I more often hear things like “Where do I start?” I find that the basics are actually the hardest to answer, just like your parents found out when they first tried to fill you in on the “facts of life” a long time ago.

Most entrepreneurs are not born with the knowledge to run a successful business, so the right place to start is some business training in school, or some practical work experience in a business of your interest, prior to starting your own company. Jumping into a business area you don’t know, because you see a chance for big money, is a surefire path to disaster.

I also found a wealth of books are available to address the basic facts of business life, like the classic by Bill McBean, aptly named “The Facts of Business Life,” based on his forty years running large and small businesses. Bill does a great job of outlining the key realities as follows:

  1. If you don’t lead, no one will follow. Good business leadership begins with defining both the direction and the destination of your company. That’s where you start. From there you need to hone a whole set of skills to survive and prosper, including effective communication, leadership under pressure, and constant adaptation to change.

  2. If you don’t control it, you don’t own it. Control in business requires teamwork, which occurs in successful companies when team members, products, and processes work in unison. You have to define the key tasks that must be handled every day, and institute the proper controls to make sure they happen effectively and consistently.

  3. Protecting your company’s assets must be your first priority. Assets include the obvious equipment, accounts receivable, and cash. Maybe more importantly, your long-term survivability is tied to intellectual property, like trade secrets and patents, as well as other less tangible items like your customer base, your experience, and your skills.

  4. Planning is about preparing for the future, not predicting it. Planning is not just an early-stage activity, but must be an ongoing activity, based on current accurate information as well as educated guesses on future changes. Planning should keep you focused on what’s important, and prepare you for what lies ahead.

  5. If you don’t market your business, you won’t have one. Marketing and advertising are business realties. Word-of-mouth and viral are not long-term solutions. It doesn’t matter how good your product or service is if most of your potential customers don’t know about it. With 200,000 new websites per day, customers won’t find you by accident.

  6. The marketplace is a war zone. Every company has competitors, or there is no market for what you offer. Successful entrepreneurs know they have to fight not only to win market share, but to retain it as well. Past success is no guarantee of future success, and the only way to remain successful is to maintain a fighting mentality.

  7. You don’t just have to know the business you’re in, you have to know business. Understanding one’s industry is necessary but not sufficient to be successful. Many businesses fail simply because they ignore or do poorly one or more of the basic aspects of every business, like accounting, finance, personnel, or business law.

In business, as with people, there is a life cycle of birth, constant maturing, change, and rebirth. Entrepreneurs are ultimately responsible for guiding their business through this life cycle, rather than getting suck in any one stage. This means the entrepreneur has to focus correctly not only on what is important, but also on when it’s important.

Before you start building a business, you really do need to know the basic concepts of leadership, management, and operations, and you need to know how these areas change as a business goes through its life cycle. These are the “street smarts” that many entrepreneurs try to acquire by fast talk and bravado. That’s a painful and expensive way to learn any facts of life.

Marty Zwilling

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Sunday, March 12, 2017

9 Keys To Measuring Your Social Media Campaign ROI

Growing_Social_Media_InfluenceIf you are an entrepreneur these days, or trying to grow an existing business, everyone is telling you that you need to use social media. There are many ‘experts’ out there telling you how to do it, or even offering their services. But very few are talking about how to measure your results and return on investment (ROI), and the right metrics for optimizing your marketing environment.

Jim Sterne, who has written many books on Internet advertising, marketing, and customer service, tackled this complex world of social media metrics in a classic book titled simply "Social Media Metrics." He has one of the first books on this subject, and he breaks the process down into nine key activities, as follows:

  1. Get focused and identify goals. Social media is the realm of public opinion and customer conversations. If you don’t have a clear idea of why you are there, anything you measure will be useless. He suggests you begin with the “big three” business objectives of higher revenue, reduced costs, and improved customer satisfaction.

  2. Get attention and reach your audience. Measuring message delivery in social media is a lot like measuring it in classic advertising, so classic metrics apply. With social media, it is also important to identify how many people see your message as remarkable. That leads to the extra reach of word-of-mouth, commenting, and telling their friends.

  3. Measure respect and find influencers. Your task now includes reaching the people who are key influencers, and understanding their impact. Therein lies the multiplier effect. Your message multiplier velocity and reach are the signals that your offerings have the right scope, spread quickly, and resonate with your target audience.

  4. Track the emotional sentiment. Counting is fine, but analyzing the outpouring of millions of souls can reveal attitudinal shifts. Tracking public sentiment over time provides invaluable insight and gives you the chance to stay right on top of changes in the marketplace and your organization’s brand equity.

  5. Measure customer response and action. If they read it and like it, do they click through to your web site, or engage with your organization in new and different ways? Action is when people are drawn into a profitable and sustainable relationship with your company. That’s where the money is.

  6. Get the message from your customer. With the customer in control, you need to make sure you are getting the right message from the right people at the right time. That’s real-time market research, and you need to measure how well you are hearing it and acting on it in your business strategy planning.

  7. Drive business outcomes and get results. Now it’s time to cycle back around to measuring what sort of business impact your efforts are having. Measure to see if you have an increase in revenue, a lowering of costs, and improvement in customer satisfaction. Then it’s time to re-examine your goals to look beyond the “big three.”

  8. Get buy-in from your colleagues. Some executives are slow to understand and embrace new communications methods. Use your results to convince them that social media is a vital part of your marketing mix, and deserves the resources necessary for proper implementation and measurement.

  9. Project the future. Start now to look at where social media will be in two to ten years, and prepare for it. Don’t let the changes takes your organization by surprise, or allow your organization to be the last to implement and measure you in the new world.

The tools to help you with all these actions are still evolving. You can scan the Internet for the many offerings to gather data, but the evaluation of the ‘why’ behind the results is still largely manual. That’s the insight you need to support your efforts to reach higher performance goals. The sooner you find these insights, the quicker you can make better decisions to positively enhance your bottom line.

Marty Zwilling

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Saturday, March 11, 2017

Walking Away From Your Startup Can Leave Deep Scars

bankruptcyIf you are just plain tired of working so hard, or your startup is not getting the traction you expected, should you shut down cleanly, or just file for bankruptcy and walk away? For those who think that bankruptcy is the easy way out, think again. Bankruptcy should always be the absolutely last resort.

The “advantage” of filing for bankruptcy, of course, is that it gets creditors permanently off your back, with no continuing lawsuits, based on funds derived from selling all assets. You can hand the stressful job of liquidating assets and negotiating with creditors over to the court.

The disadvantages are many and long lasting. Your credit rating will be lost for six to ten years, and your business image will likely be permanently damaged. Once declared bankrupt, you as the business owner will likely always face problems opening new business accounts.

To add insult to injury, for a Chapter 7 filing, most courts charge a $245 case filing fee, a $75 miscellaneous administrative fee, and a $15 trustee surcharge, payable in advance (does anyone see the irony in charging for bankruptcy?).

There are many other negative implications to bankruptcy. These include the fact that some loans may not be forgiven, your bankruptcy records are open to public review, and any irregularities spotted later can lead to criminal charges.

The best alternative is always to get the business back on track, and sell it at a reasonable value, or do a normal closedown with full payout to vendors and investors. The next best alternative to avoid the stigma of bankruptcy (and the cost) is to privately negotiate partial business settlements with your creditors.

Making the business healthy may be easier than you think. Usually the top problem is pressing debt or cash flow, so here are four approaches to these problems you should try before giving up on the business and damaging your ability to start future ventures:

  1. Get a short-term loan. Visit some banks for the best rate and repayment plan that will help your business weather the financial storm. Do not rush out and sign for the first loan that is offered to you, or give up after the first bank declines.

  2. Sell assets to raise cash. Now is the time for a thorough inventory of all assets in your business. Chances are that you will find some items you can sell, or property to mortgage, to help alleviate your short-term cash flow problems.

  3. Trim expenses down to the minimum. If you have employees on your payroll, enlist their help. Be honest with them — let them know you might be able to save their jobs, at a reduced salary, if they can help you trim expenses down to the bare minimum.

  4. Find a friend or family-member investor. If they believe in you, there is always someone who will invest additional cash into your business to help you get back on your feet. You just have to find the right one. At this stage, honesty is the best policy.

As a rule of thumb, only after you have exhausted all these options, and you still calculate that it will take more than seven years to repay your debt, then you should consider bankruptcy. The question is which of the many U.S. bankruptcy filing types you should choose.

For business bankruptcy, there is really only one choice – Chapter 7 liquidation, with partial payments to creditors. Chapter 11 is for large businesses seeking to restructure their debt and continue operation, and Chapter 13 bankruptcy is only for individuals.

But the worst thing about bankruptcy is the emotional impact. It will hit you over the head like a death in the family, a major illness, or a natural disaster. For your own well-being, as well as your business image, I recommend you hand off a running business. It may look like more work, but you will keep your sanity, your integrity, and your will to come back strong.

Marty Zwilling

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Friday, March 10, 2017

6 Ways to Kill Bad Habits One Small Step At A Time

kill-bad-habitsEvery entrepreneur I know has a few bad habits they intended to overcome a long time ago, such as micromanaging, or failure to get enough rest and relaxation. As a result, both their business and their personal lives continue to suffer. Wouldn’t you like to know how to make that big step to get past your procrastination and get to your maximum potential once and for all?

Well, the experts are now convinced that the solution is not to try for a big step at all, but to take many baby steps instead. I just finished a new book, “The Leading Brain,” by Friederike Fabritius, and Hans Hagemann, with the science behind this. Fabritius is a neuropsychologist, Hagemann is a leadership expert, and both speak from extensive experience in the world of business.

They point out that establishing good habits and getting rid of bad ones involves the same basic skills; goal setting and motivation, getting started, and staying on track. Most smart entrepreneurs and business owners I know have no trouble with goal setting and motivation, but because they are overwhelmed with the many business priorities, they never get around to fixing themselves.

That’s where starting small comes in. The way our brains are wired, making a tiny step doesn’t raise all the fears of failure or trigger procrastination, and many small steps increases confidence, and makes the desired end seem enticingly near. This is why a continuous improvement strategy works more effectively in business than the “big bang” theory for moving your business forward.

In my role as a mentor to entrepreneurs, I often recommend attacking bad habits and efforts to improve using the six basic strategies outlined by the authors. I have paraphrased them here, with my own specifics on business realities, all with the emphasis placed on “small.”

  1. Ask small questions. If your habit change goal of a two-week vacation away from the office seems too large or risky, simply ask yourself, “What is one small step I can take toward reaching that goal?” You could start by slipping out an hour early for a school event, or take a half-day every week, until you feel comfortable with a longer absence.

  2. Think small thoughts. Now that you have answered your question, it’s time to visualize yourself acting on it. If you isolate a task that makes you uncomfortable, like doing employee performance reviews, and then gradually visualize yourself writing a few notes on their results, over time your mind’s attitude toward the dreaded task will be reshaped.

  3. Take small actions. Thus small questions and small thoughts ultimately lead to small actions. While writing a business plan always seems like a huge task to be done on another day, if you break it into small steps, and commit to assigning each segment to the right person, you may be amazed at how much content you get in a short period.

  4. Solve small problems. Be honest with yourself about small habits you have which may irritate your direct reports, coworkers, or customers. Strive to do so without punishing yourself. This new awareness alone will reduce the probability that you will repeat the same mistakes. If you find a common issue, that provides further incentive to improve.

  5. Give small rewards. We now know that most of our bad habits were originally triggered by the expectation of some sort of reward. For example, smokers looking for stress relief or relaxation. Thus you need to look for a healthier small reward, like a trip to the gym, to relieve stress. Small rewards can often be a greater source of motivation than large ones.

  6. Identify small moments. The little satisfactions can sometimes mean a lot. Use the positive feedback from a satisfied customer to make sure you do the follow-up with every key customer. The smile on the face of your team when they see you on the floor, rather than hiding in your office, will incent you to break that habit of being inaccessible.

In all cases, if you want to make a change that lasts, good intentions are not enough. You need to attach your new routine to a trigger. Frowns rather than smiles should trigger action, rather than anger and stress. Eliminate those bad habits, one at a time, and start some good ones the same way. Soon you will be achieving a new peak level of performance, and enjoying it more. It worked for me.

Marty Zwilling

*** First published on Inc.com on 02/22/2017 ***

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Wednesday, March 8, 2017

7 Keys To Hard Hitting Social Media Use For Business

social-media-for-businessIf you are an entrepreneur today, and not using social media to promote your business, you are missing out on a huge opportunity. But, contrary to what most people preach, it isn’t entirely free. Most social media outlets don’t require a subscription charge, but they certainly require an investment to be hard hitting – in people, in technology, your reputation, and your time.

There are hundreds of consultants out there who will take your money for guidance in this area, but I recommend that you start with some free resources on the Internet, or one of the many recent books on this topic. In a classic one I read a while back, “How to Make Money with Social Media” by Jamie Turner and Reshma Shah, Ph.D., hits all the right points from my perspective:

  1. Lead with a strong relevant first impression. As with many startup activities, you only have one chance for a great first impression. You can jump into social media with a poor brand definition, poorly focused content, unrealistic expectations of customer service, or be killed by malware or viruses. Check your brand definition against the clarity of this one from Xerox for office software.

  2. Assess social media relevance to your product or service. If your business is industrial B2B products, social media may be low on your list. Spend your time and money on other platforms. If you are selling to consumers, especially younger ones, your business won’t survive without an effective social media presence.

  3. Attract key stakeholders with sensitivity. For some customers and many investors, a heavy focus on social networks and viral marketing may be a negative, rather than a positive. A balance of conventional and social communication and marketing is always advised.

  4. Pick the right platform for your business. Within each of the platform categories defined above, there is a right one and a wrong one for your audience. For example, LinkedIn is attuned to business professionals, Facebook is dominated by the social and upwardly mobile crowd. If you are selling a B2B printing platform from Xerox, posting on LinkedIn would likely be the best choice.

  5. Use strong communication and writing skills. Heavy texting experience is not a qualification for communicating via social media. In additional to strong journalistic writing and storytelling, you need business acumen, strategic thinking and planning, and the ability to do the right research. These days, video production is also a useful skill.

  6. Make social media an integrated part of an overall strategy. An integrated marketing strategy starts with an overall brand management strategy, delivered through online and offline communications, promotions, and customer engagement vehicles. For example, if your world is printers, your blogging messages better match your print advertising message.

  7. Find the right tools to analyze the ROI. Return-On-Investment metrics are not new, but the tools are different. Get familiar with current social media tools, such as Google Analytics, SproutSocial, and HootSuite analytics. Over time, put together the data you need to measure your progress on a weekly/monthly/yearly basis.

The key social media platforms today include communications (Wordpress blogs, Twitter), collaboration (Wikipedia, StumbleUpon), and multimedia (YouTube, Flickr). In looking ahead, don’t forget the mobile platforms (iPhone, Android), and location-based services (Foursquare, ShopKick).

As with any resource or tool, you need to optimize your social media costs against a targeted return. That means first setting a strategy and plan for what you want to achieve, then executing the plan efficiently, and measuring results. It’s not free, but it’s an investment that you can’t afford not to make.

Marty Zwilling

*** Published by Xerox Small Business Solutions on 03/06/2017 ***

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Monday, March 6, 2017

How You Should Start a Business Before the Bubble

soap-bubble-businessIn the entrepreneur world, most of the energy I see is focused on the current opportunity bubbles, now including anything mobile, the new sharing economy (Uber, Airbnb), or yet another social media app (Snapchat, WhatsApp). Too few entrepreneurs are searching for the next bubble, so too many funding requests I see as an investor are yet another “me too” solution, with low odds.

So if you are looking to get some extra attention, and potentially capitalize on your own new bubble of opportunity, the first step is to check out where the bubbles are today. In addition, I always recommend the following strategies for critically evaluating every startup opportunity:

  1. Let Google warn you about entering a crowded space. Don’t trust your conviction that your idea has never been done before. If you do an Internet search with a couple of keywords and find ten or more existing competitors, I recommend that you look for a more unique idea. Subtle differences don’t usually attract investors or customers.

  2. Resist the urge to integrate multiple existing products. Intuitively, it may seem that combining multiple apps that you like into one would increase your opportunity, but it actually reduces it. Many customers will not want to pay for all, or will be confused by the additional options. The savings in a combined product must be dramatic to be attractive.

  3. Passion is necessary but not sufficient to start a business. Just because you love the idea, don’t assume that everyone else will feel the same. There is no substitute for market research and independent verification that a large opportunity exists. Even early positive feedback from early adopters may be misleading relative to the volume market.

  4. If it sounds like an easy deal, there is probably a catch. Bubbles of success created by others outside your domain of expertise or experience always look enticingly easy. The problem is that you don’t know what you don’t know. Every industry has a set of unwritten rules for success, so smart entrepreneurs always “stick with their knitting.”

  5. Put the reins on overconfidence and large egos. Change is always hard, so adoption rates for new solutions almost always come in below optimistic estimates. Revolutionary ideas that require customer paradigm shifts require extra time for adoption, and larger budgets for education. Don’t let your ego keep you from seeking advisor and expert input.

  6. Beware of high valuations with low revenue and profit. Existing bubbles are often characterized by high excitement and high valuations, without the requisite intrinsic value or cash flow. These usually crash before you can get there, or don’t necessarily extend to new players entering the same space. All businesses have to earn money for longevity.

  7. Isolate nice-to-have from painful-problem solutions. Everyone may love your idea on how to find the best entertainment in town, but how many are willing to pay real money for your phone app? Even good social causes need to bring in revenue and profit to continue their worthy efforts. Make sure you can quantify the value of your solution.

  8. Cheap money causes more problems than it fixes. Opportunity bubbles sometimes entice investors or your rich uncle to give you more money that you really need. As a result, entrepreneurs often spend unwisely, or chase a bad idea way too far without measuring results. Manage cash flow with an iron hand, on your first dollar or your last.

I do believe we are entering a new era of opportunity for entrepreneurs. The current rate of technology change, as well as customer cultural change, is unprecedented. There are new investment vehicles, like crowdfunding, which gives everyone a chance to own a piece of a new opportunity. So you don’t need to ride an old bubble to success. Now is the time to float your own.

Marty Zwilling

*** First published on Inc.com on 02/17/2017 ***

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Sunday, March 5, 2017

How Impressive Is Your Public Resume On The Internet?

internet-image-resumeWith the advent of LinkedIn, Facebook, and dozens of other websites profiling you, the old-fashioned written resume is an artifact of a hiring practice that is now superfluous. The real “resume” that you have to live with is everything that you or anyone else has posted about you on any site on the Internet. You can’t hide, since no Internet presence will always be a negative.

Today, most personnel organizations readily admit that they already use the Internet to validate what they see in your written resume. You can bet that if the stories don’t match, they will more likely believe the online version. That’s why I emphasized in an old article, “Google Yourself to See How Other People See You,” how important it is to keep your online image clean.

In reality, it doesn’t matter whether you are preparing an online profile for your favorite social network, or a written resume (Curriculum Vitae) in the old-fashioned sense, you need to make certain that it helps your case rather than hurts it. Here are some tips on how to make yours stand out above the crowd:

  • Focus on publishing results. By focusing on results produced and on the needs of the employer, you’ll stand clearly apart from 90 percent of other applicants. Their profiles say, in effect: “I worked these jobs.” Your profile should say: “Here are results you can expect.” That’s much more refreshing and enticing.
  • Make it look professional. You only get one chance for a good first impression. Choose a couple of readable font styles and sizes, and no bright colors or highlighting. Spell check and proofread many times – a single typo or incorrect word can get you rejected. Online, avoid slang and other bad language, and keep your comments positive.
  • Include a current picture. Every professional needs to look professional. You can’t hide, so be proactive and look your best (online or on paper), with a small headshot, rather than force the recruiter to find some not-so-attractive shots on Facebook or Twitter outside your profile. A cartoon picture or picture of your pet won’t impress anyone.
  • Don’t leave time gaps. Big time gaps in your professional life are a red flag. Did you skip those years because you were raising a family, unemployed, or in jail? A short entry for the period, stated as positively as possible, will leave a better impression, and avoid embarrassing questions later. Complaining about terrible jobs won’t get you sympathy.
  • References on request. Mention that references are available, but including them in the profile can leave the impression that these are very generic. Personal references should be customized to support specific requests from a potential employer, and confirmed by you prior to employer contact.

Executives tell me that they are continually frustrated that most of the resumes they see still sound like “job descriptions?” We need to know what you did, not what you were supposed to do. Words like “assisted” and “supported” are not results. Fuzzy words will hurt you.

Offline, it’s a good strategy to customize your resume to match each opportunity. For example, if you are looking at an entrepreneurial position, show a background in leadership. Mention entrepreneurial groups, and highlight groups you started all the way back to college. If it’s an executive position, highlight your results in that context.

I suspect the day is near when Wikipedia will make even social network profiles obsolete, meaning that every professional will have a public profile entry, maintained by a vast number of “online volunteers” (see Bill Gates, for example). The “open source” cross-check process seems to keep these fairly accurate, and the constraints on who is a “public person” go down every day.

Based on what I see today on Facebook, a lot of people have a long way to go in building that professional resume to show the world. Now is the time to check yours and make sure it highlights your strengths, rather than your shortcomings, before it shows up on Wikipedia and your employer’s desk.

Marty Zwilling

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Saturday, March 4, 2017

8 Reasons To Initiate A Startup In A Sluggish Economy

entrepreneur-plan-workAccording to CNN Money, the economy is still very sluggish, with only 1.6 percent growth in 2016. Yet if you wait for an economy bubble before starting your new business, you will be making a comparable mistake to the people who thought during the dot-com bubble "all I have to do is a startup, and I'll be rich." In reality, what matters more is who you are, not when you do it.

Like Paul Graham, founder of Y-Combinator, said a long time ago, I see startups succeed or fail every day based primarily on the qualities of the founders. The economy has some effect, but as a predictor of success it’s a rounding error compared to the founders. If you're worried about threats to the survival of your company, don't look for them in the news. Look in the mirror.

Here are some pragmatic reasons from Paul and others to highlight why you might not want to wait for the next business bubble before taking the leap:

  1. Alternatives are not as tempting. If your alternative is no job security, and low pay, why not work for yourself and build your startup? You'll be investing your time and energy into something with more potential upside in future. If you're talented and have always toyed with the idea of a startup, financially it makes sense to do it now.

  2. More available talent. It's hard to hire good people because they already have a job. But in a lesser economy that's not true -- companies have exploded and laid-off everyone, even the stars. Check your business network for a great co-founder or a great designer.

  3. Low cost infrastructure. Notice the empty offices that are wasting away as you drive down the street? Make them an offer. Need less expensive advertising? Ad revenue is still down as companies right-size marketing budgets. Negotiate, or use social networks, which are virtually free.

  4. Competitors are vulnerable. They have higher overhead, long-standing bills, yearly advertising contracts and high office leases signed years ago. Their prices are high and hard to lower. They're eating cash. You have none of these pains; you're sipping cash with no overhead and lots of time to devote to coddling new customers.

  5. Technology progresses. So for any given idea, the payoff for acting fast in a struggling economy will be higher than for waiting. Technology trains leave the station at regular intervals. If everyone else is cowering in a corner, you may have a whole car to yourself.

  6. Markets don't "reduce headcount." As a startup, you have more control over your customer base. You’re probably not going to lose your customers all at once, even though they may drop off individually if they can no longer afford you.

  7. Some business opportunities go up when the economy is down. While inventory liquidation is not an especially pleasant business, it's an example of one that generally does well during economic downturns. An aging population whose health is declining is going to purchase healthcare products and services—struggling economy or not.

  8. Investors are still looking for good startups. Everyone knows you're supposed to buy when times are bad and sell when times are good. A few investors actually think that way, so be there. You're an investor too. As a founder, you're buying stock with work.

The way to start in a sluggish economy is to do exactly what you should do anyway: manage cash as tightly as possible. If you don’t quit, the most likely cause of death in a startup is running out of money. So the cheaper your company is to operate, the harder it is to kill. And fortunately it has gotten very cheap to run a startup.

The most popular day for starting a new company is the same as starting a new diet: Tomorrow. So take the leap today, not tomorrow. If you don’t get started now, the odds are you'll never start. If you are an entrepreneur at heart, don’t be doomed to a life of trudging through jobs, depending on someone else for salary and bonuses and health care and retirement, a life's work without ownership or upside.

Besides, bubbles are hard to recognize until they burst. We may well be in one right now, but we won’t know until it’s too late. So either way, now is the right to pursue your entrepreneurial passion.

Marty Zwilling

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Friday, March 3, 2017

5 Key Steps In Being A Role Model For Accountability

role-model-for-accountabilityIt’s easy to say to people on your team that they must be accountable for their actions, but it’s not so easy to tell them how to do it. It’s even harder to give them the mindset of wanting to be accountable. In fact, many business leaders forget that they are the role model for accountability, and don’t audit their own actions to make sure that they always practice what they preach.

I just finished a new book, “The Difference: When Good Enough Isn't Enough,” by Subir Chowdhury, which shines a bright light on both these issues. Chowdhury is one of the world’s leading management consultants, and he argues that accountability is only one part of a real caring culture that must be built and maintained to achieve a sustainable competitive difference.

The other key parts of a caring culture include nurturing employees and leaders who are straightforward, thoughtful, and resolute in their approach to the business. All my years of experience in business resonate with that assessment, and allow entrepreneurs to explain to team members what accountability means, and what steps are required to get there:

  1. Willing to proclaim that something needs to be done. We all know of examples where employees and managers see the same problem occur over and over again, but never raise a flag indicating that something can and should be done. A mindset of caring about the business and other workers is required to motivate this first step in accountability.

  2. Accept personal responsibility for tackling an issue. People without a caring mindset are quick to point the finger at someone else, or defer totally by saying “It’s not my job.” Leaders must send the message, and show by example, that delivering quality solutions to customers is everyone’s business. People working on problems must be rewarded.

  3. Make positive choices or decisions to act. Making positive choices is difficult with leaders or organizations that tolerate inertia or too much negativity. The right to make choices is one of the most important freedoms we have, so you won’t get accountability from employees that don’t feel they have the mission and training to make decisions.

  4. Think deeply about the consequences of each choice. It is easy to make a poor choice if you are not thinking about the consequences of that choice. Are you working to get a problem off your back or only serving your ego? Is what you are about to do the best long-term solution for the customer, or merely an expedient? Think before you act.

  5. Set high expectations for yourself and your team. When you set your own sights high, you cannot help but inspire others. When you inspire others, you make it easy to become more accountable yourself. Inspired team members will then set their own target higher, and that momentum will lead to better customer experiences and business success.

To make a real difference in your business, you need to be the role model for accountability, as well as nurturing these additional facets of a caring mindset across your whole business:

  • Culture of direct and open communication and respect. Your team’s ability to be straightforward and honest suffers when they are afraid, egos dominate, or people don’t trust that they will be treated fairly. Too often, leaders hide business realities and personal mistakes, but expect everyone else to understand and do the right thing.

  • Culture of individual empathy and thoughtful listening. Real listening involves not just hearing what others say, but trying to put yourself in their shoes, to fully understand the message. For managers, this requires getting out from behind your desk, going to the factory floor, meeting with customers, and being accessible at any time to your team.

  • Culture of passion, determination, and perseverance. This is a mindset that every problem can be resolved, and every situation can be improved. It requires humility and a willingness to change and adapt, even an acceptance that continuous improvement is the norm. People in this culture don’t ever settle for less than their personal best.

Thus you can see that accountability isn’t easy. It can’t be accomplished by edict, but it can be taught by example, by leaders who practice the principles they want their team to follow, and leaders who build a mindset of caring throughout the organization. How long has it been since you have taken a look in the mirror at yourself and your organization in this respect?

Marty Zwilling

*** First published on Entrepreneur.com on 02/24/2017 ***

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