Monday, January 22, 2018

10 Outsourcing Myths Jeopardize Too Many New Ventures

OutsourcingThese days, it is almost impossible to find a small business where everything is done at the home location, by full-time employees. We are in the age of outsourcing, by any of many popular names, including subcontracting, freelancing, and virtual assistants. These approaches allow your startup to grow more rapidly, save costs, but costly mistakes can lead to business failure.

There are many books written on this subject, but this classic by Chris Ducker, “Virtual Freedom,” manages to pack a lot more practical guidance into a small space that many others I have seen. He is regarded by many as the number-one authority on virtual staffing and personal outsourcing, and is himself a successful entrepreneur based in the Philippines.

I was impressed with his summary of the top ten outsourcing mistakes made by entrepreneurs, followed by real guidance on how they can and should be avoided. In terms of quotes I hear too often, here is my interpretation of his most common mistakes, which every entrepreneur should avoid at all costs, before these assume that outsourcing will be their salvation:

  1. “With outsourcing, we won’t need many managers.” Contractors and freelancers, like any other business, manage their own internal processes, but they can’t manage your business. Don’t over-manage remote workers, but don’t expect them to manage your business. Hire and train your own managers for internal and external work projects.

  2. “With the high-speed Internet, our workers can be anywhere in the world.” Labor rates are lower in some countries, but culture and language match are the real keys to productivity. Countries near you may be in the same time zone for easy communication, but lack the skills you need. As with real estate, it’s still about location, location, location.

  3. “Let’s cut costs by outsourcing all from this point forward.” Some entrepreneurs get outsource-happy to save costs and begin outsourcing everything and anything that lands on their desks. Ideal outsourced tasks are outside your core competency, can be specified in detail, and managed with quantified deliverables and checkpoints.

  4. “Fixed price bidding is the only effective outsourcing model.” Getting a fixed price bid works for well-defined short-term projects, like blogging or programming. But trying to use it on call centers, affiliate marketing, or even data entry probably won’t be effective. Do your research with peers, and check the alternatives on every project. Be flexible.

  5. “Fair compensation is the lowest price we can negotiate.” Outsourcing won’t work if you don’t keep the virtual team happy. Unhappy workers will do a poor job, so cheap is not a good deal. Fair compensation is normally something higher than the market price at the outsourcing location, but lower than you would have to pay in your location.

  6. “I expect everyone working for me to adopt my culture.” The outsourcing team will always try to adapt to your situation, but success depends on their cultural work ethics, time constraints, social status, language quirks, and an overall attitude. Adapting to culture goes both ways, and training is the key. Recognize and embrace differences.

  7. “Current workers will manage the outsourcing as I grow.” Don’t set up outsourced projects under a professional who doesn’t want to manage, or is simply unavailable to the different work hours, or insensitive to cultural differences. Virtual teams need a lot of stability and structure, extra communication, standard protocols, and contingency plans.

  8. “My IT budget will go down as remote users use their own tools.” When you sign up remote workers, you’ll start to rely heavily on collaborative tools, Internet bandwidth, and new data security tools. You will need to invest more in training your own team, and increase your capital budget for new hardware and software. Don’t get caught off guard.

  9. “Utilization and personal growth of virtual employees is not my problem.” Some entrepreneurs view their outsourced employees as temps, or as a cheap way to staff the company during its startup phase. You should never hire internal or external staff based solely on what they can do now. Bored and unmotivated teams are never cost-effective.

  10. “I’ll outsource software development, since I don’t understand it.” Entrepreneurs need to know every component of their business at a management level, or have a cofounder who does. Relying totally on a virtual team implies they are managing your company, not you. If you don’t know where you are going, you probably won’t get there.

In summary, an entrepreneur should never approach outsourcing as an inexpensive and easy method of offloading work. With modern technology, and worldwide reach, it should be seen as an important tool for building an efficient, lean, and competitive business, optimized to give you more time for strategic focus.

As every entrepreneur quickly learns, their time is a scarce resource, and it can’t be outsourced. To grow the business, every entrepreneur needs to spend more time working on the business, rather than in the business. How many hours a day are you working on your company? Maybe it’s time for some smart outsourcing.

Marty Zwilling

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Sunday, January 21, 2018

10 Signs That The Age Of The Entrepreneur Is Here Now

age-of-the-entrepreneurWith the current strong economy, and sparked by the last recession, I’m seeing a real resurgence of entrepreneurial spirit, and more startup activity than ever before. I believe the days of the “job work” mentality are thankfully waning, with more people looking to get satisfaction by making the world a better place, rather than just tolerating brain-numbing work to fund enjoyment elsewhere.

According to the 2017 Kauffman Startup Activity Index, the share of new entrepreneurs who started businesses to pursue opportunity rather than from necessity reached 86 percent, more than 12 percentage points higher than in 2009 at the height of the Great Recession. In addition, young businesses enjoyed a three-decade high five-year survival rate of nearly 50 percent.

There is additional encouraging news for aspiring entrepreneurs on many fronts, just in case you are thinking about joining the existing ranks:

  1. Valuations of successful startups have hit an all-time high. An unprecedented number of startups, almost 200 at last count, are now valued above $1 billion, according to a recent Forbes article. Two of these, Uber and Didi Chuxing, have already passed $50 billion. Thus a record number of entrepreneurs (and team members) are getting rich.

  2. Initial Public Offerings (IPO) are back as an exit strategy. Bloomberg reports that forty-nine percent more companies went public in 2017 versus 2016. The average amount raised also increased to $175 million. Investors showed an increased appetite for new stocks, with 18 percent of deals pricing above the marketed share price range.

  3. Funding for early-stage startups is more available than ever. Last year 200,000+ American angels invested an estimated $25 billion in more than 71,000 startup deals. Crowd funding is setting new records worldwide, with an additional $34 billion in 2017, and VCs poured around $150 billion more into private growth companies last year.

  4. Cost of entry for a startup is at an all-time low. I can remember when creating a web site for eCommerce could easily require a million dollar investment. Now you can create a web site for almost nothing - and be on your way with your latest invention or personal services. Smartphone apps can be built for less than $10K, so who needs an investor?

  5. Startup incubators and accelerators are popping up everywhere. Business incubators were all the rage before the dot-com bubble (700 for profit, many more non-profit). After the bubble burst and the recession, more than 80% of them disappeared. Now they are back in every community, with the best even waving money at graduates.

  6. The world is a now single market, both homogeneous and heterogeneous. Entrepreneurs now can think globally about the opportunity, from day one but start locally. This approach, popularly known as “glocalization,” means you design and deliver global solutions that have total relevance to every local market you plan to attack.

  7. Social media is a boon for entrepreneurs and startups. With the key social media platforms today, an entrepreneur can tune a product, build a brand, and grow the business with very low cost and a high interactivity never before possible. The elements include communications, mobile platforms, and location-based services.

  8. Large corporations have lost their ability to innovate. Conglomerates, which were the engines of growth and vitality in the twentieth century, have proven themselves unable to innovate, and have a tarnished public image due to financial woes and poor management. Most now routinely buy startups for new technology and new products.

  9. Women are a growing force as entrepreneurs. According to the latest Women’s Entrepreneurship Report, overall female rates have increased by 10% and the gender gap has narrowed by 5%. Women inherently should have an advantage, since women already control over 70% of household income and $20 trillion of consumer spending.

  10. Baby Boomers are joining the fun in record numbers. The percentage of startups created by entrepreneurs between the ages 55 and 64 continues to grow more than any other age demographic. Driving forces include their need to work and stay energized for the longer life expectancies, as well as the opportunity to give life to long-held dreams.

Looking ahead, Investopedia predicts that in 2018 the supply of VC money will continue to grow. The record-high fundraising activity of the past 18 months has been driving a growing amount of dry powder. They also suggest that a business valuation discipline has returned to the Valley. The investment thesis has shifted from “growth at all costs” to “growth with fundamentals.”

The image of an entrepreneur is at an all-time high, so why would you continue to work in a job that you hate, or provides no satisfaction? Step into a new entrepreneur era where the definition of “work” is something you love. It’s not too late to start, but don’t forget the fundamentals.

Marty Zwilling

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Saturday, January 20, 2018

5 New Venture Deliverables Put You Ahead Of The Crowd

audience-entrepreneursAs a mentor to startups and new entrepreneurs, I continue to hear the refrain that business plans are no longer required for a new startup, since investors never read them anyway. People cite sources like this recent Inc.com article “5 Reasons Why You Don't Need a Business Plan,” or my own blog discussion on this subject, “Situations Where A Business Plan Does Not Add Value.”

Let me be clear – business plans are never “required,” they should never be written “just for investors,” and if you sold your last startup for $800 million, most investors will not ask for a written plan for the next. On the other hand, if you are a first-time entrepreneur, the discipline of building a business plan will dramatically improve your success odds, and your odds of finding an investor.

For aspiring entrepreneurs, or if your last startup failed, it’s all about standing out above the crowd of others like you, and demonstrating your readiness. There is no crowd of successful entrepreneurs. Here is my outline of key deliverables that could convince me that you are a cut above the “average” entrepreneur that approaches me with nothing but a dream and a prayer:

  1. Personal video introduction with elevator pitch. Successful startups are all about the right people with the right stuff. In a two-minute video clip, you can introduce yourself, show your passion and the engaging personality you need to win over customers, partners, and employees. Net out the problem and your solution in the first 30 seconds.

  2. Executive summary glossy. For the more traditional investor, or for that chance meeting in a real elevator or meeting, you need a two-page brochure (two-sided page). The challenge here is not to see how many words you can get onto each side, but how you can make this so engaging in layout and content that an investor will ask for more.

  3. Investor and strategic partner pitch. A perfect size is ten slides, with the right content, that can be covered in ten minutes. Even if you have an hour booked, the advice is the same. I’ve seen a lot of startup presentations, and I’ve never seen one that was too short - maybe short on content, but not short on pages. Pitch your company, not your product.

  4. Written business plan.  Disciplining yourself to write down the plan is actually the best way to make sure you actually understand it yourself. Would you try to build a new house without a plan, if you have never done it before? In simple terms, it is a 20-page document which describes all the what, when, where, and how of your new business.

  5. Financial model.  Most new entrepreneurs tend to avoid the financials of the business, and as a result are badly surprised by cost realities, and can’t answer investor questions. I suggest a simple Excel spread sheet loaded with your revenue, cost, and margin targets covering the first five years of your business. Investors will expect it for due diligence.

Thus you see the business plan is only one of five elements of a package that every aspiring entrepreneur needs to build to stand above the crowd, in your own level of understanding of your business. You need it for communicating to your team, finding strategic partners, or soliciting investor funding from friends and family, angel investors, VCs, and crowd funding.

The ability to communicate effectively is critical to standing above the crowd. Good communication is not talking louder and longer than others, but practicing active listening, and providing a package of other elements to effectively to back up your words. Make yourself unforgettable, in a good way. This means adding value before, during, and after every interaction.

Believe it or not, there are many people in the entrepreneur crowd with outstanding ideas, but building a business is more about execution. If you have built a successful business before, you don’t need all the components above to convince anyone, including yourself, that you can do it again.

Even including repeat entrepreneurs, statistics continue to show that the overall failure rate for startups within the first five years is greater than 50 percent. The real objective of “standing above the crowd” is to give you as an aspiring entrepreneur every chance to end up in the winning group, rather than the crowd of losers.

Starting without any written plan elements may seem easier, but is not the way to win.

Marty Zwilling

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Friday, January 19, 2018

7 Guidelines For Funding New Research & Development

141010-F-DF892-703As an advisor to new business owners, and an occasional angel investor, I see new business proposals daily, many seeking investors to fund early research and development (R&D) of a new product idea. Unfortunately, most entrepreneurs don’t realize that the words “research” and “development” are red flags to investors, and all such proposals are routinely discarded.

Although it may seem counter-intuitive, angel investors and venture capitalists (VCs) are looking for solutions that are already complete, with some real market traction, that need funding to be scaled to a large market, with potential for rapid growth and a large return. Funding new product research and development is just too risky, with a large time delay before any return is likely.

In fact, there are people and organizations amenable to very early stage opportunities, so my advice is target your proposals to the right people to match the stage of your effort. Broadcasting or repeatedly hitting the wrong people is not only is a waste of time, but it kills your credibility with those investors later when you really may need their help. Here are the guidelines I recommend:

  1. Recruit friends and family at any stage. People who know you, trust you, and believe in you above all else are always candidates for requesting an investment. In the trade, this category of investors is called friends, family and fools (FFF), and is the primary source of funding for entrepreneurs with no prior track record in business or technology.

  2. Look to academia and the government for basic research. If you are looking to fund a technology study, before any specific commercial product can be considered, you need to focus on relevant large organizations with deep pockets. Sources include government grants, universities, and large enterprises searching for next generation products.

  3. Find private fund incubators for technology pilots. If you project is more in the applied research stage, ready to solve practical problems, but haven’t yet named a final product, the investment sources should be extended to include large private and public fund initiatives, such as AMA IBM Healthcare or Environmental / CleanTech Projects.

  4. Explore crowdfunding for the prototype stage. Funding for commercial product prototypes is still R&D in the eyes of most VC investors, but in business areas with large consumer opportunities, this activity will catch the eyes of crowdfunding investors. It’s still considered high risk for investment, since manufacturing and quality issues are likely.

  5. Target specialized VCs for the certification stage. These days, almost every new product is not deemed scalable until it has been certified as meeting a multitude of quality and agency standards, including the Environmental Protection Agency (EPA) and Food & Drug Administration (FDA) clinical trials. Industry specific VCs may jump in at this stage.

  6. All professional investors love the scaling stage. Solution development at this stage is the process of scaling up for manufacturing and marketing rollout. The technology is now embodied in a replicable solution, and has been sold to at least one customer. Your fundability with investors now depends on traction and perceived execution capability.

  7. Reinvest early returns to expand the product line. Even for mature startups, there is always a need for further product development and research to compete and diversify the business, and investors understand this. But to prevent confusion with basic R&D, these costs should never be called out as a major category in your use of funds to investors.

Fortunately, in many attractive business domains, including mobile software, Internet apps and ecommerce, the cost of product development is at an all-time low. Developers are finding powerful tools to build mobile apps and websites for a few thousand, rather than millions of dollars. They don’t need the long research and development cycles of a new technology.

Thus smart entrepreneurs often find personal funding for solution development, and save investor funding pitches for the larger scaling-up marketing costs later. Build solutions, not technology, and don’t waste your time and credibility talking to angels and VCs until you have something of interest to them.

Marty Zwilling

*** First published on Inc.com on 01/04/2018 ***

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Wednesday, January 17, 2018

8 Elements Of A Mindset For Success In Your Business

dollar-success-businessMaybe starting a new business isn’t your passion, but in these days of rapid change, where everyone is dealing with uncertainty, I believe that thinking and acting like entrepreneurs will help you get ahead in any profession. In simple terms this means taking control of your life, going after something you love to do, and taking action. Stop letting life decisions happen to you.

As a long-time mentor to aspiring entrepreneurs, I’ve been convinced for some time that good entrepreneurs have the right mindset, and the right attributes, to be good at anything they want. Starting a new business is actually one of the toughest things that anyone could aspire to, since it always involves making decisions and progress in uncharted territory, with no one to follow.

So how do good entrepreneurs do it, and what do they do that everyone can learn from? I saw some good insights in the classic book “Own Your Future,” by Paul B. Brown, who has been studying and writing about business leaders for many years for Forbes, BusinessWeek, and Inc.

He offers a collection of lessons regarding how entrepreneurs think and act, which relate equally well to almost any profession or lifestyle. I’ll summarize a few of his principles here as examples, and I’m adding a few from my own experience:

  1. Use act, learn, build, and repeat to move forward in increments. The entrepreneurial approach is to decide what you want, take a small step toward that goal, pause to see what you have learned, build off that learning, and iterate the process. Other people often seem to bounce around randomly, and be the unhappy victims of other people’s actions.

  2. Embrace smart risks, but don’t be reckless. Smart entrepreneurs work extremely hard to find smart risks, like really large opportunities, but limit potential losses, because they know that success is an iterative learning process, with many pivots required. Other people never take risk, or let their passion overcome them to bet the farm on a long shot.

  3. Avoid overthinking yourself, leading to no action. When the future is unpredictable, as it is today, action trumps thinking. Action leads to evidence, in your job or in the market, which is the best fodder for new thinking. If all you ever do is think, you can gain tons of theoretical knowledge, but none from the real world, and make no real progress.

  4. Nurture relationships with people who can really help. Entrepreneurs build listening relationships with peers, mentors, and investors who may not even be social friends, and ask them the hard questions they need grow their business. Other people think relationships are only for personal and social use, and only mention work while venting.

  5. Find and sell your unique competitive advantages. Successful entrepreneurs focus on amplifying their strengths, while many people focus on eliminating their weaknesses. Everyone needs to sell themselves with the same fervor that entrepreneurs sell their product or service. If you don’t highlight your competitive advantages, no one else will.

  6. Focus on problems you can solve and who is your target. A key step in selling yourself or your product is to identify your customer, and focus on value that you can deliver to that customer. Don’t discourage yourself by broadcasting your value to the wrong people, or not doing your market research on the problem they need solved.

  7. Always see the glass as half-full, rather than half-empty. Maintaining and projecting a positive attitude is critical to career and personal progress, as well as business growth. How many people do you know that always focus on their setbacks, rather than their progress? Every hiring manager, as well as investor, reads your attitude carefully.

  8. Generate energy, rather than sucking it out of others. Your actions must always create positive energy for those around you, or people will hasten to get away from you and your business. Entrepreneurs learn this early, to keep their team and customers motivated. You need to do this, to keep your lifestyle and your career moving forward.

I assure you that if you follow these principles in your current career, and think like an entrepreneur, you will advance more quickly, get more done, and be a happier person. According to a recent article and many others, entrepreneurs running their own business still rank themselves happier than all other professions, regardless of how much money they make.

More career planning and more education is not always the answer, especially when the future is as unpredictable as it is now. Embrace entrepreneurial tactics, assume control of your lifestyle and career, and take action today to assure your own success. Are you still thinking about it?

Marty Zwilling

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Monday, January 15, 2018

10 Keys To Finding That Perfect-Fit Business Partner

Building92microsoftIn my experience, the initial idea for a new product usually comes from a single entrepreneur, but the implementation plan for a new business requires a team, or at least a co-founder. The reason is that any one person rarely has the bandwidth, interest, or skills to manage all the tasks required to build a business. Thus I find that two heads are usually better than one in a startup.

Way back in the early eighties, I had the privilege of working with Bill Gates and Steve Ballmer, when Microsoft was still a startup. I realize now that these two were near-perfect co-founders, with Bill having the technical passion, and Steve bringing the business experience from his prior stint at Procter and Gamble. Their skills and interests were complementary, and their trust in each other was palpable.

The challenge is how to find that elusive perfect-fit partner. As a mentor to aspiring business owners, I often get asked to find that partner for them, since founders are usually too busy with their solution. I always laugh, and ask them if they want me to find a spouse for them as well, since the right partner requires many of same attributes of chemistry, values, and passion.

I may indeed be able to mention a couple of possible names from my meeting with others, but I believe that finding the right co-founder or partners is more critical than any other task for a new entrepreneur, and it needs to be done personally. Thus I always recommend a common series of steps that I have seen working for other entrepreneurs:

  1. Write a partner description for that ideal co-founder. Take a hard look at your own business strengths and weaknesses, and write down what partner skills and experiences would best complement yours. Your best friend, spouse or a family member is the least likely candidate, so don’t start there. Seek input from seasoned investors and peers.

  2. Network to find co-founders as you network to find investors. In fact, your ideal partner may also be an investor. Many of the same venues, such as industry conferences and entrepreneur forums are useful for both. Online, it pays to join entrepreneur and investor groups on social media, and build relationships with people meeting your criteria.

  3. Explore matchmaking sites for business partners. Co-founders are business partners for startups, so don’t be afraid to join and explore sites such as FoundersNation, StartupWeekend, and CoFoundersLab. Also start a discussion on the wealth of business blogs frequented by entrepreneurs, where you can make your interests known.

  4. Support local university entrepreneur organizations. University professors and student leaders always know a selection of top entrepreneurs, alums or staff members who are just waiting to find the perfect match for their own interests, skills and ideas to change the world. Support local activities and you support yourself.

  5. Look for a partner from a different culture or background. In today’s global economy, your ideal partner may be half way around the world, from a different geography and business culture. Every startup infrastructure is flush with smart people from all cultures, many of whom may be ready and able to bring new energy and creativity to your startup.

  6. Re-connect to strong associates from prior assignments. If you were impressed with someone’s drive and capabilities in a prior work role, now is the time to connect again to check their interest and availability, or recommendations they may offer. Use caution to avoid employer conflicts of interest and non-compete clauses.

  7. Relocate to a more lucrative geography. Finding a high-tech co-founder in the middle of Kansas may be a long search. There’s a reason that Silicon Valley and Boston are hubs for high-tech startups. These areas may have not just your co-founder, but also the robust ecosystem your startup needs for investors, programmers and customers.

  8. Explore candidate values and goals outside of work. Co-founder chemistry and interest matches are best explored outside the office. Find some common hobbies or sports to get acquainted before giving away half your company. Business partnerships are long-term relationships, so take your time getting acquainted before closing the deal.

  9. Jointly define major business milestones and key deliverables. This process is the ultimate test of a true shared vision and working style. Building a startup is hard and unpredictable work, and people get busy, so now is the time to jointly commit. If you can’t work as a team now and easily agree, it probably won’t happen at all in the future.

  10. Negotiate and document roles early, including who is the boss. No matter how equal you all are, there is only room for one at the top to make the final decision on hard issues. Especially when everything feels good today, don’t be hesitant to ask the hard questions of each other. Investors and stockholders expect only one chief executive officer.

There are so many challenges in a startup that no founder should try to go it alone, as you need someone to share your successes, and help you recover from the inevitable setbacks. When you find someone that works, I’m betting you will be together on your next startup, and the one after that. Great teams persevere, and success breeds success.

Marty Zwilling

*** First published on Inc.com on 01/02/2018 ***

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Sunday, January 14, 2018

5 Strategies To Capture Sustainability Opportunities

Sustainable_development.svgAs I have said many times, the cost of entry for an aspiring entrepreneur has never been lower, and the total wealth of opportunities has never been larger. Today you can start a new web site business for as little as $100, produce cheap smart phone apps, or lead the effort to tap the multitude of opportunities brought by capitalizing on our concern for dwindling natural resources.

A while back, I focused on the new sharing economy, so this time I will highlight how a shortage of something, like natural resources, should be seen by an aspiring entrepreneur as a wealth of new startup ideas. I was inspired by the classic book, “Resource Revolution: How to Capture the Biggest Business Opportunity in a Century,” by Stephan Heck and Matt Rogers.

Based on their work in CleanTech and sustainability, Heck and Rogers outline five strategies for existing companies to apply to current practices and processes for dramatic efficiency improvements in the use or production of resources. I have recast these strategies here for new entrepreneurs and startups, who thrive on change, to show the wealth of opportunities for them:

  1. Substitute new materials for scarce natural resources. Entrepreneurs have huge opportunities to deliver higher-performance materials at lower cost, like carbon fiber for steel. These will not only save some weight, but build better vehicles, and improve the environment. Consider the startup MarkForged, which takes carbon-fiber to a 3D printer.

  2. Eliminate waste throughout existing processes. Mature companies often lose sight of scrap and changeover time in existing systems. Entrepreneurial minds can more easily see energy, water losses, and inefficient material usage. For example, a startup named Dirtt has been able to take reusable building components to a whole new level.

  3. Upgrade, reuse, or recycle every product. Make every product a natural loop, from creation to use to recycle to reuse. The tighter the loop, the greater the value captured and the stronger the competitive differentiation. Reusing a phone, like the ecoATM story, is more valuable than reusing a chip, or just extracting the gold and silver.

  4. Optimize existing product efficiency, safety, and reliability. Sadly, cars are parked 96% of the time, and shipping containers takes lots of space while empty. You don’t have to be an aspiring entrepreneur to see opportunities for improvement. Startups like Uber for cars, and Staxxon for containers are already there, but these are only the beginning.

  5. Move physical products and services into the digital realm. Steve Jobs has led the way here, by turning music, movies, cameras, and flashlights into apps. The opportunity is to reinvent whole products and whole industries, making things ten times better in the process. This not only saves scarce natural resources, but adds value to the economy.

Relative to all these principles, the “big three” of scarce natural resources consist of land (food), water, and energy. The stark reality is that the people and businesses of the world need to produce more with less in all these areas, while eliminating wasteful practices and policies. The effort has started, but there is still a huge need in all areas.

A key fact for both startups and existing businesses is that we have more than 2.5 billion people in developing countries to support who need to be moving out of poverty and into industrial and service occupations by 2030. This number almost doubles the number who have already moved into the middle class and urbanized. These will be your customers, and your competitors.

Overall, with all these opportunities, entrepreneurship is perhaps the most scarce and valuable natural resource in today’s society, for driving economic growth and social development. So now is the time to invest in all natural resources, by supporting aspiring entrepreneurs, in support of the opportunities they are mining. It’s a higher calling than one more social media platform.

Marty Zwilling

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Saturday, January 13, 2018

6 Hurdles For Going Public Through A Reverse Merger

stock-exchange-reverse-mergerWith the current strong economy, as an active startup mentor, I’m seeing a new surge of entrepreneurs and startups, with the commensurate scramble for funding. There just aren’t enough angel investors and VCs to go around. Thus I’m getting more questions on new mechanisms, like crowd funding, or going public through the side door as a reverse merger.

A reverse merger is the acquisition of an already public company (usually a dormant shell) to avoid the Initial Public Offering (IPO) process and cost, to quickly get your startup on a public exchange for fund raising through visibility and selling stock. It sounds like a great way to raise money, but here are some of the challenges you need to consider before trying it:

  1. Make sure the shell you choose is squeaky clean. The image of shell companies has long been tarnished by true stories of lawsuits and “pump and dump” schemes. I recommend you work only with financial and broker organizations who have done the due diligence required, and who have a track record of success.

  2. It takes real money to get into the game. The cost of the shell, plus the cost of navigating the process, can now easily exceed a half-million dollars, depending on the shell company, according to The Labrecht Group, a law firm based in Irvine, California and Salt Lake City. This approach is not for entrepreneurs already out of money.

  3. Being a public company isn’t cheap or easy. Is your startup really ready to play in the corporate world? It better be an established company, with millions of dollars in annual revenue and profits, following generally accepted accounting, reporting, and audit procedures. A PwC survey averages the burden of public companies at $1.5M a year.

  4. Increased jeopardy and less fun for the entrepreneur. The increased exposure and opportunity of a public company comes with a higher risk to you and your Board with severe civil and criminal penalties for regulatory mistakes and non-compliance. These looming constraints can turn your startup dream into a nightmare, all to increase funding.

  5. Reverse mergers may not get your startup on the Nasdaq. Most public shells ready for sale are not listed on a national securities exchange, but are instead traded in a less glamorous setting, such as the OTC Bulletin Board. Of course, they can be renamed and moved, but that may negate the cost and time advantages originally sought.

  6. Make sure that your team can motivate shareholders. The reverse merger process itself doesn’t raise any capital. That still requires a business team and story that continually motivates stock brokers and public stockholders. You may no longer have the option of investing all earnings into growth, or servicing your special corporate cause.

Yet reverse mergers are not all bad. Even the New York Stock Exchange did one with the acquisition of Archipelago Holdings via a "double dummy" merger way back in 2006 in a $10 billion deal to create the NYSE Group. Some people believe that reverse shell mergers may soon become the preferred IPO approach for emerging high-growth companies.

In fact, the number of companies taking the side door into a public exchange seems to be getting larger, and it has become the legal but still controversial and risky choice for Asian companies seeking to go public in the American market. Being public makes the company more visible to shareholders and potential acquirers, and provides a presumption of future liquidity.

Other than raising money, the reverse merger may be the quickest way to get you to other benefits of a public company. These include the ability to offer meaningful stock options to employees, the use of liquid shares to purchase other companies, and the credibility and public access to information you need to attract key customers and suppliers.

In summary, a reverse merger, or going public through the “normal” IPO process should never be seen as just a way to fund your startup. It is a strategic decision that may indeed attract more funding, but also will likely change the culture and focus of your company, and your role from an entrepreneur to a corporate executive. What price are you willing and ready to pay for funding?

Marty Zwilling

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Friday, January 12, 2018

10 Startup Strategies To Minimize Cash Flow Disasters

cash-flowThe “valley of death” is a common term in the startup world, referring to the difficulty of covering the negative cash flow in the early stages of a startup, before their new product or service is bringing in revenue from real customers. I often get asked about the real alternatives to bridge this valley, and there are some good ones I will outline here.

According to a recent Motly Fool report, the challenge is very real, since around half of all businesses fail in the first five years. Only one-third make it past their tenth anniversary. The problem is that professional investors (angels and venture capital) want a proven business model before they invest, ready to scale, rather than early projections and product development.

My first advice for new entrepreneurs is to pick a domain, such as online web sites and smart phone apps, that doesn’t have the sky-high up-front development costs. Leave the world of new computer chips and new drugs to the big companies, and people with deep pockets. For the rest of us, the following suggestions will help you survive the valley of death:

  1. Accumulate some resources before you start. It always reduces risk to plan your business first. That includes estimating the money required to get to the revenue stage, and saving money to cover costs before you jump off the cliff. Self-funding or bootstrapping is still the most common and safest approach for startups

  2. Keep your day job until real revenue flows. A common alternative is to work on your startup on nights and weekends, surviving the valley of death via another job, or the support of a working spouse. Of course, we all realize that this approach will take longer, and could jeopardize both roles if not managed effectively. Set expectations accordingly.

  3. Get a loan or line-of-credit. This is a most viable alternative if you have personal assets or a home you are willing to commit as collateral to back the loan or credit card. In general, banks won’t give you a loan until the business is cash-flow positive, but there are notable exceptions. Nevertheless, it’s an option that doesn’t cost you equity.

  4. Solicit funds from friends and family. After bootstrapping, friends and family are the most common funding sources for early-stage startups. As a rule of thumb, it is a required step anyway, since outside investors will not normally consider providing any funding until they see “skin in the game” from inside.

  5. Use crowd funding to build reserves. The hottest new way of funding startups is to use online sites, like Kickstarter, to request donations, pre-order, get a reward, or even give equity. If your offering is exciting enough, you may get millions in small amounts from other people on the Internet to help you fly high over the valley of death.

  6. Apply for contests and business grants. This source is a major focus these days, due to government initiatives to incent research and development on alternative energy and other technologies. The positives are that you give up no equity, and these apply to the early startup stages, but they do take time and much effort to win.

  7. Join a startup incubator. A startup incubator is a company, university, or other organization which provides resources for equity to nurture young companies, helping them to survive and grow during the startup period when they are most vulnerable. These resources often include a cash investment, as well as office space, and consulting.

  8. Barter your services for their services. Bartering technically means exchanging goods or services as a substitute for money. An example would be getting free office space by agreeing to be the property manager for the owner. Exchanging your services for services is possible with legal counsel, accountants, engineers, and even sales people.

  9. Joint venture with distributor or beneficiary. A related or strategically interested company may see the value of your product as complementary to theirs, and be willing to advance funding very early, which can be repaid when you develop your revenue stream later. Consider licensing your product or intellectual property, and “white labeling.”

  10. Commit to a major customer. Find a customer who would benefit greatly from getting your product first, and be willing to advance you the cost of development, based on their experience with you in the past. The advantage to the customer is that he will have enough control to make sure it meets his requirements, and will get dedicated support.

The good news is that the cost for new startups is at an all-time low. In the early days (25 years ago), most new e-commerce sites cost a million dollars to set up. Now the price is closer to $100, if you are willing to do the work yourself. Software apps that once required a 10-person team can now be done with the Lean Development methodology by two people in a couple of months.

The bad news is that the valley’s depth before real revenue, considering the high costs of marketing, manufacturing, and sales, can still add up to $500K, on up to $1 million or more, before you will be attractive to angel investors or venture capital.

In reality, the financing valley of death tests the commitment, determination, and problem solving ability of every entrepreneur. It’s the time when you create tremendous value out of nothing. It’s what separates the true entrepreneurs from the wannabes. Yet, in many ways, this starting period is the most satisfying time you will ever have as an entrepreneur. Are you ready to start?

Marty Zwilling

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Wednesday, January 10, 2018

6 Steps To Empowered Employees And Unstoppable Growth

womens-power-unstoppable-growthAs a business advisor, one of the things I see most often as a drag to productivity and growth is employees who, despite their best efforts, can’t change things that they know are hurting the company. They want to grant deserving customers special concessions, or fix a broken process, but are convinced it may cost them their job, or find that no one above them seems to care.

Perhaps you remember as well when the norm in business was a no return policy, or one size fits all, or getting support meant waiting hours on the phone to reach an unhelpful and unhappy employee. If these still exist in your organization, they are huge red flags and you can be certain that you are losing your best employees as well as customers.

Yet every CEO I know believes that his team is motivated and empowered to make the business better for both customers and the company. I’ve spent many hours identifying the causes of this dichotomy, and working on specific steps to fix it. In that context, I found in a new book, “The Unstoppable Organization,” by Shawn Casemore, some good steps for every business owner:

  1. Schedule time for personal feedback from employees. Don’t assume that feedback filtered through your management chain is adequate. We have all heard how messages change, when passed up or down the line, even without any politics or personal agendas. You need to hear first-hand what is working well, and what is not delighting customers.

  2. Plan to redesign and realign employee teams every quarter. Market changes happen rapidly and regularly these days, requiring a realignment of skills, processes, and approaches to keep up. Don’t let your team get stuck in the “way we have always done things.” New perspectives are invigorating for the team, as well as for your customers.

  3. Provide multiple direct communications to every individual. Don’t assume that your priorities, challenges, and support needs will “trickle down” through the management chain. Use multiple and regular communication opportunities to amplify your message, including daily briefings, team updates, as well as management by walking around.

  4. Utilize technology and tools for collaboration and sharing. Things that are not measured cannot be managed. New and better technology is becoming available every day to present dashboards and metrics to show how well processes and empowerment are working, assess workload backlogs, and capture customer feedback and satisfaction.

  5. Identify team champions to drive initiatives and processes. Employees who have the respect of other team members, and have shown more motivation, are typically more effective than managers in driving new processes, and identifying areas that need tuning or change. Make sure these champions get your full attention, recognition, and support.

  6. Assure employee engagement and buy-in for each change. Buy-in starts by clearly listening and implementing ideas from the front lines, with full employee attribution, rather than implying management initiatives. Engagement is always enhanced with the right incentives, financial and recognition, as well as quick reaction to interim feedback.

I recognize that all of these steps go against the traditional business wisdom that growing successful businesses must define inflexible and fully documented customer processes for efficiency, automation, and lower cost. But the reality is that customer and employee expectations have changed, and your competitors have stepped up to the demands for positive experiences.

Of course, every successful business is about achieving the right balance between costs and returns, as well as keeping up with marketplace demands. So while you must continue to strive for repeatable processes, it’s time to recognize that your customers are now much more empowered, and you must do the same for your team.

It will make your organization unstoppable, more profitable, and you will certainly find the business to be a lot more fun.

Marty Zwilling

*** First published on Inc.com on 12/26/2017 ***

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Monday, January 8, 2018

8 Ways New Ventures Burn Resources Without Thinking

too-much-inventoryEvery entrepreneur I know is short on resources, including time, money, and skills. The last thing they can afford is to waste any of these, but in my mentoring and coaching activities, I see it happening all too often. Waste in a startup is any activity that spends resources, but creates no value or competitive advantage in the eyes of customers.

Much has been written about this subject in the world of manufacturing, stemming primarily from the 1990’s work by Taiichi Ohno, called the Toyota Production System (“Lean”). More recently, the concepts have been applied to the general business management context, in a classic book by Certified Turnaround Professional, Thomas H. Gray, titled “Business Techniques for Growth.”

While his book goes well beyond controlling waste as an element of growth and success, I was struck by how relevant the waste points are for every startup and every small business. Thus I am morphing the points here, with specific focus on the entrepreneur, who would never think of themselves in the context of automobile manufacturing:

  1. Offering too many products and services concurrently. In the startup world, this is often seen as a lack of focus. Trying to do too many things with too few resources, usually means the startup will not shine at anything, and will not survive the competition. That’s a deadly waste you can’t afford. My advice is to keep it simple, and do it well.

  2. Inventory and features added too soon. Inventory is money sitting idly by, adding no value. For market changing products, build first a minimally viable product (MVP), and never build products for sale until you have real orders in hand. More features and inventory added early will be wasted as you will need to pivot to match the real market.

  3. Bottlenecks to team productivity. Time utilization inefficiency is wasted time. Make sure you are not the bottleneck for your team. Many entrepreneurs insist on making every decision, and spend too much time working in the business, rather than on the business. The result is lower productivity all around. Hire real help and learn to delegate.

  4. Lack of communication. Communication is the fuel that controls the speed of startups. Delays in sharing, or lack of communication from the top, result in time and effort wasted, adding no value to the business. As an entrepreneur, you need a visible business plan and weekly team meetings, so everyone is working on current issues and real goals.

  5. Poor or too many business processes. Business processes can be your biggest time saver, or your biggest waste. Productive processes start with a plan, and end with metrics that measure value delivered. Entrepreneurs have to embrace creativity and change, yet move quickly with trained teams who can deliver repeatable processes.

  6. Focus on activities rather than results. Too many entrepreneurs confuse action with momentum and results. Focus on the 20% of your important tasks that will deliver 80% of the results. Judiciously apply 20% of your energy where it will achieve 80% of the momentum you desire. Then always measure customer results, not work.

  7. Defective products and services. Poor quality products and poor customer service are doubly deadly wastes. You lose the customer you paid to acquire, and the unhappy customer spreads the word to potential customers that you are spending marketing resources on, but will never win. Recovery efforts are wasted resource which rarely succeeds.

  8. Underutilizing people skills. When people can do more than they are asked or motivated to do, the money spent on others doing that work is waste. The solution is to maximize your own staff productivity first. Recognize and reward the people who excel, provide training, and challenge the team to invent new methods for significant change.

Entrepreneurs and small business always operate on the edge. There is no cushion. Waste means death. Are you as an entrepreneur really ready to deal with the new technology, new regulations, and a new workforce schooled in the digital age? How much time have you spent learning to use the practical techniques and new tools available? It won’t be wasted.

Marty Zwilling

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Sunday, January 7, 2018

10 New Venture Approaches That Can Jeopardize Success

new-venture-ideaStarting a new business is a serious undertaking. Yet many aspiring entrepreneurs I know approach it as a fun project, get-rich quick scheme, or perhaps an expensive hobby. Others quit their day jobs and commit everything to their new passion, without regard for their own well-being, or the welfare of others around them. Neither of these approaches bodes well for success.

As an entrepreneur, you need to start early to implement the discipline and business practices that will lead to success. Even though everyone has an opinion on good early stage practices, I was impressed with the actionable blueprint in the classic book by Scott Duffy, “Launch! The Critical 90 Days From Idea To Market,” on the first steps that determine long-term success.

Duffy emphasizes the often overlooked personal side of entrepreneurship, including balancing finances, relationships, and your health. I will paraphrase here, based on his book, ten of the top failures we both see in the early stages of entrepreneurship, followed immediately by recommendations to mitigate losses from each of these items:

  1. Take the largest risk to get the biggest return. Startups always involve risk, but should not be risky. Every business move should be planned and well thought out, with milestones set in advance. Processes should be in place to ensure that even if something does not go as planned, you, your family, and even your job are secure.

  2. Let your passion drive your cash flow projections. Moderate your optimism. That means coming up with revenue and expense assumptions that balance your natural optimism and determine how much cash the business will really need. Then take your revenue projections and cut them in half. Now take your expenses and double them.

  3. Your idea will attract the funding you need. Assume that raising money from investors to get started will be difficult, unless you have a track record in business, or friends with deep pockets. Will key funding be your family’s entire nest egg, or just half? Are you going to bootstrap, or borrow from personal assets?

  4. Pretend your family doesn’t matter. Discuss the plan and the costs with your spouse or significant other. It’s essential that the two of you be in agreement on key milestones and how much to put on the line. It is better to risk less and be on the same page than to risk more and have your spouse worried and resentful day after day.

  5. Mix personal and business funds. Put your risk capital into a separate checking account before you start. Once you see it moved from your savings account to an account tied to risk, it becomes real. You now have a clear financial framework to help you make better decisions, and you will act more strategically, less impulsively.

  6. Use personal credit cards for business. Keep your personal credit cards separate from the business. You need to do this as a way of tracking, accounting, and leveraging business payments and expenses for tax purposes. Never commingle personal and business funds. Remember that credit card cash advances are very expensive loans.

  7. Keep business expenses in the bottom desk drawer. Hire a bookkeeper or setup a QuickBooks chart of accounts on your first day in business. If you don’t set up a system early, you will spend tremendous amounts of time and energy going back trying to reconstruct business transactions, for you, your investors, and tax preparers.

  8. Don’t formalize the business until you get revenue. Have an attorney set your business up as a Corporation, by the books, before the first transaction. We live in a very litigious society, so you need to at least protect yourself from liability. Set aside money to create a proper legal entity and get business insurance. It is not just about you.

  9. Strive for success before thinking about your own payback. Being unprepared for success is the fastest way to lose your first million. It is important to constantly expand your understanding of how investments work, so that as your business grows and spills off cash, you are able to manage personal profits.

  10. Hedge your bets by starting several initiatives or products. Decide to launch one business or product at a time. The best route to success is not to spread your energy and focus on ten things, hoping one will work. Give that one focus everything you’ve got, or you will likely not have the resources to anything well.

Obviously, avoiding all of these errors won’t guarantee success and won’t save you if you don’t have a viable offering or a viable business model. Being an entrepreneur may start with passion and an idea, but turning that idea into a great business is all about smart execution. Don’t let a million dollar idea turn into a million dollar loss, for lack of proper discipline, personal balance, and business execution.

Marty Zwilling

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Saturday, January 6, 2018

How To Mentor Millennials Into Business Leadership

James_Anderson_and_Richard_BransonMillennials have come a long way in business since I started writing about them almost ten years ago. They started out as that spoiled generation of kids, born between about 1982 and 2004, who had everything, and could care less about business. Today they are in every business, and will likely comprise 50 percent of the workforce by 2020. Their success is now vital to our success.

Like all of us, they have matured tremendously in the last decade, weathering a recession where there were few jobs waiting as they emerged from school, to finding that living with their parents was no longer a panacea for all problems. What they need now is some coaching from more experienced business leaders, to catch up and overcome some unique qualms and challenges.

As a partially-retired baby-boomer in business, I’ve spent much of the last few years mentoring aspiring millennial entrepreneurs, and I’m always looking for more insights into how to help them. I just finished a great book on this subject, “Millennials Matter,” by Danita Bye, which helped me to solidify some jointly recommended strategies for building millennials into next-gen leaders:

  1. Help them strengthen character by finding balance. This balance of character and courage is fundamental to a leader’s confidence, and is the key to getting results. Millennials need our coaching and mentoring to build confidence, to improve how they handle business relationships, tackle new responsibilities, and handle leadership roles.

  2. Build more determination by capitalizing on values. Determination is the character quality needed to fuel resoluteness and resiliency as millennials face business realities. They generally have strong values, around a higher purpose, and these need to be supported and honed to improve emotional stamina and guide business decisions.

  3. Activate a broader awareness of real-world drivers. In addition to the normal hurdles of growing up, millennials have had to deal with a media-saturated world of conflicting messages, celebrity excesses, and viral distractions. We can help them focus thinking inward to their strengths and personality, and outward to real forces in the marketplace.

  4. Provide deeper knowledge to solidify moral fiber. A better understanding of how things works will boost moral fiber. Lack of knowledge can prevent it. A strong moral fiber is the key to acting responsibly, reacting to ethical dilemmas, predicting the intended and unintended consequences of any business decision, and guide toward wiser actions.

  5. Nurture a realistic optimism for overcoming obstacles. Many millennials have grown discouraged or fatalistic about all the uncontrollable issues in our world, such as debt, terrorism, global warming, and a rocky political landscape. We need to focus their attention on what they can control to improve morale, creativity, and a positive mindset.

  6. Be a role model for integrity to validate trustworthiness. Millennials are slow to trust business leaders, since many trust scandals hit during their impressionable years. Thus it is critical that trustworthiness and truthfulness be demonstrated for and nurtured in young leaders. A driving force in trust is showing integrity and concern beyond yourself.

  7. Demonstrate positive action and accountability. Accountability means having the emotional maturity and internal backbone to take responsibility for your own actions and choices, and not shift blame to external factors. Business leaders and mentors must highlight their own focus on positive leadership actions, instead of defensive reactions.

Think of these strategies as an investment in your own future, as well as theirs. The end goal is to inspire them to invest in others, and to make a positive difference as well as a lasting impact. Each of us must us must use our wisdom and life experiences to show millennials, as our next-gen leaders, that they also have enormous wealth to share that goes far beyond monetary value.

Marty Zwilling

*** First published on Huffington Post on 01/05/2018 ***

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Friday, January 5, 2018

How To Validate Your Innovative Product As A Business

Apple_Watch-In my experience with technical entrepreneurs, they work hard on creating an innovative and elegant solution, and assume that customers will flock to them (“if we build it, they will come”). The reality is that successful businesses these days require an equally elegant business model, with the right marketing, delivery channel, price, and target customers, to get real traction.

In fact, many experienced entrepreneurs argue that constructing a business model around your solution is far more critical and difficult than developing the product. Certainly the knowledge and skills required are different. That’s why I recommend that two co-founders are often better than one -- with one expert on the technical solution, and the other with business model experience.

This dual-leadership approach would have avoided the disaster I experienced in a startup a few years ago where beta customers loved our software solution as a free prototype, but we couldn’t sell a single one for the full price that seemed reasonable for all our work and innovation. The founder had simply not done the work to validate a price and the perfect customer segment.

In the investment community, this work is called proving the business model. It starts with validating a business opportunity (a large customer segment willing to pay money to solve a real problem), in much the same way as your proof of concept or prototype validates your technical solution. Here are seven steps I recommend for establishing the right business model:

  1. Validate the value of your solution with real customers. Customers often complain that existing approaches are not intuitive or integrated, while old solutions may be familiar and locked in. Estimate your costs, including a 50 percent gross margin, as a lower bound on a price. Products too expensive for the market won’t succeed, and prices too low will leave you exposed. Match with competitor prices and market demographics.

  2. Confirm that your solution effectively solves the problem. Once you have a prototype or alpha version, expose it to real customers to see if you get the same excitement and delight that you feel. Look for feedback on how to make it a better fit. If it doesn’t relieve the pain, or doesn’t work, no business model will save you.

  3. Finalize your channel and marketing strategy. Now is the time to pitch the business model to a group of customers or a specially selected focus group. This is not just a product pitch, but must include all elements of your pricing, marketing, distribution and support. Here again is your chance to make pivots for almost no cost.

  4. Test your model with industry experts and investors. An advisory board of outside people with experience in your domain can give you the unbiased feedback you need, as well as connections for setting up distribution and sales channels. It’s also valuable to talk to potential investors for their views, even if you are bootstrapping the effort.

  5. Execute a pilot plan in with a limited geographic scope. Good traction on a limited rollout is great validation of a business model. It allows you to test costs, quality and pricing in a few stores or a single city, with minimum jeopardy and maximum speed for recovery and corrections. Save your viral campaign and major inventory buildup for later.

  6. Make every pilot customer commit to be a reference. Give extra attention to those first few customers, and ask for publishable testimonials and word-of-mouth support in return. If you can’t get their support, even with your personal efforts, take it as a red flag that the business will probably not scale at the rate you projected.

  7. Get national visibility at trade shows and industry meetings. You need positive visibility, credibility and feedback from these organizations as a final validation of your business model, as well as your product model, in the context of major competitors. This may also be a great source for leads as a key part of that final rollout and scale-up effort.

Your business model may be a more sustainable competitive advantage than your product features, or it can be your biggest risk exposure. Too many of the business plans I see are heavy on competitive product features, but light on business model details and innovations.

If you or someone on your team hasn’t spent at least the same effort on the business model as on the product service, you are only half prepared for the real world of business today. It’s hard to win by doing half the job, especially if that is the easier half.

Marty Zwilling

*** First published on Inc.com on 12/20/2017 ***

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Wednesday, January 3, 2018

8 Ways Startups Are Changing The Way Businesses Work

PrintThe new era of highly connected and interactive technology is changing not only how business employees interact with customers, but also how they interact with each other, and with their company. I am happy to see reports that young companies are leading the way in these trends, on both the customer and the employee side. Both are required to stay competitive.

Much has been written about the trends on the customer side, but I find less specific guidance on the changes which are impacting the way we interact with peers at work. An exception is the classic book by Alison Maitland and Peter Thomson, “Future Work: Changing Organizational Culture for the New World of Work,” which offers some real insight on this subject.

They point to several key trends in organizational cultures and working practices that can boost output, cut costs, and give employees more freedom. I have added my own insights, based on my experience advising and working with entrepreneurs and startups:

  1. Pay for results, rather than pay for work. Measuring results in itself is not new. What is new is the trend and mentality to just look for results and ignore other traditional management constraints, like the amount of time spent. When and where you do the work does not matter; producing the outcomes to the right quality on time does.

  2. Reward shorter hours of high productivity. People who get paid by results have every incentive to think up smarter ways of getting work done. Their reward is more free time for leisure, or more time for bonus objectives and stock options. It does not mean the culture is soft or lacks discipline. Peer pressure keeps productivity standards high.

  3. Encourage people to work where and when they are most productive. People concentrate better if they can work at least some of the time in a quieter location, or escape the stress of a long commute. Trusted to get on with the job, people tend to be more motivated to do so, especially if they gain more rewards as a result.

  4. Bring your own device to work (BYOD). An increasing number of startups are adopting a BYOD policy, realizing that individuals have their own preferences in the way they access data, collect emails or ‘chat’ to colleagues. Computers are no longer stand-alone dedicated devices, but are built into personal devices, like phones and tablets.

  5. Use of collaborative and other social media platforms. In startups, and even corporate environments, I see the spread of collaborative social platforms such as Slack and Trello. Customers and clients are already on LinkedIn and Facebook, so it makes sense to go where they are, rather than limit your team at work to internal systems.

  6. Explore benefits of employing “mature” workers. New surveys and case studies show that the more mature workers are just as productive as their younger counterparts, are just as successful in training, take less short-term time off, and offer better judgment based on years of experience. They are now actively recruited for many roles.

  7. Mobility and connecting to work via the ‘cloud.’ Virtually every collaboration platform and mainline business process today has a cloud-based deployment option. This follows the ‘work from anywhere with any device’ trend, gives everyone the freedom to work more productively, and not be forced into an outdated standardized solution.

  8. Trend to a ‘contingent’ workforce. Work is becoming more of a tradable commodity, rather than a job, with freelancers and independent contractors, according to recent data. In the US, 55 million workers identified themselves as freelancers in 2016, up 6% from 2014. Freelancers now make up 35% of U.S. workers and earned $1 trillion last year.

Certainly, there is still much work to be done in finding the balance between physical gatherings of team members in the same place at the same time, versus remote working and remote collaboration. The announcement by Yahoo back in 2013, pulling home workers back into the office, triggered a debate on whether some new companies have gone too far.

Overall, as an entrepreneur, you just need to be aware that the notions of work are changing just as fast as the technology for products. It’s an opportunity for innovation that cannot be ignored as a success and competitor differentiator. When was the last time you applied real innovation to the work model in your business?

Marty Zwilling

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Monday, January 1, 2018

10 Steps To More Health And Happiness At Work In 2018

new-years-day-2018Welcome to another challenging new year ahead! You’ve probably already made your resolutions for 2018, but if not, I suggest a renewed commitment to finding happiness and satisfaction in your chosen business lifestyle. After all, most of us spend more hours in this role than any other, and life is too short to spend most of your life unhappy.

As a mentor to entrepreneurs and business owners, and seeing their workload and challenges, it would be easy for me to conclude that starting a business is a big hit to health and happiness. Yet I continue to see articles with evidence that entrepreneurs are happier and healthier than their employees, or even most other professions, regardless of how much money they make.

But whether you choose the entrepreneurial route, or any other approach, I suggest you try the following top ten recommendations from experts around the world on how to stay happier at work:

  1. Do what you love and love what you do. The right reason to start a business is not the money, challenge, or the prestige, but the chance to follow your dream. If you are sick of the corporate grind, take your favorite idea or hobby, and join other happy entrepreneurs.

  2. Stay rooted in the present. While entrepreneurs often have to make pivots and react to unforeseen challenges, constantly thinking about the worst case scenario will place undue stress on your body and drain your mind of resources that are better used in more productive ways.

  3. Keep expectations realistic. It's a lot easier to reset your expectations than reality. Keep your expectations reasonable. So if reality matches expectations you will feel neutral about it. If you succeed, then it is an unexpected pleasure and you are happy.

  4. Spend more time with the family. As a professional, keeping a sense of balance between work and family is always a challenge. The happiest people are the ones who can split their focus between work and family, and get value and satisfaction from both.

  5. Keep track of your wins. Happiness doesn't come from getting something you don't have, but recognizing and appreciating what you do have. Write down five things you're grateful for each day before you start work, or before you leave the office at the end of the day, to retrain your brain to focus on the positive.

  6. Stay fit and rested. You will have more energy and think more effectively if you are in shape and rested. In addition, you’re a role model for partners and employees. Real job performance is more a function of productivity than hours worked anyway.

  7. Find a stress reliever. For some people, it’s quiet meditation, and for others it’s a vigorous workout at the gym. Find something that doesn’t have anything to do with your profession for a change of pace. These will also help you unleash the creative side.

  8. Put trust in your employees. Build a supportive and constructive relationship with your staff. If you empower key employees to make important decisions then every small decision will not have to go through you. It starts with trust and ends with peace of mind. Hire people who have skills you don’t have, but share your values.

  9. Exercise the other side of your brain. If your job is analytical, take some time regularly to explore the creative side of your personality, or vice versa. The happiest people are whole-brained, rather than just left brain or right brain.

  10. Play the optimist role. Optimism is a learned skill. First, straighten out your emotions by keeping a straight body posture. Second, change your tone of voice so that it is cheerful and full of energy. Third, use upbeat or happier words, such as "challenge" rather than "problem," or think of "opportunities" rather than "losses."

Overall, I believe happiness is largely a choice. You can choose to be happy at work, or do the work that makes you happy. Make your resolution today to keep the long road ahead in 2018 a satisfying one. A great way is to become an entrepreneur and join the happiest work segment.

Marty Zwilling

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