Monday, November 23, 2020

6 Tips To Avoid Being Blindsided By A New Competitor

ahead-of-the-pack-businessmenEvery entrepreneur and business executive knows that continuous innovation is required to survive, but most struggle with this more than any other challenge they face. They know they need to act proactively, but still are often blindsided by a new competitor coming out of the blue with a future they never imagined. Innovation driven by the next crisis is not leadership.

I remember the classic book, “The Three-Box Solution: A Strategy for Leading Innovation,” by Vijay Govindarajan, one of the world’s leading experts on strategy and innovation. He succinctly outlines the key behaviors that I believe every business leader must focus on, to drive innovation without waiting for the next competitive crisis:

  1. Avoid the assumption that current gifts will keep on giving. This is a trap of the past to be avoided at all costs. The best leaders selectively forget the past, and are constantly on the lookout for the future’s raw material of new ideas. They overtly set out to create the future as a mission distinctly separate from their performance engine of today.
  1. Be alert to “weak signals” of non-linear shifts and trends. To do this, leaders must eliminate the noise of obsolete ideas and activities, by creating protective structures, including dedicated teams focused on innovation. They need to regularly listen to a few mavericks and outsiders who routinely generate nonlinear ideas and trends.
  1. Create the future as a day-to-day business process. The future needs to be treated as today by a team and a process that is insulated from interference, but empowered to draw on necessary performance engine resources. The trick is not to sweep everything aside, but to balance relevant aspects of now while making room for what is new.
  1. Sponsor experiments and measure like new investments. Experiments on today’s revenue engine necessarily focus on short-term financial goals. Experiments on future ideas should be measured like investments, and judged on longer-term potential, allowed to iterate, and focused on learning and adapting quickly. Both are always recommended.
  1. Constantly build new skills to be resilient in the face of change. Ensure your firm’s fitness to act on new opportunities, and develop an evolving sense of where the future lies. A business that relies on static skill replacement is falling behind, and ripe for the next competitive crisis. Build a process also for divesting those who have lost their value.
  1. Invest more energy in the “horse you can control.” Most executives admit to spending huge amounts of time and energy on issues they can’t control, including the economy, regulatory changes, and competitor moves. The best leaders spend more time on their own processes, skills, and hard decisions on what to keep and what to divest.

Govindarajan recommends a simple and practical “three box” framework for allocating time, energy, and behaviors in the proper balance to foster continuous innovation. These three boxes include managing the present, escaping the traps of the past, and generating breakthrough ideas. This is the only way to exploit change and let go of old ideas, while still profiting from the present.

He relates actual examples of how major companies, including GE, Hasbro, and IBM, have used this framework and strategy to selectively let go of the past and remake themselves on a regular basis to stay vital and competitive. On the other end of the spectrum, technology startups also really need this mentality, since the rate of change there is rapid, and competition is so intense.

Thus, I believe the approach actually works and applies to leaders at all levels – from a small team startup entrepreneur, to a business unit leader in a larger organization, to the chief executive of a multi-national conglomerate. It allows any leader to actively invent the future, rather than consistently be reacting to it. How much of your time is currently spent in crisis reaction mode?

Marty Zwilling

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Sunday, November 22, 2020

6 Tips On Where And When To Look For Startup Funding

gold-money-dollar-currencyOne of the biggest myths I have found in the entrepreneur community is that every startup needs one or more outside investors for credibility and success, and perhaps is even entitled to at least one. They don’t realize that according to statistics from Startup.co, almost 60 percent are funded with personal savings and credit, and another 25 percent get their money from friends and family.

That leaves only about fifteen percent that actually get their funding from investors, through crowdfunding, banks, angels, and venture capitalists. Of course, if you want to be in that number, or you want that number to go up, you have to know how to locate potential investors who fit your profile, requirements, and expectations.

I saw a good summary of the most effective ways to source prospective investors in a classic book, “The Art of Startup Fundraising,” by Alejandro Cremades, who has been there and done that, both as an entrepreneur and an investor. The first step is to set your criteria, including a match for your sector type and stage, and then proactively seek out and contact the best candidates:

  1. Review profiles on professional social media sites. Searching LinkedIn, for example, is a must for contemporary entrepreneurs. It clearly identifies potential investors who meet your profile, and provides contact information. But don’t wait for them to contact you. Draw up a list of the best prospects, and put together your best story for follow-up.
  1. Identify customer executives who need your solution. Many savvy entrepreneurs are able to convince high-potential customers that investing early in a high-value solution, perhaps through an advance on royalties, is in their best interest. Customers benefit from early solution access, priority input on requirements, and personalized customer service.
  1. Reach out to your biggest fans for investor leads. Strong believers in your solution can be your best salesforce to find investors, and some of them may be open to investing as well. Any one of them might find an interested rich uncle, or give you a warm introduction to that professional investor that you have been trying to attract.
  1. Ask your business advisors for warm introductions. There is a good chance that business advisors and mentors also have access to investment capital, or know someone who does. In my experience, an introduction to an investor from a mutual friend or business associate will double or triple your odds of closing a deal.
  1. Talk to thought leaders at relevant industry events. Getting to know leaders at these events will get you visibility and credibility, as well as valuable feedback on your strategy and solution. Industry leaders are a prime source of leads to companies and individuals that may invest. In addition, it’s always better to be friends before you are a competitor.
  1. Review current crowdsourcing sites for a good fit. By using a service such as Onevest, you can also place your startup in the right shop window and let investors come to you. Crowdsourcing is rapidly becoming the key source for finding investors outside the mainstream. It works best for solutions that have social value and mass appeal.

While exploring all these alternatives, don’t forget that the right investor in a majority of cases may be you, through bootstrapping and personal credit. The advantages are many, including avoiding all the cost, pain, and distractions of finding and managing external investors, allowing you to retain full control and all your hard-earned equity for yourself.

The right investor also changes as you move through the different startup stages. Friends and family are key at the idea and early development stages, when you have minimal business valuation. Angel investors typically provide early-stage rollout funding, while venture capital firms won’t be interested until you have real traction and revenue during scaling.

Looking in the right place for the wrong investor won’t help you. But operating in stealth mode, or waiting for that perfect investor to find you, or feeling entitled, is even less effective. The most successful entrepreneurs know where to look and when to look for funding, and the rules are always changing. Maybe it’s time to rethink your startup funding strategy.

Marty Zwilling

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Saturday, November 21, 2020

6 Tips For Combining Passion And Purpose To Stand Out

Yvon_Chouinard_by_Tom_FrostFinding your sweet spot as an entrepreneur needs to start with a meaningful personal purpose that is also a business opportunity. Some people are so passionate about a cause that they forget to consider the lack of business potential, while others are so enamored with profit that they jeopardize their ethics. Both ends of this spectrum fail to bring long-term satisfaction or success.

Many entrepreneurs are finding their “secret sauce” these days by combining a strong purpose with a good business opportunity. For example, the handmade-item platform Etsy sponsors free entrepreneurship courses for underemployed and unemployed people, including assistance in setting up a store on Etsy, thus adding more artists and artisan sellers to their platform.

Patagonia, a successful outdoor products company, combines building safe high-quality products with philanthropic efforts to help the environment. In the name of this cause, the company donates time, services, and at least one percent of their sales to hundreds of grassroots environmental groups around the world. Purpose must not be perceived as just a gimmick.

So the question is how do you find a personal purpose and a business purpose that are in sync, to be the driver of business success, as well as your own happiness? I remember a classic book, “The Purpose Effect,” by renowned author Dan Pontefract, that provides a good framework and background or doing just that. I recommend his tips for creating and maintaining that sweet spot:

  1. Define a personal declaration of purpose. Deciphering one’s personal purpose should be priority one. Keys to this must include how you want to operate your life, and how you incorporate your strengths, interests, and core attributes. Write it down, make it specific, expressive, yet succinct and jargon-free. Then take ownership and make it happen.
  1. Don’t stop believing, learning, and developing. If one stops growing and experiencing, personal purpose will be inhibited. We all change as we mature, and we all need to keep changing. To find new work you love, it helps to do job shadowing or short term rotation. Outside of work, it’s important to join a club, do volunteer work, and help at local events.
  1. Establish a team-defined declaration of purpose. By constructing with the team a purpose-first strategic direction with a role-based mindset, a business will have far greater buy-in from its team to achieve its mission and objectives. When every team member sees purpose in their role, the benefits begin to accrue quickly for all.
  1. Set specific targets for serving all stakeholders. The challenge of every business is to create a win-win relationship between business owners, partners, team members, customers, and the community at large. By setting specific targets, you can apply measurements to chart progress and be able to celebrate successes along the way.
  1. Delight and deliver value to your customers. Without customers, there is no business. Thus even purpose-driven entrepreneurs need to maintain a “customer-first” perspective. When the customer is put first, the team will rally around that focus. When the customers are delighted, they become your best advocates of your purpose and your business.

  1. Create an engaging and ethical workplace. Prioritizing an ethical culture is a critical step to gaining the respect of customers, team members, and the community in the pursuit of becoming a purpose-based organization. Factors which increase engagement include more manager face-time, flexible work rules, and better recognition opportunities.

In the long run, both purpose and business are all about people. Neither of these can be static, and still stay vital. Both should be thought of as in perpetual motion, so finding your sweet spot is not a one-time event. You and your business are on a journey, by way of new experiences, insights, and knowledge, requiring constant attention, or the sweet spot will be lost.

That should convince you that finding and maintaining your sweet spot in business will not be easy. It takes hard work and requires hard choices be made, which can be painful. In the difficult early stages of any business, it can also seem like you are leaving some things for others that should be in your pocket. But you will soon find that the joys of giving far outweigh the taking.

Marty Zwilling

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Friday, November 20, 2020

8 Networking Strategies Pay Big Dividends In Business

Global-Business-Networking-EnhancedThere is no skill more vital to an entrepreneur than effective networking. You can’t build your business alone, and networking is the best way to open doors, professionally and personally. For introverts like me, it’s not easy to step out of your comfort zone and meet new people, but if you approach the challenge correctly, I have found that it can actually be fun as well as productive.

This was illustrated well in the classic book, “Hopping Over The Rabbit Hole,” by Anthony Scaramucci, a well-known entrepreneur, financier, and television co-host of Wall Street Week. He highlights the value and “how-to” of business networking strategy in eight key bullets which resonate with me, and I believe every aspiring entrepreneur practice these early:

  1. Push yourself to take the initiative, rather than wait to be found. If you wait for people to come up to you, they likely won’t be the right people. It pays to do your homework ahead of time on people you expect to find, or people you need to know. Otherwise listen to conversations around you, and join in ones where you can contribute.
  1. Try to find common ground outside of business. In business networking settings, it’s not very memorable to talk only about business. Remember that personal relationships are the ones that set you apart and will grow and last. Look for common family experiences, academic connections, or sports activities. Common interests lead to trust.
  1. Put yourself in a positive state of mind beforehand. Everyone is impressed with people who smile and exude authentic positive energy. Psych yourself up for this, if necessary, before you enter a room. Be the visual image of the people you need to meet, and the right people will gravitate toward you and view you as an influencer.
  1. Exchange connection info and follow up within two days. If you have interest in a real relationship, don’t let the initial connection fade. The follow-up should be simple and to the point, such as a quick email suggesting an opportunity to continue the discussion. Skip the hard sell here, and don’t be afraid to follow-up again in a few weeks if required.
  1. Networking and relationship building should be fun. Learn to relax and enjoy the process, but keep a clear head and remember to save your heated debates for one-on-one discussions in a more private setting. While the ultimate purpose of networking is to advance your career or business, don’t treat it with the formality or structure of work.
  1. Be prepared to give as much as you get from networking. If you start pumping someone you have just met for funding or referrals, he or she will realize that your intentions are shallow. Everyone has something to give to a relationship, no matter what your credentials. Open up and share what you can, before expecting anything in return.
  1. Never be intimidated by business titles and wealth. Successful business people are still people, like the rest of us. They have weathered hard times and failures, and love to talk and offer advice, if you are interested and willing to listen. No matter how shy you are, you must look the other person in the eye, and sincerely get to know them.
  1. Don’t try to be someone you are not, socially, or in business. Networking pretenses almost always lead to disaster. Integrity and trust are required before a new relationship can be productive. No matter how insecure you are, artificial efforts to bolster your image are not recommended. If you humbly treat people as equals, relationships will work.

Of course, business networking is just the beginning of your journey into entrepreneurship, In his book, Scaramucci offers much more – a firsthand, introspective, and candid account of his own failures, successes, and insights that led him to business and financial success. He offers inspiration and a concrete blueprint for achieving your dreams, despite unexpected adversity.

I’ve focused here on the how and why of business networking because I find that technical entrepreneurs, in particular, are often quick to discount and ignore the value of business relationships, in favor of technical conferences and peer experts.

As a technologist myself, I had to learn the hard way that while solutions can be built by a person or two, it takes a network to build a business. How robust is yours today?

Marty Zwilling

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Wednesday, November 18, 2020

5 Rules For Every Business In The New Sharing Economy

sharing-econmy-platformsNow that you can find anything on a moment’s notice via the Internet, people have found that a temporarily unused expensive asset, such as a room in your house, or your car sitting idle, is a new business opportunity. Thus the rise of the “sharing economy,” with collaborative and peer-to-peer (P2P) platforms, including Lyft (rides), Airbnb (lodging), and WeWork (workspace).

As an advisor to aspiring entrepreneurs, I tell people that these platforms are an easy and low risk way to test your fit for the entrepreneur lifestyle, without jumping off the cliff. There are always opportunities to participate in existing platforms, such as becoming an Uber driver, or to start your own platform sharing your favorite hobby. Here are some key principles to consider in every case:

  1. Solve a significant problem for customers with money. Just because you love to share things you cook with the hungry, doesn’t mean you can make it a business. Every sustainable business model has to attract paying customers and revenue, as well as provide something with significant economic or emotional value.

    A specific example of a platform failure in this space, Neighborrow, enabled sharing of relatively low-value items (like power tools, bikes, and kitchenware), where the money saved was often offset by the inconvenience of pickup and delivery. It didn’t scale well.

  2. Look for assets that have no “shelf-life” or idle value. We all know that we can’t profit from lost time, or collect revenue from unused assets. Thus if you have a penchant for collecting clothes, pets, or “stuff,” there may be value in a sharing platform. Unused assets, as well as your free time, have no value on the shelf, and should be marketed.

    The Uber platform capitalized on the fact that people with expensive vehicles, and time on their hands, were willing to provide rides at a lower cost that taxi companies who had to support a fleet of cars. They also offered an app to make the whole process simpler.

  3. Your assets need to be visible, real, and marketed online. If your potential customers can’t find you, or you don’t find them, no sharing will happen and no business model will succeed. Establishing a brand, providing service with trust and a reputation for value, is critical. Don’t expect to rely totally on social media, word of mouth, or a personal web site.

    Airbnb drove its success by a relentless focus on marketing, highlighting top destinations, listening carefully to its user community, and continually testing new ways to improve service and user loyalty. It created a trustworthy brand that scaled well around the world.

  4. You need to foster a new culture, relationships, and loyalty. A business requires a community of advocates and customers who share the same interests and attributes. You have to find or build that engaged community to facilitate a sharing business, which goes well beyond the requirements for an ecommerce or brick-and-mortar business.

    Remember too that “sharing” still strikes many as the opposite of the traditional American dream. Our culture grew up on the idea of having our own private car, home, and our things equate to identity and status. People are changing, but your challenge is real.

  5. Minimize any accountability and privacy concerns. For owners and customers to be willing to collaborate and share assets, they need to trust that your platform and process will protect them from intentional or unintentional incidents that might put them at risk. Be sure to provide assurances, processes, and insurance to eliminate these liabilities.

Although the pervasiveness of the Internet and the sharing economy are far from new, I believe the opportunities out there are still large. The current pandemic has already highlighted new things that can be shared online, including access to healthcare facilities, education resources, and even entertainment venues. New business models are changing the rules of business.

Certainly these new rules will impact existing businesses as well as new startups. The trend in the newer generations is to own less and share more. You need to be thinking about how you can capitalize on sharing in your business area, and adding new business models and services to facilitate these changes. Integrate the principles outlined above, and you too will reap the rewards.

Marty Zwilling

*** First published on Inc.com on 11/04/2020 ***

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Monday, November 16, 2020

8 Business Work Principles That Cannot Be Compromised

future-workAs a business advisor and advocate for entrepreneurs, I find myself almost always talking and writing about change. Yet there are many things about business and work that haven’t changed for a long time, and don’t need to change anytime soon. I’m always surprised when someone doesn’t seem to grasp these basics, or thinks it’s fine to throw the baby out with the bathwater.

I was reminded of a number of these by a classic book, “The Thing About Work: Showing Up and Other Important Matters,” by Richard A. Moran. With a bit of humor, he provides some serious guidelines for struggling career professionals looking to move up, and new entrepreneurs looking to build a company. Moran seems to speak directly from my long-time personal business career.

He points out that “There are lots of things – some big, some not – that we can all do to improve our lives at work.” He manages to highlight a couple of hundred of these with colorful vignettes, but here are eight key ones I found particularly useful for new business professionals:

  1. You can’t win if you don’t show up consistently. Showing up still matters. This is not about clocking in to work. It’s about colleagues, managers, and clients knowing that you care, and know how to find you when they need you. You need to really get to know your team mates and treat work relationships seriously. Someone is always taking attendance.
  1. Peers and customers alike still expect responsiveness. Today it is rare to find people answering phones at work, much less proactively following-up. Yet peers and customers notice phone calls and e-mails not returned in twenty-four hours or less. They expect the same response you give to your best friends. Anything less makes you non-competitive.
  1. Making a to-do list is not the same as getting things done. Everyone is “too busy” these days, but only the best always can demonstrate their list of results. If your list of results includes all the meetings you attended and all the phone calls you made, it’s time to ask yourself “What did I really do today?” Businesses only move forward on results.
  1. Networking effectiveness is a measure of your potential. Productive networking traffic does not happen by default. It takes effort to get out there, do your homework on the best traffic lanes, and follow-up on potentially valuable relationships to make them productive. Networking relationships still drive most promotions, jobs, and new clients.
  1. Work-life balance is not about equity, but about escape. The battle between work and life is no contest – work still wins. If you are committed to devices, work is always at the top of the screen. Yet successful people find an escape to the “life” part of the world. It could be a family, sports, hobby, or TV. All business brains need time to rejuvenate.
  1. Don’t count on job descriptions to define your role. “That’s not my job” has never been a successful excuse in business. Especially as an entrepreneur, every job in the business is yours. Your willingness and your ability to tackle any challenge are the only things that customers, peers, and managers appreciate. Business is not rocket science.
  1. Not finishing things you start kills careers and businesses. Entrepreneurs who claim to be big thinkers are routinely dismissed by investors, in favor of others who execute. Thinkers, and people at work who never say no, accept and start task after task, but they rarely finish one. Crossing the finish line is the milestone in a project that really counts.
  1. The most important skill you need is project management. The person who can demonstrate that he or she can effectively manage a project can write their own ticket for success. That means starting the project, keeping people engaged, and bringing it to a positive completion. If you can manage any tough project, you can probably build a business.

Of course, there are many more work expectations that haven’t changed, but the 80-20 rule still applies. If you are good on the ones listed here, you probably can hold your own on all the rest. You probably already understand why successful entrepreneurs keep starting new companies, even after they sell their first unicorn, and why retirees miss work as soon as they stop doing it.

Are you spending as much time at work focusing on the things that don’t change as you are on the things that must change? I call that the work-work balance. Keep it up, or you may not have a life at work.

Marty Zwilling

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Sunday, November 15, 2020

6 Observations On Key Challenges Facing Every Startup

growth-business-challengesWhen entrepreneurs introduce new products to the market, their passion and conviction often leads them to assume that every potential customer will see the immediate need and value, and will quickly adopt the solution. They are devastated when their business growth never starts or stalls, and they have no idea how to get it moving again.

As an advisor to many startups, I often spend hours with business owners helping them anticipate every possible obstacle to the adoption of their solution, and developing a rollout plan to include antidotes. I remember a classic book, “Jobs to Be Done,” by Stephen Wunker, Jessica Wattman, and David Forber, which details well my perspective on these challenges and counter strategies.

While the authors mission is broader in intent, to provide a roadmap for customer-centered innovation, they definitely codify the principles I espouse in anticipating the primary obstacles to new solution adoption. Here is a summary of their key observations, with our joint specifics on what to expect, and how to overcome these obstacles:

  1. Customers don’t buy what they don’t know and understand. In today’s information overload, marketing is everything. Word-of-mouth is great, but it’s not a launch strategy that stands alone. The more revolutionary the solution, the more important it is to educate customers on a solution’s existence and value. Use every marketing channel available.
  1. Getting people to change behavior can be difficult. If your solution alleviates a high level of existing pain, customers more readily change. Yet most of the startups I see these days are providing a solution that is easier to use, more fun, or more productive. In these cases, you need testimonials, usage details, and return-on-investment examples.
  1. Multiple decision makers required to close a sale. Many healthcare solutions, for example, may appear to have great value to patients, but require doctors to feel safe, and insurance companies to approve. Entrepreneurs need to focus on selling each of the constituents in the chain, recognizing that more time and money are required for growth.
  1. Direct and indirect costs of the solution seem high. The most elegant products have the highest price tags, thus limiting market size. Every customer has a sense of what a solution should cost, based on competition, and the cost of doing nothing. A good tack is to sell exclusivity, or provide case studies to show return on investment and productivity.
  1. Solution brings risk to the customer, or high cost of failure. These days, people worry about the liability potential, or making a dramatic move that may be very expensive to recover from. These fears need to be offset by good marketing, education on benefits, and successful case studies. Expert testimonials and excellent support are essential.
  1. Products so innovative that they define a new category. Consider the Internet of Things (IoT) – a network of connected devices and sensors in a home or facility to allow control or access to almost everything. Just the concept requires learning, acceptance, and understanding value. Your business may die before all these elements come together and customers buy your offering.

Then comes a second set of longer-term obstacles to consider – things that cause customer sales to decline after an initial burst, or to stop usage after initial adoption. Here are the most common issues which cause this obstacle to growth:

  • Solution requires lagging support infrastructure. For example, electric vehicles offer attractive benefits for drivers and the environment, but they also need charging stations and government regulations to facilitate broad usage.
  • Adoption creates new pain points. Many new products sound great, but customers find them overly complex or difficult to use. Other new products are plagued with compatibility or performance problems, and customers quickly defer to new competitors.
  • The luster wears off cool new products. Sometimes cool doesn’t mean better. Very quickly, customers start to look for that usability, improvement in productivity or return on investment. Marketing alone cannot make a product great.
  • Products incorrectly targeted or not targeted. Initial hype can generate a sales spurt, but long-term growth requires a clear fit. The right market is the one that feels the most pain, and has money to spend. Nice-to-have for consumers with no money won’t work.

According to most experts, inadequate attention to these obstacles is the primary reason that more than 50 percent of newly launched products fall short of growth and revenue projections, and only 1 in 100 new products even covers its development costs.

Innovative solutions alone won’t make your business a success. You have to target and appeal to the right customers, and the right jobs that they need done. Is your business properly customer-centric?

Marty Zwilling

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