Sunday, October 25, 2020

5 Key Elements Of A Business-To-Business Dating Site

dating-b2b-agreement-businessPeople tell me there may be over 8,000 dating sites with scientific matchmaking algorithms worldwide, but I couldn’t find one that focused on scientifically matching companies and people for business-to-business (B2B) relationships. Yet, every business expert tells me that finding good business partners is just as tricky as a good marriage, minus the sex.

Business partnerships come in all shapes and sizes, from finding a single partner to help you run your startup, to signing a strategic agreement with another large company for development, marketing, distribution, or international sales. As with personal relationships, unbalanced deals don’t work, since the dominating entity finds it hard to adapt and appreciate the value of a partner.

Everyone agrees that successful business partnerships can provide cash for growth, reduce costs, provide new geographic markets, or bring whole new customer sets to the table. Bad ones will suck the energy out of your company, and leave you wanting more. The thrill of the chase is always the fun part, but making it work is a lot harder.

Just like personal relationships, if you are contemplating a business partnership, the first consideration should be the characteristics of the key people involved. In addition, your company engines have to synchronize, which requires changes beyond the honeymoon period. Here are five of the key elements of both:

  1. Principals on both sides need to be ready and willing to work with a partner. Some executives prefer to operate in solo mode. If you have worked for yourself for a long time, like living alone and making decisions without consulting anyone else, it may be hard to adapt to a shared decision-making environment.
  1. Look for a match in operating style and work ethics. A business partnership doesn’t come with a no-fault divorce clause. During the “dating period,” look hard for those characteristics that suggest complementary strengths, compatibility, chemistry, motivation, and values. Consider a business “pre-nup” agreement.
  1. Both sides should write down the shared objectives and vision. If there is nothing to write down, or the results are quite different, that’s a big red flag. At this point both need to put in some serious thought about common value systems and how integration will impact current operations and the “next generation.”
  1. Agree on performance indicators measuring partnership effectiveness. Every relationship needs to be mutually beneficial to foster trust and common commitment. If the value is channeled to one beneficiary, with more cost and effort to the other, the equation won’t work for either.

  1. Understand required changes to the current business model. These need to be understood up front, since implementation will likely require staff changes, process changes, and a more complex communication system. Both sides need to evaluate the intangible impact of these.

Even with the best of efforts, in my experience a high percentage of partnerships don’t work in the long run, because the underlying entities have different long-term objectives. This means prior planning for an easy dissolution. Document early the partner agreement detailing what each person is responsible for, who makes what decisions, and how disagreements will be resolved.

In summary, I did find a few sites, like MyBusinessMatches.com and EventMatches, which are a step in the right direction, but they still seem focused on letting you do most the work (at an event) to find the ideal partner. How about finding the best fit for you through something like eHarmony’s “scientific approach to matching” with 29 DIMENSIONS® of compatibility?

I wonder how many dimensions of compatibility there are to a good business partnership? I know it is rarely love at first sight. There is still time for you to be the first eHarmony.com of the B2B crowd!

Marty Zwilling

0

Share/Bookmark

Saturday, October 24, 2020

5 Factors Which Define The Scope Of Your Competition

five-forces-competitor-analysisAs the business economy is expected to rebound from the pandemic, many entrepreneurs are thinking that life will soon get easier, and their opportunity can only grow. In reality, the business world gets tougher every day, with new entrants, new technology, and competitors more easily entering the fray from around the globe.

Way back in 1979, Michael E. Porter proposed his Five Forces framework for analyzing the competitive environment which I think makes even more sense today. Every existing business, as well as every startup, needs to reassess their product or service in the context of these five forces:

  1. Intensity of competitive rivalry. This is where most current business plan analyses focus today. These plans just list a few key competitors out there now, compare feature richness, quality considerations, and pricing. This is an important first step, but it’s only the beginning.

  1. Threat of new competitors entry. Startups that target profitable and growing markets with high returns should realize that these will draw many new entrants. It will certainly also decrease profitability over time, as well as test your sustainable competitive advantage. That leads to switching costs, sunk costs, brand equity, and a host of other considerations, commonly called “barriers to entry.”
  1. Utility of alternative solutions. You are never the only alternative, hopefully just the best, in price, utility, and satisfaction. If you new vehicle costs too much, people take the bus. At some level of function, availability, and price performance, customers jump ship away from you. These elements are referred to as “barriers to exit.”
  1. Bargaining power of customers. This is the degree to which customers can put your company under pressure, or leverage prices, delivery, features, and quality (market of outputs). A key is your differential advantage from alternatives. Small differentials and more competitors give customers higher leverage.
  1. Bargaining power of suppliers. Suppliers of raw materials, components, labor, and services to you can be a source of power over your ability to compete (market of inputs). You need to identify substitute inputs, supplier concentrations, and employee solidarity (labor unions), which can limit you or give you the advantage.

A few years after Porter, Andrew Grove is credited with postulating a sixth force in the marketplace – government, pressure groups, and the public. This force adds the concept of “complementors,” and has led to the growth of partners and strategic alliances to balance the competitive environment.

These forces make up the micro environment of a company, which affect its ability to serve its customers and make a profit. A change in any of them should be your cue to re-assess the marketplace. All startups need to remember their core competences, business model, or network, which are the factors that allow them to maintain a competitive advantage.

One of the key sections of every entrepreneur’s business plan is the analysis of the competition. I especially love the ones that start and end by saying “We don’t have any competitors.” Investors take that to mean either 1) there is no market for your product, or 2) you don’t understand the concept of business and competition. Either way you lose.

I always remind startups that this section of the business plan should not be a negative one, merely listing competitors, with their advantages and head start. It’s your opportunity to highlight and emphasize your relative advantages, whether they be price, features, bargaining power, or any of the six forces outlined above.

On the other hand, there is more at stake for startups than enterprises because startups do not have the same financial capital of their bigger rivals. But with a clear understanding of where the power lies, you can take advantage of a position of strength, improve a situation of weakness, and avoid stepping into a pack of wolves with no protection. It’s a painful end.

Marty Zwilling

0

Share/Bookmark

Friday, October 23, 2020

7 Keys To Moving Your Best Of Breed Odds Up A Notch

Bill-GatesEveryone who starts or owns a business expects to be the best of breed, but only a few achieve that status. As a startup mentor and advisor, I often contemplate what makes the difference between winners and losers. I’m convinced that it’s a lot more than the foibles of any specific market, availability of funding, and just luck of the draw. I believe the best make their own luck.

I’ve noticed that the top performers in business, as in most other professions, have a common set of traits in the way they think, as well as act. So if you aspire to be the next Jeff Bezos or Bill Gates in business, you might want to compare the following traits to your own, and focus on adopting the ones you don’t have, as much as you focus on your next idea to change the world:

  1. Figure out first what you most want to achieve in life. I find business people all around me who are working hard to make more money, when what they really want is a work-life balance that allows them to enjoy family and help others. I advise them to find their personal passion, rather than trying to achieve someone else’s view of success.

  2. Stop dreaming about your passion and start acting on it. Too many aspiring entrepreneurs I know are very quick to come up with new ideas, but are not so quick on the execution side. To be successful in business, you need a high focus on results, as well as thinking. Business implementation requires determination and never giving up.

  3. Constantly strive to learn new things and do things better. The best of you see yourselves as lifelong learners, and able to adapt to change, no matter what your age or level of experience. Always keep looking for ways to improve and grow, rather than ways to slow down and let the business run itself. In other words, stay hungry and humble.

  4. Face and conquer your fear of a step into the unknown. Average business people push their fears ahead of them, and never make the next big step. We all have fears of the unknown, but the best of you will document the challenges ahead of you, and tackle them one by one with a plan, getting the help and learning from each success and failure.

  5. Build relationships to complement your strengths. We all have strengths and weaknesses, so don’t be fooled by your ego. Starting and running a business is not a solo operation, so building the right relationships is key. Capitalize on these relationships by listening well and delegating well. Tap into the strengths of others to fill your gaps.

    The relationship between Bill Gates and Warren Buffett is a prime example. While they have always been in totally different businesses, both still give much credit to the other for their own success. They have long been good friends and learned from each other.

  6. Grow yourself by growing the people around you. The best business people are also the best mentors and coaches. They are not afraid of giving someone a lead or inspiring them to move on to bigger and better things. By helping others, you become stronger in your eyes as well as theirs. They may someday be able to come back and pull you along.

    Sir Richard Branson, founder of Virgin Atlantic and the Virgin Group, now controls more than 400 companies in various fields. He attributes much of his success to his focus on growing the best people, and giving them the opportunity to run his new companies.

  7. Strive to build a legacy as well as a business. Leaving a legacy larger than your business requires that you keep a focus on the bigger picture. The best business people not only build a successful business, but they change the world – perhaps by improving the environment, helping the less fortunate, or fostering a disruptive technology.

    According to many people who know him, Elon Musk has always put a higher purpose above making money. His focus on SpaceX, Tesla, Solar City, and other initiatives all have a large component of “shaping the future,” as well as meeting business objectives.

I believe these traits of proven top performers in business, as well as other professions, are the keys to success that you must emulate, even more than finding that unique innovation or huge untapped market opportunity. Above all, it’s important to move quickly from thinking to doing, learn from your mistakes, and recognize when it’s time to pivot as the world changes around you.

Marty Zwilling

*** First published on Inc.com on 10/08/2020 ***

0

Share/Bookmark

Wednesday, October 21, 2020

5 Key Recovery Strategies Counter Economic Downturns

startup-economic-downturnEvery dark cloud has a silver lining. Driven by the current pandemic, smart entrepreneurs of all ages are jumping into the fray with new ideas, new recovery strategies, and discarding outmoded business models. I see it most in the newest generation of entrepreneurs (Gen-Y), who were shocked out of entitlement into action by an economic downturn.

Donna Fenn, in her book from the last decade, “Upstarts! How GenY Entrepreneurs are Rocking the World of Business,” was one of the first to predict that Gen-Y would lead the charge, bounce back from the recession at that time, and be big winners. She describes a new generation of entrepreneurs that is highly collaborative, quick and alert when it comes to new technologies, and hell-bent on changing the world in general.

Upstarts! examines and analyses this entrepreneurial revolution to reveal critical lessons every Gen-Y entrepreneur and marketer must learn. But the insights I see from her book and elsewhere are equally applicable to startup founders of all ages, and businesses of all ages. Here are five key recovery strategies that both of us recommend to all of you:

  1. Pursue repeat business. It's far less expensive to nail down repeat business from your existing customers than it is to land new ones. Now is the time to reap the benefits of those good customer relationships that you've been cultivating. Viral marketing campaigns to lure new customers will cost you big money.
  1. Focus on your core competency. Examine every cost center in your business. Maybe it’s time to outsource that call center operation, or complex manufacturing setup. Look for operations that are hogging resources without generating significant revenue. With a concentrated point of focus, your company might be well positioned for growth this year.
  1. Snap up top talent. Past layoffs at big companies usually means more great employees on the market now for newer companies. Examine your pool of higher-paid contractors and freelancers. Now is the time to bring on board those people who would have been inaccessible in a better economy.
  1. Respond rapidly to market shifts. The pandemic has almost certainly had a profound impact on your customers: they may have altered their purchasing habits, or found themselves with entirely different needs. It's your opportunity to respond to those shifts. These are chances to broaden your product line, change distribution, offer new services.
  1. Look for hidden sources of revenue. Sometimes your best source of new revenue is right under your nose, like services revenue in support of your products. One entrepreneur in Fenn’s book had a proprietary technology to efficiently manage vendors which works so well that she is now marketing it to other companies for a transaction fee.

Most companies I know agree that the pandemic has taught them the art of laser-like focus, and compelled them to make better decisions, to become more frugal, and to initiate systems and procedures that will help position them make an economic recovery. Simply deciding to lay low and “tough it out” was never a winning strategy.

I agree with Fenn that a recession or pandemic is actually a good “wake-up call” for many in the new generation – it has forced them to face the reality of hard knocks. Similarly, it should be a wake-up call for the rest of us, or we will be overrun by young entrepreneurs with their burning desire to control their own destinies.

But I’m convinced that you don’t need to be an “Upstart!” to capitalize on hard times. Use your experience and your expertise to lead the way, or you will be left in the dust. The first step is to execute your own recovery strategy. Or don’t you even have one?

Marty Zwilling

0

Share/Bookmark

Monday, October 19, 2020

How The Reality That Entrepreneurs Face Is Not Fair

Guy KawasakiMost of the time, I’m all about providing encouragement and inspiration to entrepreneurs. They need it and they deserve it, because entrepreneurs are the lifeblood of our economy. But every so often, I try to give them a reality check, just to keep their feet on the ground and their nose to the grindstone.

A few years ago, I enjoyed one of Guy Kawasaki’s first books, “Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition.” In his classical humorous and cynical style, he could reset your dreaming in a moment. Here is a sampling of ten themes from the book that I think are just as relevant today as they were then:

  1. The reality of starting. It’s not going to get better – it already is. Startup folks are like medieval monasteries: always convinced that paradise is just ahead or that things only recently got worse.

  1. The reality of raising money. The closest real-world analogy to raising money is speed dating. That’s right: In five minutes, people decide if they are interested in you, just as in bars and nightclubs. This isn’t right, and it isn’t fair, but it is reality.

  1. The reality of planning and executing. If you think raising money was the hard part, you’re in for a surprise. Raising money is easy and fun. The real work begins when you have to deliver the results you promised.

  1. The reality of innovating. Many people think that innovation is easy: You sit around with your buddies and magical ideas pop into your head. Or your customers tell you what they need. Dream on. Innovation is a hard, messy process with no shortcuts.

  1. The reality of marketing. Everybody wants to do the fun stuff: shuck and jive with the beautiful people, and create fun marketing campaigns. More accurately, marketing is the process of convincing people that they need your product. That’s not so easy or fun.

  1. The reality of communicating. Entrepreneurship is an outward-focused activity. It requires that you communicate with others in all the modern modes. Every one is a skill you need to master. All it takes is reading this book and practicing for twenty years.

  1. The reality of competing. If you don’t compete with anybody for very long, it may mean that you’re trying to serve a market that doesn’t exist. The question of defensibility is one of the toughest for an entrepreneur to answer. A good answer is not to stop moving.

  1. The reality of hiring and firing. These are black arts for most people. Few people are trained for either, and most depend on their gut. They believe they won’t make hiring mistakes, so will never have to fire anyone. Wrong; and mistakes hurt people and you.

  1. The reality of working. In the beginning, startups are like a clean sheet of paper: nothing but opportunity and upside with a chance to make meaning and change the world. Then the reality of work sets in. Building a success is hard – damn hard, actually.

  1. The reality of doing good. At the end of one’s life, you are measured not by how much money you made, but by how much you’ve made the world a better place. Successful entrepreneurs often switch to non-profits and social entrepreneurship for real impact.

Of course, there is much more, but I think you get the idea. I also hope these themes don’t send a totally negative message, because the book is funny as well as thought provoking. I do believe we all need reality checks to face our challenges head-on, so that we can deal with them and survive, rather than just float along in the clouds until our dreams evaporate.

Marty Zwilling

0

Share/Bookmark

Sunday, October 18, 2020

10 Principles For Surviving Hard Times In Any Startup

Devil-in-business“The devil in the details” is a quote that we have all heard, and clearly applies to startups, where success in the long run is all about execution. But for you as an entrepreneur trying to get started, the devil is really in your mind, where you must prevent drifting, and maintain that confidence, commitment, and passion, to achieve your business dream.

This is highlighted well in the classic book finally published just a few years ago, “Outwitting the Devil,” annotated by Sharon Lechter. It was written way back in 1938, by the famous author of “Think and Grow Rich,” Napoleon Hill. It was too controversial to publish then, due to religious connotations, but still has key lessons for every entrepreneur today.

The premise of the book is an interview with the Devil, where he admits that he dwells in idle minds, and finds it easy to control the minds of drifters. Drifters are people who do little or no thinking for themselves, and allow themselves to be influenced and controlled by other people and circumstances.

In an interview, the Devil confesses that all people need only follow some key principles to outwit him (adapted a bit here for entrepreneurs):

  1. Do your own thinking on all occasions. Pursue your own dreams and your own thinking. Listen to others input, but make your own decisions. For success, entrepreneurs have to overcome any human tendencies toward laziness and indifference, which lead to procrastination and drifting.
  1. Decide what you really want from your business. Set your goal, and create a plan for attaining it. Be willing to sacrifice everything else, if necessary, rather than accept permanent defeat. Drifters chase a business idea for all the wrong reasons, and then give up easily, like get rich quick, or to please someone else.
  1. Analyze temporary defeat, no matter of what nature or cause. Extract from it the seed of an equivalent advantage. In business, it’s commonly accepted that you can learn more from failure than from success, if you choose to learn.
  1. Be willing to give before you receive. Other entrepreneurs and investors will more readily help you, if you have helped them first. In addition, you dramatically increase your odds of success if you learn the business domain first, before you try to lead in it.
  1. Recognize that your brain is a receiving set. Curb your output, and be an active listener, by providing feedback, an optimistic attitude, motivation, and a concern for people. A key part of receiving input is listening to what is not said.
  1. Recognize that your greatest asset is time. This is the only thing except the power of thought which you own outright, and the one thing which can be shaped into whatever material things you want. Budget your time so none of it is wasted.
  1. Recognize that fear generally is a filler. Fear rushes in to occupy the unused portion of your mind. It is only a state of mind, which you can control by filling the space it occupies with confidence and passion in your ability to overcome obstacles.
  1. When you ask for help, do not beg. Take full responsibility, and don’t be the victim. Make sure you earn any help provided, and don’t forget to properly thank your benefactor. In a startup, there is no entitlement to funding, or to a second chance.
  1. Recognize that business is a cruel taskmaster. Either you master it or it masters you. There is no half-way or compromising point. Never accept from a business anything you do not want. You can refuse, in your own mind, to accept it and it will make way for the thing you do want.
  1. Remember that your dominating thoughts attract. To become the master of your destiny, you must learn to control the nature of your dominant, habitual thoughts. By doing so, you will be able to attract into your life anything you choose. Your thoughts create your reality.

I couldn’t help but think that these points are still so relevant today in our own pandemic recovering economy, even though they were written during a comparable challenge over 70 years ago. I guess we all should take comfort in the fact that even though we live in a world of constant change, some things about human nature will always be the same.

Can you outwit the Devil today to succeed in your dream?

Marty Zwilling

0

Share/Bookmark

Saturday, October 17, 2020

5 Generators Of Customer Pain Conducive To Startups

wildfires-in-CaliforniaOne of my favorite sayings is “Real change doesn’t happen until the pain level gets high enough.” There aren’t many of us who love change, just for the opportunity to learn something new, and even we won’t pay much for it. Entrepreneurs who search for real pain points, and build solutions around them, have the best chance of changing the world.

In my opinion, real pain points for most people do not include a new user interface for Facebook, a new programming platform for app development, or a new size smart phone. So why do I see some many funding requests for products along these lines?

As an alternative, if you are an entrepreneur looking for the next big thing, where should you look? Here are some key drivers that will likely lead you to a fundable idea:

  1. A business crisis. The impact of the current pandemic on small businesses and staffing is causing us all pain, and forcing new ways of thinking. Maybe we haven’t seen the results yet, but there are thousands of startup opportunities to offer new alternatives and services, to replace those destroyed by the crisis.

  1. Some kind of natural or man-made disaster. The hurricanes in the Gulf, the wildfires in California, and the monsoon floods around the world, all suggest that real opportunities for change are needed in climate control, forest management, and building design. Usually, people pay to relieve pain before buying luxury items.
  1. When the world gets smaller. When globalization or technology shrinks distances (Internet), painful missing needs become evident, and opportunities abound. Other countries can provide e-commerce with different business models, outsource manufacturing at low cost, and a huge market for new products.
  1. The impact of global instability. Unpredictable forces, such as unrest in the Middle East and China, can quickly change energy cost equations, or availability of critical products. Many of the current opportunities in alternative energy are the result of these forces, as well as the lack of effective government coalitions to conserve other resources.
  1. Truly “disruptive” technologies. I hear this term every day, wrongly applied to new social media site, or a new productivity tool. I’m looking for things like the next Internet, nuclear batteries, or a technology to cure cancer. Recent “paradigm shift” technologies, like the new electric vehicles, still spawn major opportunities.

Of course, there are caveats to every opportunity. Many of the biggest and most obvious ones have non-business and non-technical hurdles, including the following:

  • Government regulations. New medical initiatives and new energy alternative technologies can be delayed or bogged down for years by existing bureaucracies and irrelevant political agendas.
  • Existing infrastructure. Companies with huge existing install bases and infrastructures, such as oil companies or auto manufacturers, often present major roadblocks to the implementation of alternative solutions outside their control.
  • People are slow to accept change. Change is hard for most people. Therefore, it takes time, sometimes whole generations, of education, communication, and incremental proof to get momentum going and overcome old fears.

Professional investors know all of these too well, and are sometimes hesitant to fund any innovation that is deemed to be too disruptive. Of course, you can choose to play it safe with more incremental, modest innovations, There’s nothing wrong with modesty. That’s the great thing about being an entrepreneur. You get to choose your pain.

Marty Zwilling

0

Share/Bookmark