6 Ways Startups Must Match the Pace of Change

Change is about the only thing constant in the world of startups. Despite their own focus on changing the world, they often forget that they too have to change rapidly and often as the market evolves. Too many find that out too late, and are left chasing a rabbit that is long gone.

The solution is to establish and maintain a culture and processes that don’t view change as a discrete event to be spotted and managed, but as an ongoing opportunity to improve competitiveness. Chris Musselwhite and Tammie Plouffe, in an HBR article a couple of years ago on change readiness for large companies, define it as “the ability to continuously initiate and respond to change in ways that create advantage, minimize risk, and sustain performance.”

Since the startup environment is usually more volatile, the challenge there in balancing advantage, risk, and performance, is more critical than in big companies. The following initiatives that Chris and Tammie define for large companies apply just as directly to startups:

1. Improve change awareness. How good are you and everyone on your team at proactively scanning the environment for opportunities, emerging trends, and customer feedback? This contextual focus is critical to innovation and survival – the right product at the right time.

2. Increase change agility. Change agility represents a startup’s ability to immediately and effectively engage everyone in pending changes and innovations. It starts at the top with the founder and CEO, but has to extend quickly to the bottom of the organization. This requires leadership, teamwork, and trust at all levels.

3. Expedite change reaction. This is the ability to appropriately analyze problems, assess risks, and take responsibility for problem-dictated and market-dictated changes, while still sustaining the day-to-day business activities. It’s called the management of unplanned changes, or how well your startup reacts to crises.

4. Implement change mechanisms. Every organization needs to have specific mechanisms in place to facilitate change, including regular effective communication, reward systems that reinforce desired change behavior, and accountability for results. These won’t work in an autocratic or dysfunctional management environment.

5. Build a change readiness culture. Change readiness is hard work, and requires creativity sometimes in conflict with task orientation. People have to have the right attitude, and make the choice from the beginning to be ready to change at any time. They need a sense of urgency to handle change, and confidence in their leaders.

6. Imbue customer change focus. The more everyone in the startup is obsessed with satisfying customer needs and providing better customer service, the more effective the startup will be in adapting to change. Provide direct customer contact to everyone, as well as training.

Experts say that we live in a world where the pace of change is accelerating at the fastest rate in recorded history. On the other hand, change management practices seem to be changing very slowly, resulting in a 70% failure rate of change initiatives. Failure rates this high demand a new mindset and startups are the logical place for this to happen.

For starters, the whole team needs to be constantly trained and encouraged to develop their skills. Relevant skills include continuous improvement of existing methods, processes and devices against a set of quality metrics. The ultimate skills, which lead to innovation and totally new processes, usually come from experimentation and special studies.

In summary, change will happen. If your people and your startup do not change, statistics say you won’t survive. It’s up to you to get out of your comfort zone and make things happen in your startup, rather than let things happen to your business.

Marty Zwilling

10 Rules of Thumb for Startup Investment Valuation

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” Many entrepreneurs stumble at this point, losing the deal or most of their ownership, by having no answer, saying “make me an offer,” or quoting an exorbitant number.

I’ve written about this before, but it’s a mysterious subject, and I’m always learning more. This time I’ll use a hypothetical health-care web site company named NewCo as an example to illustrate the points.

Two founders have spent $200K of personal and family funds over a one year period to start the company, get a prototype site up and running, and have already generated some “buzz” in the Internet community. The founders now need a $1M Angel investment to do the marketing for a national NewCo rollout, build a team to manage the rollout, and maybe even pay themselves a salary.

How much is NewCo worth to investors at this point (pre-money valuation)? What percentage of NewCo does the investor own after the $1M infusion (post-money ownership percentage)? Well, if the parties agree to a pre-money valuation of $1M, then the post-money investor ownership is 50% (founders give up half interest, and lose control). On the other hand, if the pre-money valuation is $4M, the founders ownership remains at a healthy 80% level.

So what magic can the founders use to justify a $4M valuation (or even the $1M valuation) at this early stage? Here are the components and “rules of thumb” that I recommend to every startup:

1. Place a fair market value on all physical assets (asset approach). This is the most concrete valuation element, usually called the asset approach. New businesses normally have fewer assets, but it pays to look hard and count everything you have. NewCo might be able to pick up an initial $50K valuation on this item.

2. Assign real value to intellectual property. The value of patents and trademarks is not certifiable, especially if you are only at the provisional stage. NewCo has filed a patent on one of their software tool algorithms, which is very positive, and puts them several steps ahead of others who may be venturing into the same area. A “rule of thumb” often used by investors is that each patent filed can justify $1M increase in valuation, so they should claim that here.

3. All principals and employees add value. Assign value to all paid professionals, as their skills, training, and knowledge of your business technology is very valuable. Back in the “heyday of the dot.com startups,” it was not uncommon to see a valuation incremented by $1M or every paid full-time professional programmer, engineer, or designer. NewCo doesn’t have any of these yet.

4. Early customers and contracts in progress add value. Every customer contract and relationship needs to be monetized, even ones still in negotiation. Assign probabilities to active customer sales efforts, just as sales managers do in quantifying a salesman’s forecast. Particularly valuable are recurring revenues, like subscription amounts, that don’t have to be resold every period. This one doesn’t help NewCo just yet.

5. Discounted Cash Flow (DCF) on projections (income approach). In finance, the income approach describes a method of valuing a company using the concepts of the time value of money. The discount rate typically applied to startups may vary anywhere from 30% to 60%, depending on maturity and the level of credibility you can garner for the financial estimates. NewCo is projecting revenues of $25M in five years, even with a 40% discount rate, the NPV or current valuation comes out to about $3M.

6. Discretionary earnings multiple (earnings multiple approach). If you are still losing money, skip ahead to the cost approach. Otherwise, multiply earnings before interest, taxes, depreciation and amortization (EBITDA) by some multiple. A target multiple can be taken from industry average tables, or derived from scoring key factors of the business. If you have no better info, use 5x as the multiple.

7. Calculate replacement cost for key assets (cost approach). The cost approach attempts to measure the net value of the business today by calculating how much it could cost for a new effort to replace key assets. Since NewCo has developed 10 online tools and a fabulous web site over the past year, how much would it cost another company to create similar quality tools and web interfaces with a conventional software team? $500K might be a low estimate.

8. Look at the size of the market, and the growth projections for your sector. The bigger the market, and the higher the growth projections are from analysts, the more your startup is worth. For this to be a premium factor for you, your target market should be at least $500 million in potential sales if the company is asset-light, and $1 billion if it requires plenty of property, plants and equipment. Let’s not take any credit here for NewCo.

9. Assess the number of direct competitors and barriers to entry. Competitive market forces also can have a large impact on what valuation this company will garner from investors. If you can show a big lead on competitors, you should claim the “first mover” advantage. In the investment community, this premium factor is called “goodwill” (also applied for a premium management team, few competitors, high barriers to entry, etc.). Goodwill can easily account for a couple of million in valuation. For NewCo, the market is not new, but the management team is new, so I wouldn’t argue for much goodwill.

10. Find “comparables” who have received financing (market approach). Another popular method to establish valuation for any company is to search for similar companies that have recently received funding. This is often called the market approach, and is similar to the common real estate appraisal concept that values your house for sale by comparing it to similar homes recently sold in your area.

Remember that all the components, except the last, are cumulative. Even if a given investor excludes some of the components from consideration in your case, your credibility will be bolstered by the fact that you understand his interests as well as yours. In any case, the analysis will prepare you for the heavy negotiation to follow.

Precision is not the issue here – the task for the entrepreneur is to build a company that is worth at least $50M before thinking about an exit -- no investor wants to spend more than five minutes arguing the fine points of the last valuation dollar.

So what is a reasonable valuation for a company like NewCo? My advice for early-stage companies like this one is to target their valuation somewhere between $1.5M and $5M, justified from the elements above. A lower number suggests that the founders are giving away the company, while a much higher number may suggest hubris or lack of reality on the part of the owners.

Of course, we have all read about the “new” company with $100M valuation, but I haven’t met one yet.

Marty Zwilling

Women Entrepreneurs Surge But Fight Their Demons

Women entrepreneurs are starting small businesses at approximately twice the national average for all startups. Despite some inaccurate stereotypes, the evidence is that they are in every industry, from small consulting firms to medical high technology. As a result, there have also been many new resources and mentors popping up specifically aimed at women.

In most cases, the lifestyle questions asked and the answers given are essentially the same for all entrepreneurs, whether they be men or women. But according to a recent book by Adelaide Lancaster and Amy Abrams, “The Big Enough Company,” based on years of helping women entrepreneurs, the road to success for women does involve its own unique set of demons.

All surveys of women business owners show that women’s business concerns tend to skew towards issues such as finding work-life balance, startup financing, and marketing. But a key problem the authors found even among the best women entrepreneurs was trying to do too much at once. Here is a short list of impacts they commonly reported and all mentors have seen:

1. You feel overwhelmed. This is easy to do when your to-do list is threatening to swallow you whole or when you’re staring your big bad goal in the face. Your work is never done, but that doesn’t mean you need to spend your life catching up. Pace yourself.

2. You feel discouraged. It’s easy to get caught in this mindset and lose sight of what’s already been accomplished. Accept the reality that the business will forever be incomplete, and celebrate the small successes and the big milestones.

3. You are distracted. Everything unplanned seems like an unwelcome distraction, and it’s likely that important opportunities will be missed or be turned down. Don’t forget to pay attention to strategic priorities and time for yourself.

4. You suck all the fun out of your business. Chances are you became an entrepreneur to attain some level of satisfaction in the first place, so remember, the fun is in the building, not just the destination. Stressful journeys don’t lead to joyful outcomes.

5. You compromise your personal motivations. It’s pretty hard to bask in newfound freedom when you don’t even have a chance to breathe. The point is to build the business to honor your needs, not sacrifice them for the business.

6. You make bad decisions about the business you are building. When you’re under the false impression that your business won’t wait, you make decisions that are sub-optimal in the long-term. Be realistic, but don’t settle for less than satisfying outcomes.

7. You burn out. Remember … it’s a marathon. You gain nothing if you’re unable to keep going, especially if you expect your business to have any degree of longevity. Slow down and don’t let your work, passion, and creativity disappear before its time.

The antidote and solution to doing too much is doing less and, of course, doing it well. That doesn’t mean to do less overall, but do less right now, at this very moment. This entails the following:

• Prioritizing. Keep two to-do lists: things you “need to do” and things you “want to do.” Start with what is closest to the money, considering what you have available to make it happen. You are not super-human, so “want to do” things sometimes have to wait.

• Taking baby steps. While vision is great, progress is about putting one foot in front of the other, and taking small steps toward your goals. Other people’s steps always look larger, but in reality we all move forward one small step at a time.

• Creating accountability. Hold your own feet to the fire, and remember that it’s normal to have to do that for everyone else. Create specific goals and deadlines for everyone in the company. To help you, find a coach, create a system, join a group, or get a partner.

• Delegating. You can’t talk about doing less without talking about enlisting help, and relinquishing control. Focus on what you do best, and offload other tasks to people who can do them better, and you will both be happier and more productive.

• Celebrating progress, not just success. When you complete a baby step, or a major milestone, celebrate it. Then keep going. Then repeat. Consider each celebration a demonstration of respect for yourself, the work you have done, and the sacrifices made.

In the past, women have often come to entrepreneurship with fewer resources available to them than men. With this book, and the wealth of other information now available, the tide has turned, and every woman entrepreneur should be able to create a business that works for them. That’s the real definition of success. Go for it!

Marty Zwilling

6 Clues That You May Be Cool as an Entrepreneur

A while back, when a startup founder mentioned to me that he wasn’t sure he had the personality to be an entrepreneur, I realized how important that insight was. My first thought is that if you are more annoyed than energized by expert advice, team suggestions, and customer input, then you should probably avoid this line of work.

Actually, it’s more complicated than that, but that’s a good start. After working with entrepreneurs for more than a decade, I have developed a good “radar” to quickly recognize mentalities that will likely pass the test of investors, employees, and customers.

But it’s easier for me to look in from the outside than it is for you to look out. So here is a list of mentality characteristics which I believe are absolutely necessary for you as an entrepreneur to see in yourself. On the other hand, if you see any of these causing you stress and discomfort, you probably won’t be happy in the role of entrepreneur:

1. You enjoy being the visionary leader. Being able to envision what the business and the industry will be like in years to come is a skill that can guarantee that you will be around for the long haul. What makes most success stories in business is not totally reinventing the wheel, but leading the charge to make the current wheel better.

2. Sometimes you are creative, sometimes logical. A successful entrepreneur has to come up with innovative ideas, but also turn them into a value-creating profitable business. That requires good amounts of both “left brain” and “right brain” activities, with enough common sense to find the balance.

3. Risk energizes you. To really enjoy the ride in the world of entrepreneurship, you need to be able to sustain yourself outside of your comfort zone and have a sense of adventure. Startups never ever go as you anticipated. This is why you need to be ready to go “off the script” and improvise, and enjoy the thrill of victory when it works.

4. Actively seek others input. The quicker you learn not to take it personally (and it’s hard when it’s your business and your creation), the more successful you will be. You will always come across people that will criticize you, no matter how great or valuable your product or service may be.

5. Motivated yet patient. When you start a business, you need to have the frame of mind that this is what you want to do for the rest of your life. Most people want financial freedom, but they want results immediately, and that is not the case 99% of the time. Most successful entrepreneurs understand that overnight success takes years.

6. Jack of all trades. When running a business, you'll be doing a little bit of everything. You have to be good but not an expert at everything you do, and you have to know when to be flexible and when to ask for help. If you are one to specialize in just one thing, then running a business might not be for you.

If you don't fit into everyone’s personal view of an entrepreneur's mentality, please don't be totally discouraged. Winning businesses have been started by people of every type. Yet overall, the facts are that about two-thirds of startups fail, so think hard before you ignore warning signs.

I’m convinced that if entrepreneurs spent half as much time evaluating themselves and what makes them happy, as they do writing business plans, and visiting with attorneys and accountants, they would be winners far more often.

Finally, don’t forget that the most important mentality aspect is to always do something that you enjoy. Life is too short to be going to work every day unhappy. Beyond that, I believe success is a state of mind derived from confidence, self esteem, and what you really want in life. How strongly do you really want to manage a startup?

Marty Zwilling

7 Questions to Ask Yourself Before Asking For Money

The first question most people seem to ask when contemplating a new startup is where they will get investor money. That’s certainly a valid question, but all the money in the world won’t make your business a success if you hate what you are doing, and you don’t have a plan to use it. I suggest that there are several other questions even more important than the money one.

The best way to assure the success of your startup is to do something you love, as opposed to something that will make you a lot of money. Of course, all these things and many more are critical, so it’s important that you keep your priorities straight. Here are the right questions to ask yourself, in the right order, before asking others about money:

1. Do you understand and aspire to entrepreneur lifestyle? Being a startup founder is not a job, but a lifestyle, like getting married versus staying single. In fact, it’s more like being single, since founders usually have no one to lean on, no one to make decisions for them, no one to blame, and no vision to follow but their own.

2. Do you have a passion for your idea and business opportunity? There is no joy in starting a business, if you can’t stand the people, business climate, or the day-to-day responsibilities of the job. Some people relate to service businesses, while others are more comfortable with manufacturing or construction.

3. What type of business startup best fits your mentality? Beyond the traditional new product or service model, you can always buy an existing business, purchase a franchise, join a multi-level marketing (MLM) company, or simply go out on your own as a consultant. Each of these has their unique challenges and payback. Ask around.

4. What level of experience and training do you have for this business? Be wary of stepping into an unknown business area, just because it looks easy or promises a big return. The real secrets of any business are not in textbooks, and you can’t believe everything you read on the Internet. Experience is the best teacher.

5. Do you have real self-confidence and self-discipline? Starting a business is hard work and will require sacrifices. You will be operating independently, making all the decisions, and shouldering all the responsibility. Will you be able to persevere and build your new venture into a success?

6. Do you have a viable plan? If you haven’t yet written down a business plan, you probably have no idea how much money you really need, or even if the opportunity is real. I believe the process of writing the plan is more valuable than the result, because it forces you to think through all the elements, and make sure they fit together and fit you.

7. How much money do you really need? From your plan, calculate the absolute minimum amount you need to make your plan work, and then buffer it by 50%. Consider the non-cash alternatives, like offering equity instead of cash and bartering for services. Fundraising is extremely difficult, which is why most entrepreneurs do bootstrapping.

If you have made it this far, it’s fair to now start asking people where and when you can find the money you need (if any). Professionals will tell you that the sequence is friends and family first, angel investors second, and only then venture capital. Each of these has a cost in time an effort.

The process for all of these is networking (not email blasts or cold-calling investors). Start with the local Chamber of Commerce, industry associations, or investor seminars. Just attending doesn't work. Use your entrepreneurial spirit to start some exchanges and relationships that can lead to your next step.

Starting a business is a marathon, so do your preparation and training before you ask for that bottle of water. Finding money is tough, but it’s not the hardest part. The hardest part is to do it all while enjoying the journey. Get busy, and have fun.

Marty Zwilling

Don’t Look For Investors for All the Wrong Reasons

There is so much written these days about how to attract investors that most entrepreneurs “assume” they need funding, and don’t even consider a plan for “bootstrapping,” or self-financing their startup. Yet, according to many sources, over 90 percent of all businesses are started and grown with no equity financing, and many others would have been better off without it.

According to the book, “Small Business, Big Vision,” by self-made entrepreneurs Adam and Matthew Toren, it’s really a question of need versus want. We all want to have our vision realized sooner rather than later, but it can be a big mistake to bring in investors rather than patiently building your business at a slow, steady pace (organic growth).

In fact, most of the rich entrepreneurs you know actively turned away early equity proposals. Too many founders are convinced they “need” equity financing, for the wrong reasons, as outlined in the book and supplemented with a bit of my own experience:

• Need employees and professional services. Of course, every company needs these, in due time. In today’s Internet world, enterprising entrepreneurs have found that they can find out and do almost anything they need, from incorporating the company to filing patents, without expensive consultants, or the cost to hiring and firing employees.

• Need expensive resources up front. Many people think that having a proper office and equipment somehow legitimizes their business, but unless your business requires a storefront, everything else can be done in someone’s home office, or a local coffee shop, on used or borrowed equipment. Consider all the alternatives, like lease versus buy.

• Need to spread the risk. Some entrepreneurs seem to get solace and implied prestige from convincing friends, Angels, and venture capitalists to put money into their endeavor. If nothing else, these make good excuses for failure – no freedom, wrong guidance, etc.

On the other hand, there are clearly situations where your needs call for investors. Even in these cases, all other options should be explored first:

• Sales are strong – too strong. If you are not able to keep up with demand due to lack of funds for production, and your company is too young for banks to be interested, you will find that investors love these odds, and are quick to go for a chunk of the action.

• Your company has outgrown you. Some entrepreneurs are quick with creative ideas, and even excellent at managing the chaos of initial implementation. That’s not the same as instilling discipline in a larger organization, where most the challenge is people.

• You need a prototype. When you have invented a new technology, you need expensive models and testing, including samples for potential customers. If you don’t have the personal funds to make these happen, investors might be your only option.

• You need specialized equipment. If your solution depends on high-tech chips, injection molding, or medical devices, and you can’t get financing from suppliers, giving up a portion of the company to investors is a rational approach.

• General startup expenses are beyond your means. Investors are not interested in covering overhead, unless they are convinced that you have already put all your “skin in the game” (not just sweat equity), and have real contributions from friends and family.

When deciding whether and how an investor can help you, remember that finding outside investors requires a huge amount of time and work, perhaps impacting your rollout more than working with alternate approaches and slower growth. Perhaps you really need an advisor rather than an investor.

Even under the best of circumstances, working with an investor requires give and take. More likely, you now have a new boss – which may be counter to why you chose the entrepreneur route in the first place. Maybe that’s why bootstrapped startups are the norm, rather than externally funded ones. You alone get to make the big decisions on your big vision.

Marty Zwilling

7 Keys to Positioning Your Competitors to Investors

Every entrepreneur should spend plenty of time thinking about competitors, and how they relate to your business, but you need to be very careful what you say out loud about them to your team, your investors, and your customers. What you say speaks volumes about how you think about your startup, how smart you are, and your personal integrity.

I’ve spent hours talking to startup founders, and heard a thousand startup pitches, and I always listen carefully to what is said (or not said) about competitors. Everyone has a view on competitors, so you will likely get some off-the-cuff questions on this subject as well. Here are some common pitfalls or traps to avoid:

1. Above all, don’t say you have no competitors. This statement is a huge red flag to investors, who will take it to mean that there is no market for your offering, or you haven’t bothered to look. Both conclusions will kill your credibility, and usually preclude any further funding interest.

2. Avoid degrading or demeaning your competitors. Talking about competitors is your opportunity to make positive statements about the advantages of your own product. For example, “Compared to product x, my solution will get the job done in half the time, and at half the price.” Don’t say “Product x is more expensive and hard to use.”

3. First-mover advantage is a double-edged sword. Being first to offer something is often used to cover the fact that you have no patent or intellectual property. Investors will conclude that you are highly vulnerable to the deep pockets of big players who will wake up and kill you when you show traction. The best defense is a dynamic product line.

4. Don’t be caught not recognizing a potential competitor. Do your homework ahead of time on all potential competitors you can find on the Internet, from industry magazines, advisors, and team members. Great momentum in a meeting can be killed instantly by apparent ignorance or bias against a proposed competitor.

5. Don’t forget to mention alternatives and substitutes. Make it clear that you have considered competition in the broadest sense, including indirect competitors and alternative solutions available. You won’t get any credibility for refusing to admit that airplanes are competition for trains. Always present a balanced and honest picture.

6. Watch the timeframes implied in comparisons. Making a big point that your competitor is missing a big feature today that you will have when you come out next year is not very convincing and doesn’t make you look smart. If it’s important, he’s probably working on it also, and has a big head start on you.

7. Competitors exist now and in the future. You can make real credibility points on this one by suggesting future competitor directions, and what you are doing to head-off these initiatives and advantages. Remember that the world is a small one these days, and international considerations, as well as technologies, are important.

Remember that investors invest in people first. They are looking for you to be smart, but present a balanced, realistic, and honest view of competitors. Trying to finesse investors who have real questions about competitors is not the way to close an investment deal, or even convince a customer to buy from you.

In the real world, you will never have perfect answers to questions about competition, because you can’t know what they might do before or concurrently with your delivery. Your challenge is convincing investors and customers that the risk of following you is less than the risk of relying on competitors. That’s a lot easier if you believe it yourself, and present a balanced view with integrity and conviction.

Marty Zwilling

Great Startup Teams Foster a Culture of Likability

You don’t have to be likeable to everyone to be a great entrepreneur, just to the people who count. Of course, we can all point to apparent exceptions, like Ted Turner or Larry Ellison, who are sometimes seen as lions, downright predators, or even jerks. Yet I’m told that even these guys are considered quite likable by an intimate group of business and personal associates.

So likability is an elusive quality. It doesn’t mean always being perky and bright and constantly being happy. What makes each of us likable is distinct to us, and to some degree it’s in the mind of the beholder. But the basic drivers of likability are the same for most of us, and Michelle Tillis Lederman, in her book “The 11 Laws of Likability” has summarized these nicely:

1. Be your authentic self. Don’t try to be someone that you are not. Other people quickly see through this façade, and lose respect. Find the good in difficult situations or personalities. Work on improving the real you, rather than building a better façade.

2. You have to like yourself first. Don’t expect others to like you if you have a bad self-image. Practice positive self-talk using genuine accomplishments to pave the way for authentic productivity and success. Absorb the new approach and make it real.

3. Perception is reality. How you perceive others is your reality about them, and the same is true for them of you. It is far easier to make a good first impression than to change a bad one. Likability is leaving people with positive perceptions.

4. Exude energy in all your actions. What you give off is what you get back, and your own output can energize other people or deflate them. Channel your authentic energy to be genuine and likable, even when faced with difficulties and challenges.

5. Curiosity never killed a conversation. Showing genuine curiosity about a person’s job, life, interests, opinions, or needs is the best way to start a conversation, keep it going, and make you likable. Check for matching needs for help rather than demanding help.

6. Practice listening to understand. If you want others to understand and like you, you have to understand them by truly listening to what they are communicating. Don’t forget that good listening is done with you eyes and other body language, as well as your ears.

7. Show people how you are like them. Look for common interests and backgrounds, shared experiences and beliefs, to find similarities that can help you build connections with other people. People like people who are like them.

8. Create positive mood memories for other people. People are more apt to remember how you made them feel than what you said. It’s hard to be likeable when you intimidate people, practice insensitivity, or otherwise make them feel uncomfortable.

9. Stay in touch and remember connections. Showing genuine curiosity about a person’s job, life, interests, opinions, or needs is the best way to start a conversation, keep it going, and make you likable. Stay in someone’s mind to make them comfortable.

10. Give something without expecting a return. There are countless ways to give freely to others, including making introductions, sharing resources, doing favors, and giving advice. What goes around comes around.

11. Have patience, don’t expect benefits from every contact. Likeable people don’t demand value from every interaction. Stay open to the possibility that results may take time, and come in ways not obvious today.

An old Harvard Business Review article, “Competent Jerks, Lovable Fools, and the Formation of Social Networks,” looks at how people choose those they work with. It shows that people choose who they partner with at the office according to two criteria. One is job competence (Does Joe know what he’s doing?). The other is likability (Is Joe enjoyable to work with?).

In many cases, likability actually trumps competence. So unless you already have the money and position of one of the lions mentioned earlier, it’s worth your time to focus on both likability and relevant business skills, as well as relationships. Likeability is everyone’s business, and people do business with people they like. How high would you score on the likability scale?

Marty Zwilling