Entrepreneurs Need ‘Go-To’ People, and Be the Model

Go-to people get things done. As an entrepreneur, you need these people, and you need to be one, if you expect your startup to be successful. That may be easier said than done, since resumes do not tell the story, and without real nurturing, the best people won’t stay around long.

To highlight how rare this breed is, Jeffrey Gandz of the Richard Ivey School of Business relates a quote from a new CEO in a large company, "I have more than 1000 people in my head office organization, 900 can tell me something’s gone wrong, 90 can tell me what’s gone wrong, 9 can tell me why it went wrong, and one can actually fix it!"

Finding and nurturing that one is the challenge for every company and every startup. I like his summary of how go-to people are different from other people, not necessarily because they have unique skills, but because of the ways these skills are configured and integrated with other leadership characteristics:

• Know how business works and how to work your business. They have what we might call “street smarts” as well as real intelligence. They have a special ability to help people get results, clear away road blocks, and resolve impasses that are frustrating people. Then they use those skills to build support for required actions.

• Politically astute without being politicians. Unlike many political operatives these people are seen as dedicated to the goals of the business, rather than feathering their own nests. This leaves them with the reputation for being politically astute rather than being labeled with the stigma of being a politician.

• Know how to use power when it’s needed but seldom use it. They recognize that people are persuaded by those that these people, in turn, can persuade. So they open themselves up to recommendations from those they are trying to persuade. They recognize that people want recognition, so they reward people who get-with-the-program with attentions for doing so.

• Consummate negotiators but getting it done is non-negotiable. They are adept at seeing situations from others’ perspectives, separating people from principles, building bridges between positions, and bringing people to their senses. But they are laser-like in their focus on project completion, and never sacrifice deadlines for compliance.

• Networks of reciprocation rather than deals. However, these exchanges of favors and reciprocity are not conditional negotiation elements, but usually based on having done someone a favor without requiring anything in return. The favor is often motivated not by future consideration but by a genuine desire to help someone else.

• Think out of the box while acting inside the box. Go-to people are creative people who are constantly looking for better ways to get things done. Barriers are challenges, obstacles are opportunities for innovation, the words “can’t do” register as “how can we do.” They use the culture to change the culture, and use channels effectively.

• Analytical and intuitive, aggressive and patient, confident and humble, deliberate and decisive. These sometimes paradoxical characteristics of highly effective leaders are present in abundance in go-to’s. They escalate what needs to be handled at a higher level and don’t feel that they have to resolve everything themselves.

While many resumes portray people as leaders, resumes are heavily weighted toward “initiators”, those who start things and develop new ways of doing things. Few talk about completions – driving things that they have initiated through to conclusion. You need both, and don’t confuse the two.

If you are not that natural leader, remember that becoming the go-to person in your organization is very powerful in raising positive perceptions of your value. It's all about who you know, what you know, what you do, and how you can help. Best of all, it’s fun to get things done.

Marty Zwilling

Don’t Let Early Adopters Distract Your Market Focus

For most new high-tech products, the first customers are always “early adopters.” The conventional wisdom is that early adopters are the ideal target for new products, to get business rolling. I see two pitfalls with any concerted focus on early adopters; first, the size of this group may not be as large as you think, and secondly, their feedback may lead you directly away from your real target market of mainstream customers.

The term “early adopters” relates to the people who are eager to try almost any new technology products, and originates from Everett M. Rogers' Diffusion of Innovations book. Early adopters are usually no more than 10%-15% of the ultimate market potential, and marketing to them may be necessary, but not sufficient in marketing to the mainstream. Witness the market struggle for 3DTV acceptance over the past couple of years.

The good news is these people will readily provide candid feedback to help you refine future product releases, and push towards new features, increased control, and interoperability. The bad news is that they hardly ever push towards simplicity and increased usability needed by the masses.

The result can easily be the classic death spiral, driven by a small but vocal portion of your market, for more and more features, when you can least afford it in time or money. Equally bad, implementation of input from a few early adopters can actually prevent your products from being adopted by the majority, as follows:

• Minimizing value of usability features. Features you designed for average users, like wizards for configuration, and simple buttons to eliminate complex processes, will get no feedback, or removal recommendations. Early adopters like to see tricky and elegant details, rather than general usability.

• Increased control and flexibility. Product suggestions by early adopters often ask for increased user control over details of the technology. However, each increase in control that you hand over to the users also increases user interface complexity, and the opportunity for pitfalls for the average user.

• Emphasis on engineering robustness. Early adopters love the technology, sometimes to a fault. Technical issues, like execution speed, file size, and memory usage are typical examples that always need further optimization. At some point it becomes compulsive engineering, rather than engineering to increase value for the average user.

• Higher product price. They want new features automating complicated but obscure tasks. These features will likely be used by only a tiny fraction of the entire user base, but increase complexity for everyone. Early adopters are normally less price sensitive, so may mislead you in finalizing your pricing model.

The dilemma that we all face is that the most valuable customers might be the least vocal (silent majority). The users who scream the loudest are usually a minority segment. The challenge of every business is to proactively seek out a cross section of core users and ask them for feedback, rather than responding to random noise.

I’m certainly not suggesting that you ignore early adopters. Simply recognize them as a specific and important small market segment, and treat them with respect. Early adopters have money, and if they like your product, they’re generally very vocal about it and provide invaluable word-of-mouth press. You need their evangelism and passion to get enough momentum to start attracting mainstream consumers.

So don’t be lulled into complacency by early adopters as your first customers. Temper your feedback assessments, product changes, and marketing strategy to the mainstream market. Ten percent of your projected market won’t make either you or your investors very happy.

Marty Zwilling

Women Bring Their Own Style to the Startup World

Do you think men make better entrepreneurs than women, and why? I did some research on this subject a while back, and I found some interesting perspectives. Everyone seems to agree that women think differently than men, and run their businesses differently, but there is a lot less agreement on which styles are better or worse.

First of all, it is evident that there are far fewer women entrepreneurs today than men. According to a recent article in the Huffington Post, last year marked a new high for female CEOs in Fortune 500 companies, but the percentage big companies run by women is still less than 4%. In startups and small companies, the numbers are much better, but still estimated to be below 25%.

Yet, according to a study by the Center for Women’s Business Research, the number of female-run firms is growing twice as fast as all the rest, so women are catching up. The latest big-company addition was Ginni Rometty, who was promoted into both top titles at IBM in 2012.

Back to how entrepreneurial styles differ between the sexes, here are some observations I found from various sources on styles, not necessarily better or worse:

1. Leadership style. There are clear differences between males and females in their management and leadership styles, probably reflecting their genetics. Distinguishing traits of male leaders are autonomy, independence, and competition, while those of women are relations, interdependence, and cooperation. Both have their advantages.

2. Operational style. For operational purposes, men move quicker, are more analytical, more focused and concentrate more on the short term and on rules. In contrast, women generally gather more data, consider their context, think more long-term, and rely also on their intuitive and sympathizing characteristics. No comments on which is better.

3. Organizational style. Status and rank are important for men, whereas women are more comfortable working in a flat hierarchy. The structure of preferred by males resembles a hierarchy or pyramid, where authority stems from one’s position within the hierarchy, and emphasis is more upon goals and objectives than on the process.

4. Business relationship style. For men, business relationships are more competitive, and power is enhanced through control of information, which may be hoarded rather than shared. Women have larger social networks, for advice and resources, and relationships with other business women are more nurturing than competitive.

5. Emotional style. The biggest surprise for me was the finding that men seek larger "emotional" networks - the complex of associations that provide warmth, praise, and encouragement. Also men tend to show more emotion in business than women do, as a form of domination and intimidation.

6. Investment style. Most of the venture capitalists and angel investors I know are male. Women seem to network for the sake of relationships, and they will invest in support of these relationships, but have less interest in business opportunity investments. Men network for the sake of utility.

7. Motivational style. According to the National Center for Women & Information Technology, women’s self-image seldom includes entrepreneurship. Women are more likely to be motivated to pursue an startup career to balance family and career, while men are more likely to be motivated by wealth accumulation and career advancement.

We know, of course, that in the real world, it all comes down to the individual, not how many X chromosomes that he or she has. As I contemplate the differences in style listed above, it seems that in fact they are complementary – yin and yang – like masculine and feminine, rather than right or wrong. Societal trends actually seem to be favoring the women these days.

The implication is that entrepreneurs of either sex would do well to find a business partner on the other side, capitalizing on the other dimension, rather than engage in a battle of the sexes. Wars are no fun for either side.

Marty Zwilling

10 Sage Quotes From $100M Entrepreneur Winners

Entrepreneurs are a notoriously stubborn (some say confident) group of people, so I see many of them making the same mistakes that predecessors have made. Thus I’m convinced that it’s useful for all of you to step back from time to time, and listen to some sage advice from people who have been there and enjoyed success.

Recently, as I was perusing a book by Robert Jordan, titled “How They Did It: Billion Dollar Insights” I saw some wisdom and inspiration that made sense. All the quotes come from entrepreneurs who have built and sold at least one $100 million company. Of course, you can always argue that each was just in the right place at the right time, or was lucky, or had a rich uncle to get them started, but it would be smarter to listen to the messages:

1. You need enough capital and a little more. “Everything isn’t going to go well in the first couple of years, and you need to get to cash flow positive. You don’t want to be going back for a second round when everything isn’t going well” (J William DeVille, Health Personnel Options).

2. You need to see the glass half full, rather than half empty. “You have to have the perspective and the personality that, when these bumps, mountains or doglegs happen, you don’t focus on everything that’s wrong. You continue to be optimistic and to move forward to solve the problems” (Bonnie Baskin, ViroMed Laboratories, AppTec).

3. Surround yourself with great folks, and it gets a lot easier. “You’re very hesitant to fire your first employees, but a lot of times the company outgrows their abilities or takes on a different direction. I tell everyone that the only constant around here is change” (David Becker, Virtual Financial Services).

4. You can be a leader without being the best at everything. “Like in basketball – you don’t need to be the best outside shooter or the big guy. You can play a role. Working with others, giving people credit. Give and take. Knowing how to make hard decisions” (Jeff Aronin, Ovation Pharmaceuticals).

5. Execution is everything. “Even if you start a business with the wrong idea or too many competitors, you can out-execute all the other ideas in the right market. What I mean by execution is the ability to do what you’re setting out to do and then being able to zig when the market zags” (Dick Costolo, FeedBurner).

6. You learn more from bad times than from good. “You learn more from complaints than from compliments. I always discount compliments I get from customers because I think a lot of times they’re just being nice. The complaints – those are real” (Jim Dolan, The Dolan Company).

7. At some point, you need to let go of control. “Many founders think they need to be in control even when the company has evolved beyond them. You need to know your limitations and, if necessary, find people who are more adept at running the company and taking it to the next level” (Tony Faras, MGI Pharma).

8. You are who you hire. “If the person who hired you is smart and nice, the people that person hires will be smart and nice. If the person who does the hiring is smart and a jerk, you’re going to end up with a log of smart jerks” (Ron Galowich, First Health).

9. A business needs momentum. “You try to think ahead and be sure that whatever surprises come up, you are prepared to move ahead aggressively and positively. The last thing an entrepreneur wants when starting a business is to lose momentum” (Bill Bantz, Pathogenesis).

10. Ship early and iterate. “Get some kind of product out early so that you start getting feedback from customers. Don’t put all your eggs in one basket because you’re doomed if that launch fails. With feedback you can hone your products” (Roland Green, NimbleGen)

Robert interviewed a total of 45 successful entrepreneurs responsible for $41 billion in value, so this is just a sample of the insights he found. I certainly don’t advocate that you take all the advice you hear from these leaders, but it always pays to listen for a nugget that fits your case. Underneath every nugget, there’s likely more buried treasure hiding. Go for the gold in your company!

Marty Zwilling

How to Maximize Results in the Art of Persuasion

Being a good entrepreneur means being able to effectively convince an investor that you have a great idea, persuade partners that your approach is right, and convince potential customers that the solution is right for them. If all your ideas are intuitively obvious to everyone, you probably aren’t thinking outside the box, or don’t really have the next big thing.

The process and tactics involved in winning over others with your views have has been studied extensively by Howard Gardner, a Harvard developmental psychologist, in “Changing Minds: The Art and Science of Changing Our Own and Other People’s Minds.” It turns out that the same principles apply to changing your own mind (learning new things), as well as others.

There is no single “silver bullet” here. Leaders seeking support for their ideas shouldn’t rely on a single method of persuasion. I agree with an old Harvard Management Update, which suggests you need to tailor your approach to the audience, as well as use as many of the following pragmatic approaches as possible:

• Try often and in many ways. Many people mistakenly assume that their message is so powerful and so convincing that a single delivery should do it. Plan to deliver your message artfully several times (not all in one meeting), in different formats, including written, verbal, graphics, scenarios, and demonstrations.

• Lead from a familiar problem. Start with a familiar problem, presented in neutral terms, that your audience can relate to. Then apply your new idea, technology, or solution, to show the added value in concrete terms. Avoid abstract or academic discussions that often sound like an effort to show you are smarter than the audience.

• Leverage the power of contrast. Contrasting scenarios can also prove powerfully convincing, one with your message implemented, and one without. If you can challenge or involve the receiver in creating this contrast, it will help them move from old beliefs to your new ones.

• Tune to receiver expertise and intelligence. Your approach to right-brain (visual and intuitive) people should be different than left-brain (logical and analytical). That usually means listening first, consulting with others, and taking time to establish a relationship with an investor before you hit him with your startup idea.

• Get help from friends and experts. None of us is equally comfortable with, or skilled at all the possible approaches. Don’t hesitate to get help from a colleague on a creative demo if you are analytical, or a good writer if you need a strong business plan.

Theoretically, all these tactics can be related to Gardner’s seven levers of persuasion:

1. Rational reasoning: Logically outline the pros and cons of a decision.
2. Research: Present data and relevant cases to support the argument.
3. Resonance: Use your likeability and emotional appeal to win support for your view.
4. Representational re-description: Make your point in many different ways.
5. Resources and rewards: Use rewards or punishment as incentives.
6. Real-world events: Use events from society at large to make your point.
7. Resistances: Understand the factors that cause people to reject your view.

As a practical implementation, I find that the most persuasive leaders start their conversations by asking questions. They get to know what is important to that person, what moves them, and what level of resistance the receiver has to the new idea. The higher the level of resistance, the more time and more of these techniques will be required.

If you are an entrepreneur, or any business professional, you need to change people’s minds, including your own, on a regular basis. I’m convinced that the tactics listed here can improve your success rate, and your overall effectiveness in your job. Feel free to try to change my mind.

Marty Zwilling

Seize the Power of Diversity in Your Startup

Many entrepreneurs think that diversity on their team just makes their job harder, since startups are all about making fast decisions, and executing efficiently. Often they assume that this is only a big-company issue, having more to do with the legalities of equal opportunity, hiring minorities, and moral imperatives. In reality, diversity in a startup can be your big competitive advantage.

In a recent Deloitte Review of “Diversity as an Engine of Innovation” executives were asked about the connection between diversity and company performance, and 90 percent agreed it was critical. In a different survey of over 500 European respondents, 83% felt that diversity initiatives had a positive impact on their business. Quantification studies still show more mixed results.

While more quantification efforts are always a good thing, I believe the evidence is conclusive that there is business value for startups in using diverse teams, including different genders, age, race, and ethnic cultures. These varied personal perspectives and life experiences will allow a startup to benefit in many ways, including the following:

1. Diverse teams make better decisions. When homogenous teams make decisions, their similar ideological preferences and backgrounds tend to compound any weaknesses. Diversity brings new perspectives and range to the group dynamics, which will likely improve the accuracy of the outcome.

2. Groupthink with diversity enhances learning. By groupthink, I mean cooperation in which every member of the group holds the vision, mission and values of the group above self-interest. Teams that are homogeneous are less likely to challenge their own assumptions, less likely to listen to feedback and, therefore, less likely to learn.

3. A diverse team brings a broader perspective. This means your plans will be more creative, and your solutions to problems can occur faster. Your startup, for example, will more likely see and understand sooner the needs and wants of a larger and more diverse customer base.

4. Diversity will likely strengthen team culture. As your startup grows, you need to attract and retain a broader group of talented individuals, who share a common set of values and commitment to action. Diversity highlights the value of different perspectives on the team, and fosters innovation and creativity.

5. Diverse teams will have more diverse networks. You as the entrepreneur will thus have access to a broader pool of potential investors, customers, vendors, and expertise. Greater, diverse networks can solve greater, complex problems, and compete more effectively in a rapidly changing marketplace.

Tristan Walker, VP of Business Development at Foursquare and Silicon Valley diversity advocate, recently pointed out that, "By the year 2040, racial minorities will account for the majority of the United States population." If entrepreneurs really want to keep up with the needs of this evolving population, they need to capitalize on the diversity that comes with it.

Starbucks, led by Howard Schultz, is an example of a startup that has long actively supported a focus on diversity, and credit these efforts with their success in a very competitive industry. Diversity and inclusion continue to be a central part of Starbucks’s strategy to, in the words of the company’s vice president, global diversity, May E. Snowden, “embrace diversity as an essential component in the way we do business.”

To me, it’s clear that the startups that make decisions based on individual and team merit, rather than title, politics, or culture execute faster and learn faster than their competitors. In today’s highly competitive environment, that can be decisive.

So, whether you are making early strategic hires, or growing your advisory board, look for people who are smarter than you, and not just like you. It will help both you and your business to grow faster and live longer.

Marty Zwilling

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