Saturday, May 30, 2015

10 Modern Ways To Kickstart Your Business Website

Image via Flickr by SideWages.com
These days every new entrepreneur understands that an innovative product or service is necessary, but not sufficient, to start a business. You have to build a web presence with marketing content to get visibility above the almost 300 million other new websites created last year, and attract the customers you need. But most entrepreneurs don’t know where to start. 

Of course, there is a plethora of “experts” emerging out there, who are anxious to lead you down that path, for a large price. So I’m always on the lookout for some real experts, and some pragmatic guidance on how to attack this issue. A good start is a classic book on content marketing, “Accelerate!” by an expert and friend in this space, Arnie Kuenn, who offers guidance and examples on new and modern approaches for the rest of us:
  1. Build a blog. According to Hubspot, websites that have blogs get twice as many inbound links, 400 percent more indexed pages, and a more than 50 percent increase in traffic, compared to websites without blogs. Search engines and people love blogs these days. 

  2. Join the conversation with Community Forums. A forum is a discussion site on a relevant subject, hosted and moderated by you, which adds authority, content, and traffic to your website. The registration process to join can give you a very targeted email list. 

  3. Curation, the most efficient content. Curation is humanly aggregating, filtering, and re-posting the best-of-the-best content on the web, relative to your product or service area. This shows your knowledge and positions your company as a thought leader. 

  4. Win with engaging contests. Not a new idea, but when used creatively, can entice new prospect traffic and backlinks to your site. People these days love to submit stories, vote on other entries, and receive the recognition of even small prizes or product rewards. 

  5. Traditional publishing out, self-publishing in with eBooks. You don’t need a real book as a base for electronic books, as people now prefer something akin to a “white paper” on steroids. It’s just another way to demonstrate credibility and attract traffic. 

  6. Keep them engaged with eNewsletters. These are regular updates, usually monthly, via website and email that help with customer retention, and remind your customers that you are the expert in your industry. Supplement text here with video and audio. 

  7. Widgets and badges. A widget is a mini-app that displays or updates data either locally or on the web – to share something of value and interest. A badge is a simple graphic designed for fun, to show support, or promote certain standards online. All highlight you.

  8. Look like an expert with Interviews. Here we are talking about interviewing industry experts. By having frequent conversations with experts in your industry, you rank yourself among the top, and show you are connected. You are the company you keep.

  9. Videos, stories in motion. Simple videos, less than five minutes in length, you can do yourself and upload to YouTube for display on your website, can turn a blasé idea into a winner. Keep the atmosphere relaxed and fun, to increase traffic, and maybe even go viral. 

  10. Provide convenience through podcasts. A podcast is basically a non-streaming webcast, usually audio only, for those who want the convenience of downloading and listening via iPod or mobile phone while commuting or working out at the gym. It’s cool.
There are a lot more items of content that could be on this list. But don’t let the number overwhelm you. You don’t need to tackle them all – just pick a few that you think you can do well, and consistently. The key is new content on a regular basis to attract the attention of search engines and new customers.

Most importantly, don’t wait until you have perfect content. Start creating content today. The more you create, the more momentum you build, and better you will get.

Marty Zwilling
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Friday, May 29, 2015

Have You Explored Every Business Growth Alternative?

Image via Pixabay.com
Startups are usually so focused on selling more of their branded product or service to their own customer base (organic growth) that they don’t consider the more indirect methods (non-organic growth) of increasing revenue and market share. Non-organic growth would include OEM relationships, finding strategic partners, “coopetition,” as well as acquisitions.

The initial focus only on organic growth is usually driven a passion for the product, and by limited financial and people resources, as well as the limited experience of the executive team. Yet a creative and skilled team will often find that non-organic growth techniques can better leverage these limited resources in scaling the business. 

An example of a startup which used non-organic growth early and effectively was Microsoft. Bill Gates started producing software solutions, like his Basic Interpreter and MS DOS, but quickly focused on adding thousands of small partners for applications, and major partners like IBM, Intel, and other hardware manufacturers. Even mergers and acquisitions (M&A) came quickly.

Some people feel that organic growth is “better” because it requires real innovation and sustained effort to create long-term competitive advantage through differentiation and efficiency. They might agree that it cannot compensate for the speed and scale of growth of the non-organic approach, but has lower risks of failure.

Despite the risks, there are many advantages of non-organic growth, especially in startup environments:
  • New product or service lines. Organic growth assumes innovation in the product or service, but non-organic growth through white labeling and strategic partners may add totally new brands and services to your revenue stream.
  • Fresh customer base. Teaming with another company, or buying another company, can add new geographical locations and new customer segments to the business. These relationships need not require cash investments; often they are done with exchanges of equity or assets.
  • Economies of scale. In many cases business opportunities with competitors (coopetition) will open up a new marketing channel, and definitely give you the cost advantages of scale. Economies of scale also apply to marketing, distribution, and sales.
  • New management skills. New business relationships mean new perspectives and new executives working on the opportunity. This can be a significant competitive advantage over major competitors, and overall reduces competition in the market place.
I’m certainly not proposing that one mode should be used to the exclusion of the other. Rather, I recommend that you pursue both concurrently, per the advantages of each. For example, if you are in an industry which is fragmented or has a slowing growth rate, with too many competitors, non-organic growth may be required for survival.

Use organic growth options for things which you do best, where there is plenty of room for growth by selling your products in new geographic areas, or using new sales channels, such as through a wholesaler or website. Organic growth is typically safer because you’re using a tried-and-tested business model, and you can reinvest profits back into the business.

Certainly non-organic growth has its pitfalls. Entrepreneurs, while partnering with or acquiring a new business, must check for compatibility and strategic fit. Yet startups looking for investors need to evaluate all the growth alternatives from the very beginning. “No growth” or even slow-growth companies waiting for an Angel may have a long wait.

Marty Zwilling
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Monday, May 18, 2015

8 Ways To Maximize The Value Of Your Startup Stock

Common_Stock_1933 When an entrepreneur first incorporates his or her business, he or she may find him or herself the proud owner of 10 million shares of common stock, commonly called founder’s shares. It’s disconcerting for most to realize that these shares are initially worth nothing, and the challenge is to get that value up as quickly as possible, without losing it just as quickly to investors, lazy partners and taxation.

This is where things get technical, but the principles are really quite simple. Every entrepreneur needs to understand the following basics, to be addressed at company formation, as they engage a qualified attorney to draw up the paperwork:

  1. Allocate founder’s stock commensurate with commitment. Even though initial stock has no value or market, it is extremely valuable in dividing entity ownership between multiple co-founders, commensurate with their investment, contribution and role. Startup owners need to assume a three to five year wait for a liquidity event, such as acquisition or going public, before they can cash out. At that time the original split makes all the difference.

  2. Make sure the government waits for a stock sale to collect taxes. In the U.S., every entrepreneur should incorporate early and file an 83(b) election with the IRS within 30 days of founding the company. Failing to file, or waiting to incorporate until a first investor arrives, is a common mistake, and will lead to a nasty tax bill when you can least afford it.

  3. Spread stock issuance over an earning period. This is the purpose of a vesting schedule, which issues allocated stock over time. Typically, vesting in startups occurs monthly over four years, starting with the first 25 percent of shares vesting only after an owner has remained active for at least 12 months (one year cliff). Key founder vesting should have no cliff.

  4. Retain the right to reclaim stock from anyone leaving the startup. To retain control, the original founder must reserve the right of first refusal to buy shares back at cost from a partner who decides to leave early or stop working. Otherwise, people with no ongoing effort (“free riders”) will own the value growth that you are adding after their departure.

  5. Minimize your own loss of ownership as major investors contribute. This is called stock dilution control. While new equity owners always have to get it from someone, actual re-allocation of existing shares should be based on a formula to maximize the value of your remaining founder shares.

  6. Accelerate your own vesting if pushed out or the startup is acquired. Don’t lose the value of stock not yet vested if your startup is bought out before the normal vesting schedule comes to a close. If new investors want to replace you as the founder early, make sure this action triggers an accelerated vesting clause as well.

  7. Facilitate an upgrade of founder’s common to founder’s preferred. Investors typically demand preferred stock to give them more control and first payouts, but these advantages can be at least partially offset (up to 20 percent) if you plan ahead. The acceptance of this option is now common, even though introduced only a few years ago.

  8. Limit board seats and manage member selection criteria. More board members is usually not better for the startup. Target no more than five members, with at least two being founders. This allows the entrepreneur more influence in controlling dilution of his or her shares, investment terms and acquisition decisions.

Every entrepreneur has heard the stories of a startup selling for millions of dollars or going public with the founder being squeezed out of all the gains. This situation only can be prevented by incorporating early, avoiding negative tax situations and managing your shares like gold. Founder’s shares are just paper when you get them, and it’s up to you to turn them into a gold mine.

Marty Zwilling

*** First published on Entrepreneur.com on 5/8/2015 ***

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Monday, May 11, 2015

How To Pick A Startup Model To Match Your Motivation

entrepreneur-motivation Being an entrepreneur seems to be one of the most popular lifestyle aspirations these days. According to most definitions, anyone who starts a business is an entrepreneur, but most people don’t realize there are many startup types out there, and picking the wrong one can be just as disastrous as being stuck in a cubicle at work, or doing things with no interest and no skills.

In my view, this mismatch of motivation to your business model is the primary reason that 70 percent or more of startups ultimately fail, and an even higher percentage of employees are dissatisfied at work. Thus it behooves every entrepreneur to pick the startup model that best matches their real motivation. Here are six considerations to get you started on the right startup:

  1. Invented a solution to a painful existing problem. You have proven that you can create an innovative product, but creating a business is a whole new challenge. The old adage of “if we build it, they will come” doesn’t work anymore. Every business needs marketing, distribution, a positive revenue model and intellectual property to survive. You won’t be a successful and happy entrepreneur if you aren’t motivated to build a business.

  2. Aspire to be in control of your own domain. There are many business types that don’t assume any new invention or service, such as franchising, multi-level marketing (MLM) or freelancing. These do require business management and execution skills, as well as the discipline to manage yourself. Just don’t look for an investor to fund your efforts here, since investors will likely be tougher bosses than corporate managers.

  3. Looking for a path to dramatically increase your income. This is a tough one, since most of the overnight startup successes I know took six years or more. Franchises and consulting businesses have an earlier and higher success rate, but typically have a lower return. With new products and services, you can hit the jackpot, but many struggle or fail.

  4. Trying to fulfill family or peer expectations. Don’t try to be an entrepreneur just to prove something to a loved one, friend or sibling. There are no business types that work well here, except maybe an existing family business that is already successful. If you must proceed, at least pick something you love, or a social cause to benefit society.

  5. Seeking a new career challenge to follow an existing success. If you have a comfortable position from a previous success, and are not looking to retire, a great business is to share your expertise and experience through consulting. Another great learning opportunity and win-win deal is to co-founder a new high-tech startup team.

  6. Fulfill your legacy and responsibility to society. Environmental startups and non-profit businesses are just as challenging as the next disruptive technology startup, and just as likely to change the world. Leaving a personal legacy is a great motivator to switch to entrepreneurial work, if you have that passion and determination.

No matter which of the entrepreneur business models you choose, don’t expect the work to be easier than a corporate job. In fact, most successful entrepreneurs would argue just the opposite. Success in any entrepreneur role requires a serious commitment, determination and learning from setbacks. Switching business models is not usually a shortcut to success and happiness.

I often recommend to aspiring entrepreneurs that they first take a job with another startup in the same realm as the one they envision to get some practical insight into the challenges, make contacts and learn more about their own motivations. Then take the big step of starting your own business, with fewer surprises, some good connections and likely more accumulated savings.

Overall, it is important to remember that happiness breeds success more often than success breeds happiness. Every aspiring entrepreneur should play to their strengths and interests, rather than listen to all the well-meaning advice you will hear from friends and experts. The exciting part about being an entrepreneur is that you can tailor the role to match your real motivations.

Marty Zwilling

*** First published on Entrepreneur.com on 5/1/2015 ***

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