Wednesday, December 30, 2015

10 Leadership Traits That Can Damage Your Business

Tony Hayward BP CEODoes it really take a few flaws to make a great entrepreneur, or are the rest of us just confused about what a perfect business person is all about? In the past I’ve written about the positive attributes of great entrepreneurs, so this time I thought I would focus on the negatives that I see often, and I challenge you to find someone that has all the positives and none of the negatives.

We’ve all heard the old adage that “nice guys finish last,” so I would quickly concede that positive and negative are relative terms, depending on the context. For example, if a customer is being particularly obnoxious or demanding, would a great entrepreneur respectfully show him the door, or accommodate his demands, with the positive goal of satisfying every customer?

The business leader with the positive traits to calmly and patiently handle tough customers, vendors, and personnel situations, balancing all the issues, I would evaluate as a great one. Yet here are a few other traits that I see in great business leaders, which don’t seem so positive for the entrepreneur, his team, customers, or investors:
  1. Multitasking to the extent of thrashing. Entrepreneurs often have a thousand things going in their mind, and switch so rapidly from one to the other that they leave many people confused, including themselves. The result is that important tasks get short shrift, and relationships suffer. Don’t let multitasking supersede focus and real listening.

  2. Demands perfection from all. Entrepreneurs who are perfectionists are never satisfied with their own work, as well as the work of others. This can cause delays and costs in the business, as well as friction and frustration in relationships with team members, partners, and customers. Steve Jobs survived this imperfection, or it made Apple famous.

  3. Strong convictions bordering on obstinate. The best leaders have strong convictions, but listen to others, and are willing to compromise when required, to move the ball forward. In business, if you refuse to compromise to meets the needs of customers, your competitors will replace you. Business is no place for stubbornness.

  4. Not a team player. Most entrepreneurs start their business because they perceive a need in the market not seen by others, and often they just don’t enjoy working with others. In time, however, every business requires a team, and giving up control becomes a constant struggle. Some entrepreneurs simply jump ship and start again.

  5. Over-confident to the point of being egotistical. Letting your ego drive decisions is not the same as confidence based on knowledge and trust. While entrepreneurs need a healthy ego for body armor, it can quickly become the negative trait of arrogance if not tempered. Many put Ted Turner and Larry Ellison in this category.

  6. Procrastination on certain challenges. Sometimes I see very smart entrepreneurs who struggle with tough issues, like hiring and firing people. They may ignore these, or hand them off to a capable business partner. The positive traits of learning, management disciplines, and timely decisions have to step forward consistently to grow a business.

  7. Paranoid reaching delusional proportions. The good trait of being alert and cautious when approaching new people and new partners can easily morph into paranoia, where the entrepreneur trusts no one, and thinks all deals are a potential plot. The best entrepreneurs believe they can find win-win relationships with partners and investors.

  8. Work-life balance and workaholic tendencies. Most entrepreneurs will admit to being a workaholic at some stage of their startup. Ultimately this dedication will be seen as a negative trait by partners, family members, and team members, and can limit your business growth. Migrate to the positive traits of delegation and organization.

  9. Often emotional and temperamental. Passion and sensitivity to people are key traits in every good entrepreneur, but in some cases, these can seem to escalate to mood changes and emotional outbursts for no reason. At this point the leader may make less rational decisions, and loses the loyalty and trust of associates and customers.

  10. Looks at the world through colored lenses. Successful entrepreneurs can easily lose sight of the real business world, once the perks of power and influence set in. Many say this happened to Tony Hayward, BP CEO, after the Gulf oil spill, and AIG executives before the Depression a few years ago. The time to worry is when you start seeing humility as a character flaw, rather than a positive trait.
Every successful business leader can probably relate to these not-so-positive traits, and in many cases, will attest that without one or more of them, their business would likely have failed. The question is whether that makes them good traits, which should be learned and nurtured by every young entrepreneur who is striving to be great. I think not. There has to be a better way.

Marty Zwilling

*** Published on IvyExec.com on 11/27/2015 ***

Monday, December 28, 2015

The Only Thing Not to Fear Is Success Itself

business-fear-successCan you imagine an entrepreneur who is actually afraid of success? None will ever admit it openly, but I’m a strong believer that actions or lack of action speaks louder than words. In my years of advising startups, I’ve seen too many cases of seemingly irrational actions, or just freezing with that “deer in the headlights” look when it’s time to make a critical move.

I see it in the technologists who never get around to shipping their product, nominally because it isn’t finished yet. I see it in the business person who has plenty of funding, but won’t spend a dime on marketing to get the word out, just to conserve resources. After years of hard work, they always have rational excuses but really no one to blame but their own internal fears of success.

So, if your startup seems stuck in a rut these days, maybe it’s time to take a hard look at these common internal challenges, to see if you are actually the real limit to your success in business than the faltering economy or tough competitors:
  1. You need to be in control of every detail. Control freaks find it hard to survive as entrepreneurs, primarily because none of us have the time or skills to do everything that needs to be done in a business. Don’t be afraid to ask for help from advisors and to hire help (do what needs to be done) rather than just helpers (do what you tell them).

  2. You just want to be treated as another member of the team. Every successful business needs someone in charge -- the buck stops here, and hard decisions have to be made. Some entrepreneurs fear being seen as the boss, so they try to make every move a team decision often resulting in no decision or analysis paralysis. It’s time to be the leader.

  3. You don’t want to give up your current lifestyle. Some entrepreneurs unconsciously fear that the focus and dedication required for success will change their lifestyle to one they don’t enjoy or their friends won’t appreciate. In fact, one of the many challenges of a new business is to balance personal and family life and continue outside activities. Face it.

  4. You're afraid to ask for and spend other people’s money. It takes money to make money. Real startup growth usually requires an initial infusion of cash to kick-start marketing, hire staff and build inventory. Soliciting and managing outside funds is a fear that every entrepreneur has to overcome for success. The challenge is not to let it get too easy.

  5. You're unable to take enough risk due to fear of failure. There are no certainties in business, so taking a risk is required, and one or more failures is about average. Neither is life-threatening, and true friends and family will not desert you after a few setbacks. Successful entrepreneurs never give up and wear their failures as a badge of courage.

  6. You can’t possibly be smart enough to succeed in business. Maybe your parents were not supportive, or you struggled in school, so your self-confidence has never risen above a certain point. These fears can be overcome, by setting small milestones early and often and working upward. Business success requires street smarts, not book smarts.

  7. You hate stepping out of your comfort zone. Even experienced entrepreneurs often keep coming back to the same formulas and tools, which worked at some level and at some point in time. The challenge is that the business world keeps changing, and future success requires new creativity and innovation. Force yourself to step outside the box.
Successful entrepreneurs almost always start with a vision and a higher level purpose than just making money. It helps to communicate this higher purpose, to motivate you and overcome the fear of the unknown. Success does not require that you be fearless, but only that you be determined to transform fears into positive learning actions rather than negative roadblocks.

The ultimate fear to overcome is the fear of success per se. This is the most debilitating, since it usually comes from a deep-seated desire to conform and blend in. It can cause you to lose faith in your abilities and give up your vision at the slightest setback. Keep your vision and purpose at the forefront to motivate you and allow you to step beyond all your fears to the entrepreneurial success you deserve.

Marty Zwilling

*** First published on Entrepreneur.com on 12/18/2015 ***

Saturday, December 26, 2015

6 Keys To Make Sure Your Product Fits Today's World

BMW_Hydrogen_7_EngineGreat technology leads to innovative solutions that are possible, but not necessarily great businesses. Rube Goldberg illustrated this principle many years ago in cartoons, but I still find inventors that are creating solutions today looking for a problem. In addition, every solution has to fit into the current political, cultural and economic environment to make it a viable business.

For example, hydrogen-fueled engines were invented over a century ago, with a continuing promise of breathing air and exhaling pure water vapor and having over 200 companies active in the hydrogen sector today. Yet, due largely to non-technology business considerations, including pricing, safety concerns and support infrastructure, there are none that most people can name.

Every entrepreneur needs to keep a priority focus on these big-picture business issues, well before he commits his resources and his future to a technology that he loves. Here are some specifics that I recommend as a startup advisor for maintaining a properly balanced perspective.
  1. Keep up on business issues as diligently as on technology issues. Most technologists pride themselves on their link to relevant technology developments, but very few apply the same discipline to business and big-picture changes. Good entrepreneurs know they have to be experts in business as well as technology.

  2. Regularly communicate with major business leaders in your domain. Business leaders are the ones who best understand the balance that must be achieved between a technology and business success. Effective communication is not a debate, but active listening and an exchange of perspectives in a personal and informal environment.

  3. Develop written business plans as detailed as product plans. Good technologists produce written product specifications, to help them personally be confident that all the technical requirements are covered. Yet their business plans rarely get more than a page or two written. Defining a good business is as complex as defining a good solution.

  4. Participate in business leadership groups outside your technology. Effective personal networking involves reaching outside your level of expertise, and interacting with people who can balance your perspective. Activities that broaden your focus to societal, environmental and economic issues will help make you a winner in business.

  5. Find a business advisor with credibility to challenge your assumptions. Sometimes it takes some humility to even ask for input, and even more to really listen to negative feedback. Most successful entrepreneurs, including Bill Gates and Mark Zuckerberg, maintain mentor relationships with key advisors that they highly respect.

  6. Focus on advancing return on investment, rather than state of the art. By prioritizing customer need and value first, you will more likely achieve the satisfaction of seeing your paradigm shift become reality. Technology opportunities require effort and money, so they should be driven by value to customers, rather than the intellectual challenge.
Finally, remember that investors fund business people before technology. They look for expertise and experience in building a business as a higher value than expertise in building a solution. An even more fundable alternative is a pair of founders, one with business credibility and the other with the relevant technology expertise. It’s a clear example of how one plus one can equal three.

Successful entrepreneurs must understand and fit into the world today, and it’s getting more complex every day. In today’s world, social and environmental values often are more important success drivers than technology. The most important technology in business may be the business intelligence and big-data tools to curate the real needs in every business segment.

In fact, most customers no longer care about and many actively fear and avoid new technology. Thus technology is best hidden under better user interfaces, and simple yet powerful solutions to their problems. Can you imagine Facebook and the iPhone being sold as paradigm shifts in technology? Yet both are new technologies that have garnered huge business opportunities.

Marty Zwilling

*** First published on Entrepreneur.com on 12/16/2015 ***

Monday, December 21, 2015

Are You 'Intelligent' Enough to Be an Entrepreneur?

Image via Flickr by tinto
Many people feel that they just aren’t smart enough to be an entrepreneur, yet there seems to be no convincing evidence that a high IQ is a prerequisite for this lifestyle. We all know of successful businesses started by first-time entrepreneurs who dropped out of school, and according to many sources, “street smarts” (experience) tends to trump “book smarts” (intelligence) every time.

Another perspective is that there are in fact multiple types of intelligence, and we all have strengths and weaknesses along all of these scales. It does appear that most successful entrepreneurs are those with the broadest range of interests, skills and experiences (street smarts), while a maximum depth in any given discipline is not so important.

Here are basic definitions for the eight most commonly recognized intelligences that cover the potential of most humans, prioritized by my view of applicability to the entrepreneurial role:
  1. Word-smarts (linguistic intelligence). People with a high linguistic intelligence display a high facility for word usage and languages. They are typically good at communicating ideas, reading, writing and telling stories. Good entrepreneurs need these skills to lead a team, sell ideas to customers and investors and write business plans.

  2. People-smarts (interpersonal intelligence). These attributes are the embodiment of social skills. Entrepreneurs with high social skills interact more effectively with all their constituents. They are able to sense the feelings, motivations and temperaments of others, to enlist their support and negotiate effectively. They love working with people.

  3. Self-smarts (intra-personal intelligence). Intra-personal intelligence is the capacity to understand your own strengths, weaknesses and motivations, and to capitalize on these insights in planning and strategy. Good entrepreneurs must be able to surround themselves with advisors and partners who complement their skills to find satisfaction and happiness.

  4. Number-smarts (logical-reasoning intelligence). Logical-mathematical intelligence is the ability to calculate, quantify and think logically. Entrepreneurs use strengths in this area to balance their passion for a specific solution and to develop the specific steps and financial resources required for building, rolling out and scaling the business to success.

  5. Nature-smarts (naturalist intelligence). This sort of environmental and cultural insight is deeply rooted in a sensitive, ethical and holistic understanding of the world and its complexities. I believe that good entrepreneurs use this to see new markets first, predict world trends and devise effective marketing campaigns and demographics for focus.

  6. Picture-smarts (spatial intelligence). Spatial intelligence is the ability to think in three dimensions and the ability to visualize with the mind's eye. Core capacities include mental imagery, spatial reasoning and an active imagination. It’s easy to see how this is important for entrepreneurs in marketing, solution design and product branding.

  7. Body-smarts (kinesthetic intelligence). This intelligence involves a sense of timing and the perfection of skills through mind-body coordination. Business entrepreneurs who are also good at invention and building innovative new products are especially strong in this area. Strengths here also lead to leadership presence and public-speaking prowess.

  8. Music-smarts (musical intelligence). Musical intelligence is the capacity to discern pitch, rhythm, timbre and tone. In addition to being key to any business directly or indirectly related to music, this skill help entrepreneurs to be better listeners, orchestrate events and develop marketing programs. Music-smart people also tend to be logical.

In addition to looking at intelligence, every aspiring entrepreneur needs to look at mindset. The mindset that works best is one that sees challenges as exciting rather than threatening, setbacks as learning opportunities and a conviction that effort and perseverance will overcome any obstacle.

If you have that mindset and even a few strengths among the multiple intelligences described above, don’t let anyone, including yourself, tell you that you aren’t smart enough to be an entrepreneur.

Marty Zwilling

*** First published on Entrepreneur.com on 12/11/2015 ***

Saturday, December 19, 2015

6 Questions To Validate A Digital Marketing Message

Image via Flickr by socialautomotive
Most technical entrepreneurs cringe when they finally realize that marketing is still king, despite the power of technology, and they are up against competitors who have a hundred times their spending power. Luckily, the digital revolution has been a great equalizer in the marketing world, if used effectively to target the audience, engage the customer, and measure results.

Digital marketing is simply the move to the digital tools and technologies that most people depend on every day, including smartphones, search engines, tablets, video on demand, and the social media channels like Facebook, LinkedIn, Twitter, and YouTube. The cost of entry to market on these is low, and marketing leverage has very little to do with the size of your budget.

The best strategy and tactics to accomplish this digital marketing leverage are detailed in a recent book, “Taking Down Goliath,” by Kevin M. Ryan and Rob “Spider” Graham. These industry veterans have been teaching smaller companies how to compete with digital marketing for many years, and have a wealth of case studies to show it really works.

The first step is to create the perfect online marketing message. This message is defined as the knowledge or information that will be retained by customers after they are exposed to your company. The authors reiterate what I often say to business to business (B2B) entrepreneurs, it’s all about selling solutions (not technology) to real customers who have real needs and problems they want solved:
  1. How does this solution solve an existing problem? Every business faces challenges that affect their sales efforts, manufacturing efforts, human resources, and other things that keep them viable and profitable. Not only must the solution benefit the company as a whole, but there can be emotional benefits as well for employees who feel the pain.

  2. How does this solution provide a competitive advantage? Solutions that can turn a threat into an opportunity are especially enticing. In a world where the common scenario is “eat or be eaten,” being able to help companies to be better predators and less likely to be prey will be compelling.

  3. How does this solution make the customer a visionary/market leader? Part of the competitive advantage in the marketplace is being perceived by that market as a leader in some way. Every company is striving to find an identity that highlights its unique selling proposition, to stand out from the crowd as a visionary.

  4. How does this solution enable a significant value exchange? Smart companies are always looking for a return on investment. If they spend time, money, or other resources on a potential solution, then that solution should pay for itself. That’s a value exchange, as are solutions that empower employees to make better use of existing resources.

  5. How does this solution represent an exclusive opportunity? In the business world, exclusivity isn’t just a social ego boost. Companies that have access to, or can sell products and services not available to their competitors, can position themselves better in the marketplace. Like people, businesses need to be known for what sets them apart.

  6. How does this solution increase performance and productivity? Companies that are more efficient in the use of all their resources will be more profitable. Solutions that increase performance include automation tools, equipment upgrades, and new approaches to manufacturing and distribution.
For business to consumer (B2C) audiences, effective marketing messages are also about triggering strong emotional triggers that consumers rely on to make decisions about the value and benefits of the offers they receive. These include a sense of well-being, convenience, security, significance, exclusivity, positive social standing, and others.

In both business and consumer environments, with digital marketing technology, the playing field between big companies, mid-size businesses, and even startups has been leveled tremendously. The new success factor is not the size of your budget, but your skill in crafting the right message, sending it out through the right channels, and tuning the system for maximum results.

Only in this age of digital marketing could a small non-profit, with a very limited budget, reach an audience of millions per month worldwide, with their “ALS Ice Bucket Challenge” marketing message last year, and achieve results exceeding $100 million. Don’t let big-budget Goliaths trample you merely by the size of their footprint.

Marty Zwilling

Friday, December 18, 2015

6 Ways To Stop Selling And Get More Customers Buying

Image via Pixabay
Making more sales quickly today is no longer about selling. It’s all about getting customers to make a buy decision. Customers are more in control of their buying decisions than ever before, with the wealth of alternatives and information available online, and interactive access to sources they trust via social media. They don’t want to be pushed into a sale, but they love to be pulled in by what is important to them.

Thus, it is critical for sales and marketing people to spend more time understanding what motivates their customer decisions today and less time pushing for a fast close. It means more focus on the customer buying process rather than the customer selling process. Here are some specifics I recommend to accomplish this.
  1. Get the view from the customer early by talking to real people. With interactive social media and customers anxious to provide input, companies no longer need expensive customer panels and market research to get a true customer perspective. It’s important to do this early and continuously, since needs and motivations change quickly.

  2. Structure your sales process based on customer buying steps. Replace your sales process steps with customer action steps. Continually drive for more specifics on the steps customers follow, such as seeking friend recommendations, scanning for good reviews and checking impact on the environment. Tune your sales process to address each of these.

  3. Make selling collaborative rather than the domain of a single sales person. With today’s online tools, let the customer see and hear from your support organization, marketing and top executives. The customer needs to feel like he is joining a team who has his back rather than negotiating a special deal. Make every sale a win-win outcome.

  4. Identify specific decision points and demographics of the buyer. Individual buyer demographics can no longer be generic titles, such as mother, owner or organization. With today’s analytics, you can -- and need -- to look deeper at each customer for culture, age, lifestyle and buyer-experience expectations. Selling to the wrong profile loses sales.

  5. Identify the key relationships behind the customer buy decision. Trusted advisor connections and personal relationships often outweigh price and feature comparisons. This is true even with corporate executives, as well as individual consumer decisions. These relationships may be from support groups, online influencers or industry experts.

  6. Forecast lead closure rates based on customer buying steps completed. Sales projections based on sales steps completed puts the focus on the wrong equation. Closing sales requires an understanding of how to get the customer to move to the next step in his buying process. Where this need is not met should be a new marketing task.
Another way to speed up the customer buying process and improve your credibility is to know your customer so well that you can effectively address potential objections before they are even raised. This includes recognizing that you have competition, and using the competitor offering to highlight your advantages. It’s never a good thing to denigrate your competition.

Also, don’t forget to follow-up with and nurture existing customers. In today’s open communication environment, every satisfied customer can bring you four to six new ones quickly with credibility already established and without any selling. In addition, the cross-selling and up-selling opportunities can be far more lucrative than a sole focus on new customer acquisition.

Overall, the key is to put yourself in your customer’s shoes, and lead them through their own buying decision process. Most customers don’t mind being led, if they are convinced that you are a leader rather than a pusher. It’s important that you listen to their needs before charging down a specific path. Nobody trusts someone who has all the answers before they know the question.

Marty Zwilling

*** First published on Entrepreneur.com on 12/09/2015 ***

Monday, December 14, 2015

Don't Fall for These 6 Deadly Myths of Startups

Image via Flickr by Side Wages
Some entrepreneurs forget that they need an innovative business model along with an innovative solution to have a successful startup. Inventors alone, or business gurus alone, generally fail. It really takes a complementary pair of founders to improve the odds. That’s why I say “two heads are better than one” in a startup. Consider the original founders of Apple and Microsoft as examples.

Michael E. Gerber memorialized this concept many years ago in his classic book E-Myth, which postulates that most startups are initiated by entrepreneurs with technical skills, rather than business skills, resulting in a high failure rate. Since both skills are required in equal amounts for success, the single founder failure rate today is reported to far exceed 50 percent.

As an angel investor, I certainly see continuing evidence that this phenomenon hasn’t changed much in the past couple of decades. Technologists, in particular, who spend most of their time working in the business, rather than on it, still harbor several myths that contribute to their frequent demise:
  1. "A great technology will lead a successful business." In fact, both customers and investors often avoid the perceived high risk of innovative technology pitches. Customers don’t like new learning curves or dealing with unstable solutions. Early adopters love new technologies, but mass market customers want solutions, not technology.

  2. "If we design a great product, investors will find us." Technologists forget that investors are buying a chunk of the business, not the product. Every solution needs a business team first who knows how to market, distribute and support the product. Investors want proof of a business model and real customer revenue, as well as a product.

  3. "Business work should start only after the product is done." Business experts recommend that entrepreneurs start their marketing first to confirm that they have real customer interest and an appealing product concept. In addition, good marketing and support plans can take as long as product development. Do both in parallel to be timely.

  4. "Marketing is a necessary evil to sell weak solutions." In today’s world of information overload, everyone relies on marketing and social media to find solutions to match their needs. Even the best technical solutions often fail due to lack of good marketing. For innovative solutions, marketing is the education consumers need in lieu of experience.

  5. "Paradigm-shift solutions have no competition." The real competition to a new paradigm is the old paradigm. The first airplane faced major competition from trains and automobiles. If there is no competition, investors see no market, meaning no customers, slow growth and big marketing costs. Mention paradigm shift only with other technologists.

  6. "Free solutions are the way to build critical mass quickly." For many customers, free implies no real brand value, so loyalty is low, and support costs can still be high. Thus you need deep pockets or generous investors before advertising or alternative revenue streams can kick in. Premium pricing with exclusivity is often a better business strategy.
Every investor looks first for an entrepreneurial perspective that includes understanding how the business must work, and then how the solution does work. The required business work encompasses the long-term people and process growth associated with marketing, sales, distribution and customer support, as well as product costs, support and follow-on plans.

The best entrepreneurial perspectives go well beyond the technology and making money, into an integrated vision of the world where satisfying a customer need leads to the greater good for the environment and society. They provide a personal legacy, satisfaction and happiness. The challenge is to maintain a balanced view between inside and outside business drivers.

Social media and the Internet are great channels to test your balance and overcome the myths and biases we all carry as startup founders. I recommend more time building the right team and the best business with the best solution will evolve naturally. Finally, make sure your investor story is as strong on the business elements as it is on the solution.

Marty Zwilling

*** First published on Entrepreneur.com on 12/02/2015 ***

Friday, December 11, 2015

Respect Competitors and Capitalize on Your Strengths

Running businessman. As an angel investor, I hear many entrepreneurs making negative comments about competitors or asserting they don’t have any competitors. They don’t realize that knocking competitors is assessed as a weakness and denying that you have any competition suggests there is no market for your solution. The smart approach is to find competitors to highlight your strengths.

For example, if your new software adds innovative new features and mobile access to a classic offering, you could name and degrade current vendors for their lack of support, or you could highlight your innovative additions over the current market leaders. The first approach makes you look vindictive, while the latter will tag you as a positive thought leader in the industry.

Smart investors, competitors and smart customers, will listen and watch carefully as you position your new offering. Don’t let your passion and ego overcome good business sense and common courtesy as you educate people on other alternatives in the marketplace. Here are my thoughts on the right steps to prepare for these discussions and how to capitalize on your strengths:

  1. Declare and file your innovations early as intellectual property. Taking action to file even a provisional patent shows you have the conviction and skill to execute while others have no barrier to entry. Investors invest in people who take action rather than find the excuses that patents are not defensible, cost money or may be done later.

  2. Position your solution as broadening the market, not killing a competitor. Focusing on a competitor is dangerous, since you don’t know what they plan to announce soon. Highlight one specific offering for rollout, but make it clear that this is just the first of a long line of planned solutions which will expand the market and keep you growing.

  3. Quantify your value over current market alternatives. When comparing competition, don’t use fuzzy terms such as improved usability, faster, less expensive and more productive. Investors are looking for significant (20 percent or greater) cost reductions, training savings or expense reductions. Use real case studies and customer feedback.

  4. Know every competitor but position only the top three. Every investor hates those large competitive analysis tables filled with check marks and red dots. If your space is crowded, define three groups, and name a specific in each group, such as “Company X is the best of the cloud solutions.” Dig deeper than Wikipedia for facts on key competitors.

  5. Solidify your exit strategy by picking a competitor as a comparable. The best way to support your acquisition potential for $100 million -- or going public -- is to find a competitor who has shown it can be done. Like selling your house, there is no valuation more solid than a comparable next door. Investors need a liquidity event to get their money out.

  6. Highlight opportunities for 'coopetition' and strategic partners. Pick the best of the competitors and explain how you could both win by expanding the market for both, reducing common costs or cross-referral agreements. Most large competitors no longer do new products internally and are looking to partner and invest if you don’t declare war.

  7. Define competition in the broadest sense and maximize your opportunity. Saying you have no direct competitors implies a very small market. Investors want to see you in a billion-dollar transportation opportunity rather than a tiny-future market for cars that fly. Acknowledge that the real competition may be status quo -- but focus on how you can change that.

  8. Capitalize on team experience and relevant business area strengths. Previous business successes or recognized expertise is a tremendous competitive advantage that is often overlooked. Equally important are relationships with key suppliers, distributors and potential customers. Remember that investors invest in people more than the idea.

Entrepreneurs who clearly respect their competitors and know how to capitalize on their own strengths will attract the right investors as well as the right business partners. Denigrating competitors -- or ignoring them -- is a recipe for disaster. It’s always smart to take the high road.

Marty Zwilling

*** First published on Entrepreneur.com on 12/04/2015 ***

*** Spanish translation on Bbooster.org

Saturday, December 5, 2015

Effective Collaboration is a Necessity, Not an Accessory

effective-collaborationBuilding a successful startup is not a job for the Lone Ranger. Every entrepreneur must effectively collaborate with many people, including internal team members, partners, customers, and investors. Real collaboration requires leadership and initiative from the entrepreneur in order to drive the collaborative process and make the whole team better than the sum of its parts.

A few innovative companies, including the financial advice company The Motley Fool, are so convinced that collaboration is the key to their competitive advantage that they have added the role of “chief collaboration officer,” in the person of Todd Etter. Todd tells people that his primary role is to get people around him to creatively and intelligently think together. That’s the essence of effective collaboration.

While effective collaboration is easier said than done, it’s the backbone for any startup that wants to get their product off the ground. As Ken Goldstein, former Vice President & Managing Director of Disney Online, said: “Products start with people… which means products start with collaboration.”

So how can growing teams not only embrace the idea of effective collaboration, a relatively abstract term, but actually use it?

For starters, it’s important to note that even the entrepreneurs who seem to have an innate ability to attract and inspire others can improve their collaboration skills. Regardless of our title or position in the company, we are all capable of learning from the experience of others. You certainly don’t have to be a natural-born leader in order to help your team find angles for collaboration.

Based on my years of advising entrepreneurs and investing, here are the three strategies that successful startups use to make effective collaboration an integral part of how they work:

Successful startups make communication a visible top priority. Nothing undermines team collaboration like poor communication. This includes written, verbal and body language. You can typically tell an unhappy, disconnected team by the way they interact and carry themselves throughout the day. All team members need to know what is expected of them on any given task, what their teammates are thinking, and what has changed since yesterday. Each individual teammate should be encouraged to be a positive role model through their actions, and discouraged from relying on the initiative of others.

As with all effective communication, episodes of conflict will surely arise. Successful startups encourage constructive conflict and view it as a way to explore alternative ways of thinking. Surrounding yourself with “yes” people, or people with no conviction, may feel good initially, but it will not produce the kind of effective collaboration necessary for a startup to succeed. You need smart people, with emotions as well as intellect, and this means that conflicts will occur as different perspectives are surfaced. Successful startups do not let conflicts turn into fights; they use conflicts to help drive consensus.

Effective collaboration also means being strong enough to employ the two basic, but oft-neglected communication skills: asking and listening. The leaders of successful startups must be strong enough to ask for feedback, listen deeply to that feedback, and then act on it. Every entrepreneur, if they are committed to improving their team and their own effectiveness, will benefit from soliciting and actively listening to team feedback.

Successful startups foster individual credibility and trustworthiness. The surest mark of a trustworthy leader is one who delivers on every personal commitment, no matter how small or seemingly trivial it may be. Their actions, day in and day out, should showcase their willingness to both listen to and work with others. Effective collaboration is maximized on teams where everyone is credible in their own realm, and everyone trusts each other, including the leader. Again, actions speak louder than words.

But successful startups also recognize that everyone on the team needs to be a decision maker. Collaboration is not an excuse for anyone to avoid making a decision, and the expert on a certain part of a project should be given the chance to lead. People who are able and willing to make sound individual decisions, can make great decisions as part of a team if they’re given the opportunity to do so. The first decision of a startup leader must be to team only with people who can make timely, good decisions.

Effective collaboration can also be built when the leader introduces advisors to make team efforts learning opportunities. Successful startups occasionally see team projects as an opportunity to bring in outside experts to mentor team members, and guide them through complex issues and unfamiliar territory. They provide liberal access to inside leaders, with the expectation that collaborative efforts will be productive both for business and for personal growth.

Successful startups build a culture where innovation and change are normal. Collaboration is wasted effort for a team when everyone knows that nothing is likely to change. An innovative team solution must be accepted with a positive attitude, and initial team instructions should always encourage creative thinking and solutions. Effective collaboration can only grow in an environment where change is exciting and expected, rather than rare and painful for all.

This type of environment can be built through encouraging and even incentivizing thinking outside the box, with a structured process. Chaos is the result of no structure, and is non-productive. Effective collaboration requires a balance of open-ended thinking within a leadership structure that drives to closure in a timely manner. Successful startups encourage each other to define parameters at the start of each project, and then measure progress along the way.

However, even a perfect environment must reward both effective collaboration wins as well as individual contributions. If a team only rewards individual achievements, collaboration, even in a team that embraces change, will be stifled. Rewards can come in a variety of forms—from appreciative words and extra days off, to paying for an employee’s travel and registration to attend a conference in their field. In my experience, a balance between team and individual drivers is the most effective approach.

While these three strategies are the backbone for successful startups, it’s important to note that they must always evolve with the times. The increase of remote teams, for example, may present new challenges to effective collaboration. Team members that do not work together daily, or barely even know each other, will require extra effort to build and maintain communication, credibility, and trustworthiness. It’s up to the leader or entrepreneur to provide the bridge, the process, and the glue to keep the team efforts productive.

Thus, a positive approach to forming any collaborative team is to capitalize on preexisting or “heritage” relationships. Research has shown that when 20 to 40 percent of the members are already well connected, the team was able to provide stronger collaboration right from the start. It’s important to leverage these existing relationships, especially when new team members come on board and need time to understand the workplace culture.

Also, bigger doesn’t mean better when it comes to collaborative teams. Jeff Bezos, the CEO of Amazon, famously nailed this with the “two pizza teams” rule: If a team can’t be fed with two pizzas, it’s too big. Throwing more people into a critical team is one of the most common productivity traps that new entrepreneurs can fall into. It can stop effective collaboration in its tracks, and in my experience individual performance levels often diminish as more people are added.

Ultimately, an effective collaboration is one that strives for a win-win-win relationship for the individuals, the team and the company. Smart individuals working together soon realize that their collective results simply could not have been achieved alone. Each individual ends up learning far more than they contribute. Likewise, winning teams spawn winning individuals. The end result is this: focusing on and investing in individual-to-team development will mean a win for the organization.

In today’s rapidly changing and highly interconnected business environment, it takes more than a lone inventive genius to build a business. Successful startups realize that incentivizing effective collaboration for the entire team is a necessity, not an accessory. Those that embrace it, will carry on. Those that don’t, won’t.

Have you done everything you can do to create this type of environment? What have you found to be the most challenging part of effective collaboration?

Marty Zwilling

*** Published on TheModernTeam on 11/05/2015 ***

Friday, December 4, 2015

7 Traits That Define Work Productivity Superstars

business-people-productivityWhether your business is a startup or large corporation, you need at least a few superstars who can get things done, despite all the challenges and distractions in the world today. Certainly, we've all heard the excuses of those who can't or won't perform. We've heard the repeated demands on our time. Further, we've been frustrated by how long some people need to finish a task, and how few results we see from many of our team members.

That's why recognizing, hiring and retaining the most productive people is “job one” for every leader in every business. I have learned from my own years of experience in companies large and small that those people who are the smartest or have the best resume-style qualifications may not be the ones everyone counts on to get the most work done.

What non-resume qualities should a leader look for? Here are the key characteristics I prize:

  1. Focuses on completion rather than blind adherence to a defined work process. Processes should be guidelines to achieve a result; they shouldn't just be a compliance road map. People who look for process innovations, to achieve the desired results in the quickest possible time frame, get more done. The maximum value should be on getting things done, where no process has yet been defined.

  2. Knows how to read people and navigate organizational hierarchies. Working effectively with other people is the only way to get more done than any one person can accomplish. The same is true of working outside your organization, with the outside powers-that-be. Being able to work with politicians without becoming one is a trait I especially prize.

  3. Makes non-threatening decisions with humility and patience. Highly emotional reactions and outbursts are rarely productive in business environments. Instead, calm and resolute determination generates support for the task at hand, rather than distracting from it. People who get things done should be aggressive but not confrontational.

  4. Capitalizes on a powerful position title without using it as a stick. Effective leaders get more done by using their power position to ask for help, rather than assigning people to tasks. They know that listening and rewarding can often be more persuasive than giving orders with penalties for non-compliance.

  5. Builds a reservoir of goodwill without asking for anything in return. Good business and good working relationships must always be seen as unconditional, meaning not motivated by an expectation of future payback. The result will be people and organizations wanting to help you, rather than feeling an obligation to contribute.

  6. Acts within the existing culture, while working to improve it. New challenges should be seen as an incentive to be more creative, rather than an excuse to fail or pick a fight. People who get things done lead change by example, positively showing a better way within the culture. Culture change becomes voluntary, not forced.

  7. Displays 'street smarts' and real domain experience. These are the people who can quickly provide examples of how they were personally able to overcome unusual challenges and achieve results. They also are proud to relate their experience in helping other people on their team overcome hurdles and achieve common objectives.

Overall, one of the best and most visible attributes of people who get the hard work done is that they love to be challenged, and get their satisfaction from resolving problems and getting results. The down side is that they may be easily bored, and quick to look for greater challenges elsewhere if you are not attentive with your leadership and organization, or reward the wrong things.

If your team is like many described in recent surveys -- where only 13 percent of the members surveyed described themselves as fully engaged -- you can bet that the rest will lack the characteristics needed to be the superstars that I have outlined here.

It may be time for you to take a hard look at your hiring, training and motivation systems, to improve your superstar hit ratio. The success of your business depends on it.

Marty Zwilling

*** First published on Entrepreneur.com on 11/25/2015 ***