8 Challenges To Overcome In The Growth Of Hyperlocal

In this age of instant communication via the Internet, It’s ironic that I can now find out what’s going on around the world often more easily than in my own neighborhood. This opens an area of business opportunity, popularly called hyperlocal, which still seems to be underserved. Some experts have tied this market to location detection hardware (GPS), but even that is now pervasive on all smart devices.

Most people have heard of Foursquare for local nightlife and Airbnb for rooms, but other nationally recognized sources for local services are still hard to find, including social media, local news, advertising, and event calendars. There is positive room here for many new players, but if you want to be a candidate, there are some special challenges you need to consider:

1. Advertisers won’t participate until the user population is large. I still hear often the dream of a free service to users, supported by advertising, per the Facebook model. Entrepreneurs don’t realize that Facebook spent over $100 million, before revenues from advertising turned cash positive. Business founders need deep pockets for this model.

2. Maintaining current content is costly and time-consuming. If you don’t engage users with comprehensive and valid content the moment they enter your site, they are not likely to return. The solution is to incent local users to keep the content fresh and abundant, which requires that they see real value in the result. It has to be a win-win process.

3. Local businesses expect proof of value, not promises. Until a new brand has national recognition or high promotion, it won’t be found or used by local customers or out of town visitors. You need metrics to show dominant penetration of the relevant customer demographic, added value over existing media, and real customer testimonials of value.

4. You need local partners and relationships for credibility. Change, acceptance, and trust become more difficult as you get deeper into the fabric of a community. People are wary of outsiders and remote players looking for relationships. Overcoming these hesitations may require promotion events, meet and greet opportunities, and more time.

5. You need to find common elements to scale the business. Expanding neighborhood-by-neighborhood or city-by-city is not a simple cookie-cutter process. Hyperlocal in New York City is different from hyperlocal in Kansas. Cultures and values are different, pricing norms are unique, and customer needs have to be validated in each location.

6. Monetization may require multiple business models. Advertising and local business promotions may be adequate in some cases, but others may require a percentage of every transaction, or adding local products and services for an ecommerce model. Every business model has to meet local licensing, taxing, and reporting requirements.

7. Local staffing and clerical requirements must be minimized. Employees are the most expensive resource for most businesses, and are difficult to acquire, train, and schedule. Look for innovative ways to automate the processes, sell remotely, and personalize the services without adding people to the equation.

8. External investors tend to focus on products rather than services. Angel and venture capital investors look for opportunities that are highly scalable, and have already demonstrated good traction. Several of the challenges already identified suggest a greater reliance may be required on bootstrapping and organic growth.

I predict that hyperlocal services will continue to emerge and prosper, despite the challenges. Businesses that focus on the local community have long been the source of satisfaction and financial livelihood of entrepreneurs. In this new digital age with the renewed focus on relationships and shared experiences, I see a new wave of hyperlocal businesses.

In fact, hyperlocal can be the proof of concept for your business, or it can be the final destination. In either case, it’s an opportunity that doesn’t require heavy technology, a big inventory, or rocket science. Anyone can do it. Isn’t it time that you joined this age of the entrepreneur?

Marty Zwilling

*** First published on Inc.com on 12/13/2016 ***

7 Key Principles of Question-Based Leadership To Win

Too many people in business just expect their leaders to give orders. Maybe it’s for this reason that as professionals advance in their career, they tend to start asking fewer questions and providing more answers. Smart leaders, on the other hand, learn to ask more penetrating questions, listen carefully to expert input, and empower the right people to get the best solution.

This question-based leadership approach starts with humility and a firm belief in the old adage, “There are no stupid questions, only stupid answers.” It also requires the confidence to challenge a questionable assertion from an outspoken team member, or ask the question that everyone else seems to be dancing around.

Here are seven key principles that I recommend you follow as an aspiring business leader or entrepreneur, based on my own experience in large companies as well as startups:

1. Proactively ask for input to hone your vision. No matter how strong your business and technology insights are, you can benefit from input at all levels of the organization, as well as outside experts and customers. This will also enable buy-in from all constituents, leading to their personal commitment in delivery. Everyone will see your vision as theirs.

2. Ask questions to enable team members to solve problems. People feel much more accountability and conviction to succeed with their own solutions, versus a solution imposed on them by someone else. When team member solutions work well, everyone wins, while top-down decisions provide minimal satisfaction and learning for the team.

3. Listen actively to team member input to foster mutual trust. This approach not only provides real value, but is important in building a culture of unity and collaboration. In trusted environments, failures are seen as learning experiments, rather than opportunities for punishment. Leaders who are always talking rarely learn anything new.

4. Use questions to coach and develop team members. The best leaders focus on coaching and mentoring people on decision making, rather than giving orders. By doing this, you'll help the whole organization make better decisions, and help individuals solve problems that are holding them back, learn new skills, and advance their careers.

5. Push decisions down the chain to the level responsible. The best leaders strive to match decision-making with the team responsible by asking the right questions. This results in better decisions, higher acclaim for the team and the leader, and it avoids the blame game. Ultimately, it creates leadership businesses as well as business leaders.

6. Inspire and motivate others to lead, not just work in your business. Motivated team members are much more likely to delight customers and create memorable customer experiences. At the same time, inspired team members providing answers will be more productive, satisfied, and loyal to the business. It’s a win-win situation for all constituents.

7. Build real relationships by asking questions. Quality questions provide a common ground for productive relationships with team members, rather than the shallow connection of following orders. Relationships with customers and partners are key to your own image, and the future of your business. Leaders grow through relationships.

Every executive realizes that there are not enough hours in a day to direct personally all the activities in a growing business. Some insist on continuing to make all the decisions, slowing down the business, making strategic mistakes, and injuring their health. The best learn to ask more questions, delegate more decisions, and grow a team of leaders within their organization.

By following the principles of question-based leadership, smart business leaders find more innovative ideas, more people committed to the right actions, and a business culture that can thrive in today’s rapidly changing marketplace. It’s time for all of us to ask more, listen more, learn more, and lead the way to our own success and satisfaction.

Marty Zwilling

*** First published on Inc.com on 12/09/2016 ***

8 Key Principles To Keep Up With The Speed of Change

Things change so fast these days in business that your first priority as an entrepreneur is to stay current, by talking to customers, peers, and experts. Secondly, you must constantly communicate suggested changes to your team, implement necessary pivots, and realign all the elements of your business, including partners, investors, and vendors. No change means falling behind.

The days are gone when growing a business meant putting repeatable processes in place, settling into a groove, and simply cranking up volume. Now it’s all about how fast you recognize and adapt to market change, new competitors, and new technology. Here are eight key principles I have learned from experience as a business advisor to keep you on the right track:

1. Regularly realign your business vision and goals. Smart entrepreneurs overtly plan every month to re-sync their vision and objectives with newly-learned market realities. This means regular updates are required to your business plan, marketing message, social media, and website content. Static content quickly becomes dead content.

2. Start slow, build momentum, and keep accelerating. Too many entrepreneurs start fast, but lose momentum and the ability to change as the organization grows. It’s better to listen carefully, test them market, and take baby steps in the beginning. Build the ability to change into your processes, so that pivots later don’t introduce delays into your business.

3. Pay particular attention to advisor and investor input. Investors and advisors are typically super-sensitive to market evolution, and should be seen as your early-warning system for change. Failure to react quickly often leads to funding freezes and founder replacements. Smart entrepreneurs restrain their ego and don’t react defensively to input.

4. Foster a culture and reward system encouraging change. Incenting and rewarding new initiatives, versus penalties for stepping outside the box, will greatly facilitate your ability to keep up with change. Your team will follow what you do, not what you say, so you have to be a role model for market and customer sensitivity. Keep change positive.

5. Never stop communicating, even when the message is clear. Every executive I know hears the same complaint from their team, “Why didn’t someone tell me about the change?” As a rule of thumb, you need to repeat every important message at least four times, in different contexts, to even dream that anyone will adopt it as their own.

6. Be ready to reshuffle team members to expedite change. Not everyone will have the right skills or the right mindset for new initiatives. Bringing in some new blood will hasten any change, and moving people out who are resistant to change is the key to success. Initiate new strategic partnerships and investigate acquisitions versus in-house changes.

7. Define and use market metrics to tune your plan. Businesses often settle on one social media or distribution channel based on initial testing, and never look back. These days, new channels appear almost daily, and old ones lose their luster. You need metrics to spot these changes, and regular new initiatives to test new and old alternatives.

8. Regularly update internal process tools and technology. This means setting a culture of continuous improvement in processes, as well as products. Measure your productivity increases against current competitors, rather than against your own baseline. You may be improving by your own standards, but losing ground as new competitors move faster.

At the highest level, maintaining focus is still the most critical requirement. Keeping up with change is not just an “additive” process. Things that no longer apply or work must be deleted, or the result will be bloated, complex, and slow processes. Per the guidance of Jim Barksdale back in his FedEx days, “The main thing is to keep the Main Thing as the main thing.”

The Main Thing in every business today is to provide an experience that is so positively memorable that customers become your biggest advocates, via word-of-mouth, social media, and the multitude of review sites. If this isn’t happening for your business, you are already behind the curve for change and realignment. It’s time to pick up the pace or you may lose the race.

Marty Zwilling

*** First published on Inc.com on 12/06/2016 ***

10 Recommendations For Getting Ahead In Any Business

Does it sometimes seem like people all around you are getting promoted, or leaving to start their own business, while all your hard work and experience are getting you nowhere? Maybe it’s time to take a hard look at your habits and the perceptions they convey, compared to some of the other people on your team. These people can’t all be related to the boss, or be just lucky.

Rather than focus on negatives, let me summarize key positive attributes that I look for in people to move ahead, from my own experience as a corporate executive, and many years mentoring entrepreneurs. Most of these have very little to do with super-human skills, but a lot to do with your mentality and flexibility:

1. A willingness to tackle new and unknown challenges. We all know the dedicated professional who reliably does their job, but is always too busy or reluctant to accept new assignments, or take on a new challenge. Particularly in an innovative startup, everyone has to expect problems and change. People who are problem solvers are indispensable.

2. An ability to proactively step in where needed, rather than waiting to be asked. Many times, extra help is temporarily needed due employee illness, order surges, or holiday coverage. Some people see these requirements and volunteer to help, while others keep a low profile, or wait to be asked. Team members who help others are usually promoted first.

3. A skill at nurturing good relationships. Some employees avoid interactions with others, hoping to minimize their workload. Unfortunately, this also minimizes their opportunity to shine in any way that is positive to their career or for their company. Working together effectively requires extra effort in managing relationships.

4. A positive attitude. It may be tempting or popular to join the crowd that loves to bash management, company direction, or internal processes. If you really want to change things or run your own company, initiate some positive ideas on how to improve productivity or set the culture as you would like it to be.

5. A desire to drive (not block) future change. Innovative change is a given in successful organizations, run by successful people. Team members who are drivers for “the way it’s always been done” are not normally considered for new positions or more responsibility. They certainly would be unlikely to succeed in a new startup.

6. A tendency to present oneself as the boss's backup. This may require a bit of extra work and initiative on your part, but definitely gives you an edge when your boss retires or is promoted. It requires that you maintain a proactive relationship with peer group managers, and will definitely give you a better perspective on business needs.

7. A determination to complete every task. The people who never give up and overcome difficult challenges are tagged as the best of the best. It’s a skill and a mindset that will serve you well when starting your own business, as well. It’s easy but wrong to come up with excuses, or blame someone else when things go bad.

8. A capacity for education at the next level. Too many employees are searching for that magic course that will make their existing job easy, rather than preparing for the next one. These days, the best education may be online, in business journals, or in blogs that your executives recommend. Also, build mentoring relationships at the next level.

9. An ability to project an image appropriate for the next position. Perhaps this means dressing more professionally, or speaking more broadly about company direction. Every company spends money on their image and branding, and you should treat your personal brand accordingly. Learning how to market yourself is the key to running your own company.

10. A prowess at picking battles strategically to keep from losing the war. No one wins every battle, so swallow your ego and turn potential negatives into positives, For example, if an executive uses your idea without giving credit, point out how great minds think alike. There is no extra credit for being a sore loser. Highlight your wins rather than your losses.

Every one of these strategies are critical to the success of you as an entrepreneur if you choose to step into that lifestyle, so start practicing early, before you quit your day job. You may decide that your current career is less risky than the alternative, and existing career satisfaction has started to meet your expectations. Either way, you win and your business wins.

Marty Zwilling

*** First published on Inc.com on 11/30/2016 ***

6 Key Attributes That Investors Look For In A CEO

Every business needs that ultimate leader and decision maker at the top, commonly given the title of Chief Executive Officer (CEO). Sometimes it’s the business founder, and in other cases the CEO is recruited by the founder or investors to complement the skills of the technical team. Everyone recognizes that even the best idea needs a great execution to assure success.

So what are the key attributes of the CEO you need? How does a startup founder know whether he or she has the skill and bandwidth to fill the role, or what and where to look for outside candidates? Of course, every business has unique requirements, so there is no candidate that fits all businesses, but in my experience there are a basic set of expectations which define the role:

1. Attract, incent, and manage great people. This role is quite different from the initial challenge of conceiving and developing an innovative product. Even the best founders soon find that they can’t physically do everything required to start and grow the business. Failure to move from the “do-er” role to a “manage” role kills many promising businesses.

2. Be the role model for effective leadership. Real leadership is much more than managing people and projects. Peter Drucker famously said, “Management is doing things right; leadership is doing the right things.” A good CEO must do both, while all the while providing a positive model to propagate these actions through all levels of the team.

3. Set the company culture and communicate goals and values. All team members look to the CEO as the model and driver for company culture, both internal and external. Everyone watches how employees are treated and decisions are made, and actions speak louder than words. Customers and investors listen for a consistent message.

4. Drive the financial strategy, including checks and balances. In the beginning, the CEO is the chief fund raiser, starting with setting the strategy for organic or leveraged growth. Beyond that, he or she must balance the constant demands for more resources from marketing, development, and support. Proper delegation to a CFO makes this work.

5. Negotiate and close key deals with partners and customers. A good CEO is always the top business development person, both strategically and tactically. They are expected to know the market and the marketing process, and build relationships with industry influencers, peer executives, community leaders, and even competitors.

6. Always forward thinking and planning for the future. The initial stages of every new business require a focus on tactics, but long-term success requires more strategic thinking, and the ability to “see around corners.” The best CEOs focus on where the market will be tomorrow, and are willing to change and take the risks to be there first.

No one is born with all these attributes, but they can be learned from experience in similar roles in other organizations or prior businesses. Every startup founder should start networking early with peers, advisors, and industry organizations to check their fit, and build relationships with other potential candidates.

These days, in addition to networking, you should also be exploring one of the online business matchmaking sites that have sprung up in the last few years, like FounderDating, or scour LinkedIn and funding sites like ProSeeder for candidates. Putting yourself on these sites may also be beneficial to your career down the road, not matter what happens.

Finally, executive recruiters are still a reliable alternative. Unfortunately, in my experience, many startups and small businesses really can’t afford this route, considering that the fee to find a qualified CEO may be in the $50,000 range.

In all cases, it takes more than a good resume and experience to make a good CEO for your company. The chemistry, culture, and values need to match yours, and be compatible with all the key members of your team. Just as in personal relationships, these things won’t all be evident in a first meeting. Take your time, and get to know the candidate outside of work before you commit.

So start developing and practicing these disciplines on the day you create your business, as they will serve you will, whether you decide to run the company for the long-term, or whether you plan to find that CEO of your dreams. Your investors will love you, your career will prosper, and the company’s chances for success will dramatically increase. It’s the win-win outcome we all want.

Marty Zwilling

*** First published on Inc.com on 11/27/2016 ***

7 Keys To Teaming With The Right Mentor For Success

Why is it that only the most successful entrepreneurs, including Mark Zuckerberg, Bill Gates, and Richard Branson, admit to having a mentor and actually use them? Starting a new business is tough, and the last thing you need is to suffer the same mistakes that have killed businesses like yours before you. Yet many entrepreneurs I know are too proud or too shy to even ask for advice.

Obviously, I’m a big fan of business mentors based on my own experience, since I have been at different times on both the contributing and receiving end of the relationship. I realize that finding a mentor and making the relationship work takes work and commitment on both sides, much like finding a good life partner.

Most successful business people, whether retired or still active, would love to share some of the wisdom they have gained from their own experience, but are not inclined to impose themselves on others. They expect you to take the initiative, to ask them, and to make it a fun and productive relationship. Here are my guidelines on how to make that happen:

1. Identify specific issues and goals where you need mentoring. First, you need to admit that you want mentoring, and in what areas. If you don’t have any idea what you are seeking, you won’t know when you have found it. It’s tempting for technical founders to seek more depth on technical issues, when they need marketing and financial help.

2. Be willing and able to commit time and effort to the process. Finding a mentor won’t help you if you don’t have time to listen, and are not willing to do your homework to ask the right questions. Mentors are people too, so they will quickly sense when they aren’t valued. Sessions must always remain positive and not defensive, rather than excuses.

3. Ask for a reasonable time commitment from a mentor candidate. Even the best mentor may be of no value to you, if you can never reach them, or they never find time for you. Then make sure you never make yourself a burden by frequent calls or wasting time on trivial subjects. The best approach is regularly scheduled small blocks of time.

4. Prepare and plan to lead each mentor session for best productivity. Don’t expect the mentor to know and drive your business. Provide the mentor with your relevant business metrics and data, if possible, before each meeting, to allow them to do prior homework as required. The most valuable insights may be for broader or future business implications.

5. Expect a mentor to tell you what you need to hear, not be a cheerleader. The best mentors are not previous close friends or family, who may tell you only what you want to hear. Most of us need both friends and mentors, and the ability to tell the difference. Most mentors don’t have the time to be your business coach to help you with generic skills.

6. Plan for regular communication both ways, both written and verbal. The more a mentor knows about your situation, the more directed will be their help. On the other hand, a mentor is not your direct report, or your boss. Thus don’t be handing out work assignments, or expecting the mentor to make your decisions for you.

7. Manage the relationship to keep it positive and productive. Don’t tolerate unresponsive or negative mentor relationships, and end them quickly, just as you would with non-productive partner or employee relationships. But don’t burn any bridges, since a mentor will likely have relationships with other key business connections.

In addition to these considerations, there is always the question of mentor monetary compensation. If you can find a mentor who shares your passion for the business or cause you support, or make it a learning opportunity for them, that may be adequate compensation.

In any case, it is good form to offer something, such as a monthly stipend, expense coverage, or perhaps a one percent ownership in your startup to show your commitment. I assure you, the returns will far exceed your costs.

Don’t let your ego or time management abilities rob you of this valuable competitive advantage. Your business needs every edge to get to the next level.

Marty Zwilling

*** First published on Inc.com on 11/24/2016 ***

7 Ways To Think Outside the Box To Grow Your Business

Too many entrepreneurs put their best creative thinking into the startup idea, and believe that the business implementation simply requires following tried and true business practices. In my experience as a startup advisor, nothing could be further from the truth. To win, you need to think outside the box to deliver a better customer experience, business model, and new positioning.

It isn’t something that comes naturally to most business people. They are trained in school, and by many experts, that running a business requires logical workflows and analytical thinking. It takes extra effort and focus on some special techniques, including the following, to get the edge you need over your competitors in customer attraction and retention:

1. Set order-of-magnitude goals. If your goals can’t be achieved by conventional thinking, your brain and the people around you will more likely revert to out-of-the box ideas. Successful entrepreneurs call these paradigm shifts or disruptive technologies, where new solutions cause unanticipated opportunities.

2. Challenge your team to focus first on quantity of ideas, not quality. This is the essence of brainstorming and ideation. Ideas from the edge often don’t look good at first glance, but need time to evolve into full-blown creative solutions. Even bad ideas often have a nugget of potential that can be transformed into one of your best alternatives.

3. Offer incentives or competition. There is nothing like friendly competition or an attractive reward to bring out a new base of un-edited ideas. This approach works best if you make it a quick effort. There is a good possibility that one of these will evolve to be the gem you need to grow your business.

4. Search for recognizable patterns in disconnected domains. Out of the box thinkers get new ideas by comparing unrelated subjects, such as customers and investors. I find that startups rarely think of customers as investors, even though major customers might see ROI as a positive reason to invest in future growth, and chose to pay for equity.

5. Explore contradictory approaches. This forces you to change the way you look at alternatives, and suddenly the alternatives you look at change. For example, the old assumption that lower prices will drive volumes, may give way to higher prices and exclusivity implying more value to discerning customers.

6. Change the way you talk, and your thinking will follow suit. When you make a conscious effort to focus on the positives rather than the negatives, your creative mindset will push the positive limits, rather than get stuck on worst case scenarios. Almost all alternatives have pluses as well as risks, so push the limits on the positive side.

7. Challenge the outer limits of alternatives. With the pace of change today, it makes more sense to plan for obsoleting a product line with a new alternative well before profits go to zero. “New” companies, like Uber, can build billion dollar valuations, and start acquiring older companies seen as much larger.

It’s important that you apply these initiatives to all elements of your business, rather than just on new products to sell. If your imagination is primarily technical by nature, then you need to complement your efforts by attracting partners with more imagination in marketing, sales, finance, and operations. A successful business is a combination of creative ideas in all these disciplines.

You can’t “will” a certain number of creative ideas, but you can certainly measure how many have been implemented in your business recently, and measure what worked and what didn’t work. If you can’t name some new ones in the works right now, your business, or your career, is likely falling behind the competition. Start thinking outside the box.

Marty Zwilling

*** First published on Inc.com on 11/17/2016 ***

7 Keys To Making Staff Meetings An Asset vs Expense

By Ernst Gemassmer, Chairman, Startup Professionals

Most of us view weekly staff meetings today with a degree of trepidation and frustration. Many have suggested that it is time re-engineer this process, or eliminate the meetings entirely.

In an old survey on staff meeting obstacles conducted by GroupSystems, I found the following not-so-surprising statistics for the average 50 minute staff meeting:

• Much time wasted on inefficient process – over 30% of the total time
• No meeting minutes or decisions recorded – 59% of the cases
• Nothing usable gained from meeting – 68% of respondents

These kind of statistics are often used to suggest that staff meetings be eliminated, but I don’t agree. I would assert that these meetings are necessary to run a company of any size, and are not a necessary evil. The alternative is chaos, or autocratic leadership.

The opposite of chaos is some type of democratic leadership, which requires regular meetings of all teams at every level, on a regular basis. In my experience, these can be very productive for all concerned. But the following basic principles are followed:

1. Communicate the time, purpose and process. Executive staff meeting. The CEO who sanctions the meeting must set expectations clearly. People need to know what they are expected of provide and communicate, what they will hear, and when to be there.

2. Schedule in advance, and stick to the schedule. Schedule meetings at least every other week throughout the calendar or business year. Start on time, even if everyone is not present. Demonstrate respect for the people who show up on time by beginning promptly. Individuals that come late can 'catch-up' later.

3. Don’t delegate and don’t derail your own meeting. Except in an emergency, you should show up on time, conduct your own meetings personally, or cancel the meeting. There is nothing so frustrating or ineffective as a meeting run by a surrogate, used for personal tirades, or dragged off track by a vocal member.

4. Everyone has a voice, with a moderator for action items. I recommend a fixed agenda segment where each attendee distributes and discusses a one page written report. The report is to follow a specific format including progress, problems, and plans. Each subsequent meeting picks up incomplete items. Action items are logged by the leader or scribe.

5. If decisions are required, close the loop on each one. A group decision does not require a total group consensus, but it does require a process that is agreed, understood, and followed by all. How many meetings have you left where no one knows what was decided, or worse yet, everyone has his own view of the outcome?

6. Moderate the discussion and the filter agenda items. Staff meetings are definitely not the place to discuss individual performance (handing out praise is fine), or spending time on specific projects that relate only to a few individuals. It is the place to communicate goals for the following period, and acknowledge accomplishments for the past period.

7. Hold them consistently across every division/functional department. The CEO should encourage each of his direct reports to conduct staff meetings in their own divisions or functional areas.

It may well take you several weeks to reinvent your staff meetings along the lines recommended above. However, you will quickly note that the team will cooperate more than before, and will more likely surface critical issues, determine alternatives, and avoid surprises.

9 Transaction Models Shape Your Customer Experience

Focus is everything in a business, whether it be a new startup or a large enterprise. In my role as a business advisor, I often see well-meaning entrepreneurs try to be everything to everyone, which results in many things done poorly, and few totally delighted customers. People are confused by multiple messages, and employees are frustrated trying to personalize customer experiences.

These days, the whole business experience is often more important than the product. If the shopping process, delivery, and support experiences are not designed-in and delivered consistently, no after-the-fact effort or product feature can compensate for the lack of it.

The specifics and need for an overall service experience design were driven home to me in a new book, “Woo, Wow, and Win,” by Thomas A. Stewart and Patricia O’Connell. The authors provide details and multiple examples of how imagining, creating, and rethinking the execution of every aspect of the transaction not only better satisfies customers, but advances your strategic goals.

Most experts agree that there are at least nine generic types of customer experiences commonly in use by successful businesses today. As a place to start, I recommend that you model your business after one of the following archetypes, understanding the pros and cons, rather than defining a new one with a large inherent learning curve:

1. The aggregator – one-stop shop. Popular examples of this type include Amazon for buying, eBay for selling, and Craigslist for anything. Aggregators delight customers by offering a vast array of products or services under the same experience. Success requires a lean and powerful back office, and a quick recovery when things go wrong.

2. The bargain - we will not be undersold. Many entrepreneurs start out down this path, with dreams of being the next Walmart, Costco, or Dollar General. The challenges include lean margins, with little room for personalization on mass offerings. The biggest danger is to think that nothing matters except price, in an age where service is king.

3. The classic – top of the line, just the best. Brands such as Mercedes, Brooks Brothers, and Yale University confer prestige and power to their customers, and imply excellence. Yet they have to be careful not to chase fads, without ever falling behind the times. Paying top dollar is part of this customer experience, so the audience is limited.

4. The old shoe - we are your local; you are our regular. There are few market positions more powerful than being a familiar, comfortable, hometown business. Very few of these are able to go national or global and still retain the warmth and intimacy of their expected customer experience. Change is hard in this model, and the human element is key.

5. The safe choice – you cannot go wrong with us. Safe choices are frequently old brands, like traditional banks and department stores, but even technology companies like IBM can fit this mold if they design themselves appropriately. With this model, the urge to evolve is tricky, since change scares people, and can easily distract company focus.

6. The solution integrator – we put complex things together. Well-recognized users of this model include Deloitte, Lockheed Martin, and Oracle. These companies walk the fine line between selling discrete services and products. Productizing can easily destroy the magic of the service, putting them in the same customer experience as solution sellers.

7. The specialist – no one is better at what we do. You can find specialists in almost every industry, focused on a particular type of service. Their challenge is to make their excellence visible to customers, and design a customer experience that delights users. Focus is their strength, and they must avoid the temptation of mass-market for growth.

8. The trendsetter – we are sleek and hip. Trendsetters, like Uber, turn their first-mover advantage into a business model, enticing others to play their game. They are cool, and they foster engagement, not distance. Yet sometimes, they can get too far out in front of customers, and lose the market. Experience design has to change as the market evolves.

9. The utility – we are a public trust. Many of these are regulated, and risk becoming bureaucratic. It’s tough to design and maintain a positive customer experience, since customers often cannot choose their utilities. Yet, over time, if they take their customers for granted, they can be pushed out or superseded by other solutions.

In any case, your challenge is deciding how you are going to market, and designing every aspect of your customer experience. The model selected will drive what offerings you make, and what expectations you set. Just as importantly, it identifies the customers you seek to delight, and the customers you expect to happily look elsewhere without becoming your nemesis.

Service design and delivery can only be successfully done proactively, and it has to start with what you want to promise as the seller, rather than trying to accede to everything a customer asks. Is your company as focused on designing the customer experience as they are on the product or service offered? Your long-term survival and success depends on it.

Marty Zwilling

*** First published on Huffington Post on 11/30/2016 ***

7 Poor Leadership Habits You Must Avoid At All Cost

Like many other career-minded business professionals, are you still waiting impatiently for that appointment to a leadership position, so that you can begin demonstrating your real leadership ability? In reality, you are already being evaluated for leadership by the habits and attributes you demonstrate today, so now is the time to sharpen your focus and behavior, not later.

Everyone knows that leadership means taking the lead, but some forget that there are negative behaviors that can override even the best initiatives. Leadership is not about how well you give orders as the boss – it’s much more about what you do than what you say. In that context, here is a list of things from my experience that you need to stop doing now, to qualify as a leader:

1. Don’t ever play the blame game. Blaming something or someone for any failure, however slight, is a sure way to get you branded as a non-leader. Everyone makes mistakes, so accepting responsibility and learning from the consequences, rather than denying culpability, is what separates winners from the losers in the longer term.

2. Stop stressing out and worrying out loud publicly. Team members expect leaders to calm their worries, not create or amplify them. At best, worries expressed by others come across as excuses for possible later failures. Every leader has qualms and fears, but only verbalizes their own positive ideas for moving ahead to overcome the challenges.

3. Never highlight the negatives of others or the company. Leadership is all about highlighting positives, rather than punishing negatives among team members. People who speak critically of co-workers, friends, and customers, are positioning them as scapegoats for later failure. Leaders seek private discussions for negative feedback.

4. Avoid the perception of being too busy to help others. Real leaders always find time to be accessible and listen to others, and make genuine offers to help. Being “too busy” or overwhelmed is the most common excuse for leadership failure. Your skills in prioritizing, managing time, and delegating are the antidote to the busy perception.

5. Don’t use multitasking as an excuse for mediocrity. In every job position, the leader is one that you can count on to demonstrate integrity and quality in everything they do, no matter how many distractions or related tasks must be managed. Mediocrity is a disease that will quickly infect others, and can ultimately bring down your whole company.

6. Procrastinating and keeping your work area unorganized. If it looks to others like you're out of control in your present assignment, you'll never be considered for a leadership position or more responsibility. Doing things haphazardly and procrastinating is error-prone and not productive. Co-workers are always looking for positive role models.

7. Failure to communicate regularly and effectively. If you find yourself with a thousand emails in your inbox, or regularly don’t bother to follow-up or call people back, it’s unlikely that anyone will consider you for a leadership position. Communication must be consistent, timely, and efficient in all media types, whether written, oral, or texting.

Some of these behaviors slip out of all of us in extreme environments. The challenge is not to let them become habitual, and to exhibit more good habits than bad ones. Otherwise you and the people around you will see only bad habits, and not your accomplishments. Your reputation and morale will suffer, your consideration for promotions will decrease, and productivity will suffer.

Leadership habits and attributes don’t happen as part of a promotion, or automatically appear after years of work. The best habits are learned by proactively taking small steps forward every day, learning from failures, and highlighting the strengths you already have. Anyone can improve their own behavior over time, and suddenly finding themselves an “overnight success.”

Marty Zwilling

*** First published on Inc.com on 11/14/2016 ***

5 Keys To Success In Rolling Out Software Worldwide

By Ernst Gemassmer, Chairman, Startup Professionals

With the pervasiveness of the Internet, the world is smaller. The cloud makes software easily accessible, without waiting for CD shipments to arrive and be installed. The good news is that the reach of your new software application is instantly worldwide, and the bad news is that most people still prefer to work in their own native language. That means that you need to face the issues of translation and localization sooner rather than later.

The process of localization is still a time consuming, manually intensive, and expensive effort. Localization is not only desirable, but essential to gain and keep market share in specific countries.

In my experience, there are many considerations which are critical to the productivity and success of this effort. These include the following:

1. Plan for international from the beginning. Even though it usually makes sense from a marketing perspective for a startup to stage software rollout to various linguistic groups, it makes no sense to design and implement your application that way. All implementation should be done in Unicode, with user interface, currency, date formats, and database considerations for all the languages required.

2. Begin parallel translation early. It may seem less expensive to wait until all your screen layouts, online help, and written manuals are ‘final’ before arranging for translation, but the reality is just the opposite. Late translation will uncover design issues that are expensive to fix, and the inherent time delays and testing can set back delivery up to six months. Even though this process might require some re-work, a sizeable reduction in localization time can be expected. Note that this will require close and trusted cooperation between engineering/development and each localization group.

3. Optimize the costs of localization. The cost of localization can vary widely, depending on the approach taken. Assuming that your company has an internal localization coordinator, who has personal contacts with localization firms in different countries, the direct cost of localizing into a single language could still be up to $50,000. However, if you utilize an outside firm to handle the entire process, the cost will be significantly higher. My advice is to select and work directly with a localization group in each selected country, avoiding middlemen. It is essential to develop trust between your company and the respective localization group.

4. Prior experience is critical. For a startup, find an international partner, or hire a new team member who has done it before. As your company grows, this person should reside at corporate headquarters and report solid line to the head of international operations. In addition this person should report, dotted line, to product development or engineering. Ensure that the localization person is a good and patient communicator and is fully accepted by the engineering/development group.

5. Measure the return versus the investment. There are literally hundreds of interesting locales in the world for every application, but not every one is a real market opportunity. Do your homework on potential, and then track the results, both with respect to incremental sales, as well as the costs of localization and maintenance.

There are many other pitfalls of poor localization practices, including high maintenance costs and costly delays in reaching attractive markets. Also, you must remember that localization costs are up-front costs, which must be fully funded before any incremental sales revenues can be achieved.

I have personally implemented the above recommendations repeatedly. The most successful project resulted in release of localized products, for all the major languages in Europe, within four weeks of US product introductions.

13 Red Flags To Avoid In Your Investor Funding Pitch

After listening to hundreds of startup pitches, and reading even more business plans, most new venture investors develop their own favorite list of “red flags” that signal the beginning of the end of their interest. Others, like Guy Kawasaki, have irreverently called some of these “entrepreneur lies,” but I prefer to think of them as innocent enhancements or omissions that can kill your deal.

At any rate, here is my own list of red flags, from my years of experience advising and investing in aspiring entrepreneurs, which cause me to lose interest and start looking for a way out the door:

1. Omit the facts on key management team experience and skills. Don’t forget that investors look as much at the people as the idea. They expect to hear about founders and team member’s prior experience in building a startup, and knowledge in the relevant solution domain. Not highlighting people is as deadly as not highlighting the solution.

2. Lead with your intent to offer the solution free to customers. Of course, customers love free, but investors hate it. They know it’s especially hard to provide a financial return with a free business model. It takes a huge upfront investment to attract users, before advertisers are interested. Facebook spent over $100 million to kickstart the process.

3. Emphasize their social commitment, but never mention profit. Even non-profits need money to scale, but their pitch should be to philanthropists, not equity investors. Many companies, including Patagonia and Zappos, have used their social focus to enhance their business, but highlight financial return when talking to investors.

4. Terms “paradigm shift” or “disruptive technology” used more than once. These terms are so overused as hype that any meaning has been lost. In reality, fundamental changes in technology frighten away more customers than they attract, and take longer and more money to come to fruition than any investors wants to commit. Skip the hype.

5. Target market sizing higher than $10 billion. It’s true that investors like large markets, preferably in the billion dollar range and growing, but sizing a startup market greater than the GNP of many countries is just not credible. Every startup needs focus, due to limited resources, so setting irrational goals implies overall poor business acumen.

6. Sales projections are less than one percent market penetration. First, no investor is interested in a startup that sets their sights so low. Secondly, this projection usually comes with an assertion that everyone on the planet needs this, so less than one percent in five years is still a huge number. Entrepreneurs in this category are usually dreamers.

7. Claims of no competitors or hundreds of competitors. Investors are wary of crowded markets, and untapped markets. Usually “no competitors” means there is no market for your solution, or you haven’t bothered to look. None of these cases are credible. I recommend a focus on the top three competitors, or top three competitor groupings.

8. Spends time denigrating key competitors. Smart entrepreneurs highlight their own positives in competitive positioning, rather than competitor negatives. “Competitor X solutions are too expensive and too slow” should be “My solution provides double the performance at half the price.” Investors fear negative vibes will infect the business.

9. Touts “first-mover advantage” as the primary barrier to entry. Investors read this as an excuse for no real intellectual property or innovation. When a big company is a first-mover, they have the resources to hold their lead, but when a startup shows real traction, they can be easily overrun by competitors with more money. Sleeping giants do wake up.

10. Proclaims gross margin assumptions less than 50 percent. Many naïve startup founders believe that they can make good money with low margins. This may work for a year or two, until you grow to need employees with benefits, facilities, and more complex processes. Investors assume that even if you survive, returns to them will be unlikely.

11. Declare a $10 million valuation with no revenue or customers. Equity investors are buying a chunk of your company at today’s value, not what you think it may be worth in five years. The average valuation for Angel investments is about $2.5 million, so early numbers in that range may be negotiable. Higher numbers cause investors to walk away.

12. Annual revenue projections exceed $100 million before fifth year. Revenue projections should never exceed rational business growth constraints, or they defy credibility. Even Google, one of the most successful recent companies, only achieved $85 million in their fifth year. Numbers above this threshold will not attract investors.

13. Use the term “conservative” multiple times in their pitch. Investors are not looking for conservative entrepreneurs. They expect aggressive projections (not crazy) on opportunities, volumes, and revenue. Investors know that entrepreneurs with a conservative mindset usually fail to meet even their under-stated numbers.

Remember, you only get one chance for a great first impression with investors, so don’t let any of these red flags destroy yours. I highly recommend that you screen your business plan and your executive presentation carefully for variations on any of these themes, and remove them. Your credibility is paramount, so don’t jeopardize it with hype and too much passion. Your future depends on it.

Marty Zwilling

*** First published on Inc.com on 11/03/2016 ***

Proper Staffing is Key to Effective Global Expansion

By Ernst Gemassmer, Chairman, Startup Professionals

Some time ago you needed to achieve success and size before venturing into international markets. However, international customers have found you through social media, US trade shows and technical papers. In order to manage international growth your company needs to be directly involved in international expansion rather than relying on distribution partners. In this article I would like to share with you recommendations for staffing, based on my personal long-term hands-on experience in this arena.

1. The head of international must be experienced in building international businesses and must operate from corporate headquarters. It is both costly and in many instances complicated to enter foreign markets. Mistakes can delay market entry, result in fines or certainly delay establishment of a local presence. Thus, it is essential to appoint a ‘head of international’ with significant hands-on experience to chart your course in the global world.

   In my own experience, a significant amount of time was spent in explaining and obtaining approval from corporate staff for the actions required in building international. In many instances recommendations involve up front costs with no guarantee of precisely when specific revenues can be achieved. It is therefore essential that the head of international reside at corporate headquarters.

2. Do not delegate selection of candidates to headhunters/search firms. Finding, selecting, and appointing the right individual to head up in country or even regional roles is critical. Mistakes can be costly. In my experience it is essential for the head of international to clearly define his needs, hire a professional to locate individuals and perform the initial screening.

   However, final selection of key international managers must be made by the head of international, in close cooperation with corporate management. Despite the costs involved, inviting the finalists to headquarters is essential.

3. Thoroughly understand the specific laws relating to hiring and termination in each country where you plan to operate. Labor laws and prevailing practices differ in most countries. If you choose to operate in a specific country, you must meet local legal requirements and prevailing practices. Again the head of international will spend a significant amount of time explaining and justifying differences to his corporate colleagues.

4. Retain the services of a local (in country) law firm specialized in labor laws. Since labor laws differ so much from country to country it is essential to obtain advice from local labor counsel. Not following this advice can and will be costly. Special attention must be paid to the construction of an offer letter. In those cases where a termination becomes necessary, you should also obtain guidance and direction from a local labor attorney.

   In my personal experience the head of our Italian operation resigned and we accepted his resignation. He then chose to sue us claiming that his supervisor, based in Germany, created a difficult work environment. Our Italian labor counsel recommended settlement, instead of going to trial. The cost to us was nine months of pay.

5. Ensure that your pay practices for foreign employees are in line with local legislation and prevailing practices. Pay practices, commission and bonus plans need to be in line with prevailing local practices. If they are not, fines and difficulties with the local tax authorities can arise.

Having successfully staffed your international operations, you can now expand your markets greatly. However, remember to think long term, plan globally but act locally.

A successful head of international will spend time keeping updated on local conditions through participation in industry meetings, chamber of commerce memberships, as well as developing and maintaining corporate contacts. He is a broad-based general manager, has knowledge of most functional areas, is a diplomat and not just an international sales manager.

Don’t be afraid to venture into international markets. Most successful companies achieve over half of their revenues from markets outside the US.

Business Success Is All About Doing More In Less Time

Every entrepreneur I know feels the pressure of the thousands of things that need to get done, all seemingly at the same time. There is just not enough time! The real solution is better productivity and less procrastination, to put you back in control of your business. You need to spend more time every day on important things for the future, and less on the urgent issues of the moment.

I just finished the latest version of a great book on how to do this, “Work Less, Do More: The 7-Day Productivity Makeover,” by time management expert Dr. Jan Yager. After reviewing her day-by-day recommendations to improve productivity in a single week, I have extrapolated her guidance to ten productivity tips specifically for entrepreneurs to regain that competitive edge:

1. Focus on managing yourself rather than managing others. The key problem you need to solve is managing your distractions. These are the endless stream of email, phone calls, and daily crises which prevent really important accomplishments, like closing customers. Being a good role model is productive, but trying to control others is fruitless.

2. Tackle high value tasks first rather than the easiest. Pareto’s law says you get 80% of your results from 20% of your efforts. Figure out what deserves your 20%, and focus on that. Start each day with the highest priority task you need done that day, and leave the emails and phone calls till the end of the day, if you have time.

3. Take time to organize your work and integrate new tools. One of the top productivity killers is disorganization and wasting time finding key data. Take the time now to build a database of contacts, and structure your online filing system to include a total search capability. Find time to research and install the latest tools to expedite repetitive tasks.

4. Strive for business excellence, but reject perfectionism. In today’s market, no solution is perfect for everyone, so achieving perfection is unrealistic and unproductive. I recommend that entrepreneurs test the market with a minimum viable product (MVP), before burning resources on the ultimate solution, only to find the market has changed.

5. Fight procrastination and fear of failure. Fear of failure, or success, is at the root of most acts of procrastination. Psychologists assert that procrastinators actually sabotage themselves by postponing key activities. Incorporate your business today, register intellectual property, document partner equity agreements, and meet real customers.

6. Balance your work time by taking time off to rest. Rest makes you more productive. Get enough sleep so you can remain active throughout the day and evening. Schedule time off work with your family, sporting events, and sign up for community activities you enjoy. Non-stop presence in your business is less productive and toxic to your health.

7. Practice active listening to become more effective. Maximize your own productivity by listening more and talking less to your team and your customers. Let them tell you what they need and give it to them, rather than trying to tell them what they need. Do take the time to develop and communicate high-level business strategy and objectives.

8. Don’t be afraid to say ‘no’ to low-priority requests. Highly productive people make it a practice to under-commit and over-deliver. Productivity is perceived results per unit of time, and is not related to actual hours spent working, or working intensity. Startups require focus, so you need to say ‘no’ to many things, in order to do important things well.

9. Define clear goals and metrics for your productivity. If you don’t know where you are going, no amount of work will get you there. An entrepreneur’s ultimate task is to define success in term of results desired – number of customers, revenue, and profit. Without business goals and objectives, there is no productivity to measure, and no success.

10. Truly delegate responsibility and decisions. Delegation of tasks to others who can do the work better, faster, and cheaper is a huge productivity multiplier, if you truly remove yourself from the process. You must still maintain the communication relationship with all key constituents to measure results and make the decisions on strategy.

With these tips, you can indeed get more done every day, and get important things done in less time. The key is to get started today, with a goal of hitting all of these items in the first week, and in every week thereafter. You will quickly notice the change in your own productivity, and the team will follow your lead. Savor the satisfaction of success, and watch the stress melt away.

Marty Zwilling

*** First published on Inc.com on 10/31/2016 ***

How The IBM PC Made Me Appreciate Entrepreneurs

Way back in the early eighties, I was privileged to be part of the original IBM PC development team, led by Don Estridge. He was a great leader, and one of very few who have even been able to dent the barriers to real change in a large corporation. We struggled with the differences between intrapreneurship and entrepreneurship, and I learned much about both.

For example, even though we were leading an entrepreneurial effort within IBM, we found it a challenge to deal with the inbred mainframe culture, reverence for process, and accounting practices of a large company. Despite a valiant effort, we only briefly succeeded in putting IBM in the personal computer business, but our efforts changed my view of entrepreneurs forever.

We all watched as several strong-willed entrepreneurs of the day, including Steve Jobs, Bill Gates, and Ed Roberts, without constraints, really drove the industry and changed the face of computing. For IBM, the Personal Computer was a paradigm shift from their big business legacy, built with new technologies for totally new markets, and battleships turn very slowly.

I’ve often asked myself why intrapreneurs like Don Estridge and peers from CDC, Burroughs, UNIVAC, and Wang are not household names today. They had the huge financial and technical resources of a large company, and they had the right dreams, but they also had a set of challenges that most entrepreneurs don’t have to deal with:

1. Team members are not selected based on entrepreneurial acumen. Typically, team members must be sourced internally, with their performance and credentials based on prior corporate assignments and relationships. No consideration can be given to experience running a startup, breadth of skills, or even thinking like an entrepreneur.

2. Partnering with outside entrepreneurial efforts is discouraged. The culture of a large technology company is to rely on internal development or large, stable, and proven external vendors. Dependencies on entrepreneurial efforts, like Microsoft and Intel, were frowned upon, no matter how innovative or relevant. Every such deal was an exception.

3. Key operational and pivot decisions require corporate approval. Like startup investors several layers deep, parent company executives often demand approval rights and exert their power, without understanding the issues of starting a new business. Required pivots and budged changes are painfully slow and over-analyzed.

4. Compensation and support carried the corporate burden rate. The burn rate was extremely high, with no one working for equity or deferred compensation. Legally and culturally, benefits, facilities, and work schedules for intrapreneurs have little flexibility. The alternative of an early spin-off from the parent with no return path was unthinkable.

5. Measurements set on internal objectives, rather than market traction. In enterprises, performance objectives are usually tied to internal processes, rather than beating competitors, customer acquisition, and revenue growth. This approach, when applied to a new venture, often actually inhibits progress and market penetration.

6. A single-minded focus and commitment is hard to maintain. In a corporate world, a small effort like the IBM PC was just one of hundreds vying for attention and resources. It’s easy for top executives to get distracted by the latest challenges or new opportunities. Intrapreneurs have a double visibility and selling challenge, both internally and externally.

7. Corporate entities operate under strict competitive and accounting rules. For example, IBM was always under scrutiny for potentially impacting small competitors, equitable contracts, and meeting the reporting and disclosure standards for public companies. Internal legal reviews and required new processes were slow to finalize.

Even with these extra challenges, the IBM PC was developed and delivered in eighteen months – at that time faster than any other mixed hardware and software product in IBM’s history. This was done while breaking all the rules for using outside vendors, and publishing all the interface specifications for the first time, leading to a booming after-market for external entrepreneurs.

That experience helped me to understand the excitement, determination, and satisfaction of an entrepreneur, and it made me a better one when I later worked for and with several real startups back in Silicon Valley. But like most entrepreneurs, I’m still learning, and still anticipating the next round of technology and change. I still enjoy the journey as well as the destination.

Marty Zwilling

*** First published on Inc.com on 10/24/2016 ***

7 Accepted Startup Principles Violated By Steve Jobs

Steve Jobs was a one-in-a-million entrepreneur who seemed to violate many conventional rules of starting a business and dealing with people, yet undeniably achieved great success. According to various reasonably credible reports, including his authorized self-titled biography “Steve Jobs,” by Walter Isaacson, he often ignored customer input, berated team members, and misused key business relationships.

As a result, I don’t recommend to aspiring entrepreneurs that they try to emulate his style as a model for their first startup. I don’t proclaim to understand the genius of Steve Jobs, or how his unconventional approach led to success, but I do know some accepted startup principles that he seemed to go out of his way to violate:

1. Validate your vision with real customers. Steve Jobs once proclaimed, “It's really hard to design products by focus groups. A lot of times, people don't know what they want until you show it to them.” While this approach makes some sense for “paradigm shifts,” most new entrepreneurs can’t survive the high marketing costs, high risk, and long acceptance cycles of big changes. Even Steve Jobs struck out several times with this approach.

2. Nurture business relationships with key industry players. It is a good thing to have strong convictions, but not so smart to actually feud with potential partners. Steve Jobs battles with Bill Gates are legendary, as well as his breakup with John Scully and others. Most successful entrepreneurs learn from relationships without jeopardizing them.

3. Establish trust and communication with your team. Jobs was exceptionally hard on key member of his team, starting with Steve Wozniak. He was prone to emotional outbursts which caused team members to “walk on eggshells” around him, and often not share realities. Management by fear is not a recommended style for business success.

4. Define a solution within the realm of the possible. Bringing innovation and real change to the market does not mean demanding the impossible from your team. Jobs had the reputation of pushing people to “bend reality” through sheer mental force, and it sometimes worked. In my experience, most good teams break and fail under this assault.

5. Look for startup opportunities within your area of expertise. According to Steve Wozniak and others, Jobs did not understand technology and was not an engineer. Yet somehow he was able to drive great engineers to implement his vision of “insanely great products.” For better odds of success and funding, I recommend you chose a domain where your expertise can help you avoid the impossibilities.

6. Don’t hold out for perfection on the first iteration. Jobs’ passion for the perfect solution and the perfect product launch seemed to be the key to his long-term success, but caused him to miss release dates, cost targets, and even markets (with NeXT). For the rest of us, I recommend the minimum viable product (MVP) lean startup approach.

7. Don’t count on multiple failures catapulting you to success. Most entrepreneurs have learned to wear an initial failure like a badge of courage, highlighting what they have learned and destined not to make the same mistake twice. Yet they realize multiple high-visibility failures make it hard to find quality teams, partners, and investors. According to many counts, Steve Jobs suffered at least seven failures, but never lost his credibility, and is still remembered as one of the most successful entrepreneurs of this era.

At the same time, Steve Jobs was a strong advocate of other key startup principles for success, including creating insanely great experiences (not just products), following your heart to do what you love, and thinking differently to produce real innovation. He was also a master marketer who believed in selling dreams, not products.

The bottom line is that every entrepreneur is unique, and there is no magic formula for success in business. Thus the more you know about yourself, the market, and technology, the more likely you will be able to achieve success. Steve Jobs didn’t want to follow conventional principles, but he also didn’t believe in going into business with blinders on. That’s a model for all of us to follow.

Marty Zwilling

*** First published on Inc.com on 10/13/2016 ***

Join The Unicorn Club Of Billion-Dollar Companies

I’m sure all of you know one or more of the 200 or more young companies that are currently valued at one billion or more by investors and stockholders. These are popularly called “unicorns.” Some of the most well-known include Uber, Airbnb, Snapchat, Xiaomi, and Pinterest. What every entrepreneur is asking me these days, is “How do I get to be a unicorn?”

The first thing I have to remind everyone is that the odds are stacked against you, just like in a lottery. Based on some good estimates of how many new ventures have been started in the last five years, the statistical odds of any individual startup making it to this level are less than one in a million. But, of course, that doesn’t mean you shouldn’t try.

The fact is that valuations are largely set by top venture capital investors and financial firms, and they all have their own proprietary formulas for assigning value. But let me assure you that in the final analysis, the numbers and key elements are highly subjective. Yet there are a common set of driving factors that every entrepreneur should know, including the following:

1. Extraordinary marketplace traction. If your new venture is still in the idea or development stages, don’t even think about a high valuation. Premium ventures need real traction, such as 100 million users, 10 million in revenue, or brand recognition around the world. It helps to have a following of loyal advocates in the mainstream press.

2. Active interest by a multitude of investors. When top tier investors compete for a piece of the action, the price can go up exponentially. If you don’t yet have a hundred investors knocking on your door, it’s time to put more focus on viral marketing, closing customers, and exponential growth. Keep working on increasing the momentum.

3. Experienced team of superstars. Every investor bets on the jockey, more than the horse. It may be time to bring in a new executive team with visible integrity and a sterling track record, or round up some new advisors who have connections with the venture community. Don’t be afraid to give up equity to get a small share of a very large pot.

4. Opportunity and scalability are unlimited. The target market better be a big one, certainly over a billion dollars, with a double-digit growth rate, and large enough to absorb multiple entrants. Scalability in the worldwide arena must already be demonstrated, with plenty of growth potential ahead. Most unicorns pop up first in new solution categories.

5. Strong intellectual property and defensibility. Patents and other intellectual property are a necessary initial “barrier to entry,” but these are just the beginning. Additional defensibility elements that unicorn investors look for include speed of implementation, rate of revenue and user growth, and exceptional team strength and leadership.

6. Credible yet flexible exit strategy. The number of new ventures that successfully navigate the path to a public offering (IPO) with big numbers is still small. The smartest ventures are always courting a multi-billion dollar sale or merger with giants in the industry, including Google (YouTube), Microsoft (Skype), and Facebook (WhatsApp).

But remember, things that go up fast can also come down just as fast. More and more pundits are predicting that the unicorn bubble has grown through hype beyond sustainable value, and will soon collapse. They point to the valuation implosion of former superstars Groupon, Dropbox, and Zynga, which have dropped to valuations that are a fraction of their once lofty numbers.

In addition, achieving unicorn status brings a new set of challenges to a young growth company. The pressure is always on to take more money, to drive the valuation higher and stay in the spotlight, just at the point where a company begins to make money rather than burn through it. Too much money often leads to bad decisions, and has led to the demise of more than one promising growth venture.

But, I’m not suggesting that you take the focus off of valuation. The numbers may be relative, but the principles behind them won’t change, and work for smaller startups as well as unicorns. My advice is to aim high, but be realistic in negotiating with investors.

Unrealistic valuation expectations are one the key reasons that investors walk away from a promising startup, leaving you with no valuation, and perhaps no future. You have to earn a billion-dollar valuation, not declare it. How well does your new company stack-up today?

Marty Zwilling

*** First published on Inc.com on 09/29/2016 ***

Some Business People Talk While Smarter Ones Listen

As a business advisor, I certainly recognize the need for talking to make an investment case, close a sale, or communicate with your team. I also recognize the need for active listening. The challenge is to know when it’s time to switch from one to the other. You can’t learn anything new while you’re talking, yet many business professionals and entrepreneurs seem to never stop.

It’s a sad spiral, since the longer you talk to someone without stopping to listen, the less both of you really hear, meaning they don’t learn anything and you weren’t listening, so you have to spend even more time talking to get the message across. Here are some guidelines for the most productive interchanges with business associates, investors, and customers:

1. Limit your statements and answers to sixty seconds or less. Long business responses are usually read as attempts to dominate the conversation, or cover basic weaknesses in your argument. Shorter verbal exchanges help the conversation to flow smoothly, and lead to win-win relationships, rather than debates with a winner and loser.

2. Listen attentively to responses, and do not interrupt. Practice active listening to the speaker, instead of looking the other way, or formulating a defensive rebuttal. People who maintain eye contact while listening are more like to gain the speaker’s trust, and may actually learn something from the response, leading to effective results.

3. Lead your response with a thoughtful pause. This pause will convince the speaker that you have heard and processed their input, and gives them an additional incentive to actively listen in turn to your response. The result is greater awareness and impact on both sides, resulting in real learning and the most productive business exchange.

4. Don’t hesitate to ask questions for clarification. Asking a follow-on question demonstrates that you are really listening and care about the speaker’s view. Questions also are effective in narrowing the focus of the discussion, and more quickly resolving the issue or completing the communication. Asking good questions improves productivity.

5. Use part of your talking time to summarize what you have heard. This always improves your credibility as a speaker, since it convinces people you are also a listener, and confirms your progress in understanding the message. The result will be a better use of your time and theirs, and a more effective learning process on both sides.

6. When speaking to an individual, address them by name if possible. This gets their attention and focus, and builds trust and respect for you as an authoritative speaker. The next step is to use personal analogies and familiar terminology to get even higher attention, comprehension, and impact. This will help you get more done in less time.

7. Choose the right environment and mode of communication. The concept of talking too much is equally applicable to non-verbal discussions, including texting and email. No business person likes long and rambling electronic messages, and in many cases these are ineffective, as they lack body language and the ability to adapt to mood.

8. Practice the connect, convey, and convince strategy. Every speaker’s challenge is to get people’s attention quickly, succinctly convey the desired message, and move the listener to action. Talking more only confuses the issues, causes people to disconnect, and invites a defensive reaction. Listen for key points, and think before responding.

In business, if you find yourself talking more than listening, it may be time to tune your skills in both. Responsible, effective communication will give you a sustainable competitive advantage over both your peers and your competitors, by allowing you to get more done in less time. Time is a critical resource in these rapidly changing times. Don’t waste it repeating your message ad nauseam.

Marty Zwilling

*** First published on Inc.com on 09/27/2016 ***

A Paperboy Explains The Keys To Success In Business

Creating a new business is not rocket science. Whether you are starting a paper route, or commercializing a complex technology, the same basic principles of success apply. I found this illustrated well in a new book I just finished, “A Paperboy’s Fable,” by a young entrepreneur and writer Deep Patel. It doesn’t take a superior intellect or big credentials to succeed in business.

Although just seventeen years old, Patel has some great insights that I can extrapolate for every aspiring entrepreneur to answer the most common question I get as an advisor and mentor – “Where do I start?” I’m convinced that anyone who really practices the principles outlined in his book not only will have no trouble starting, but also will have a higher probability of success:

1. Search for big opportunities. Most founders know exactly what they want to sell, and they are personally convinced that everyone will buy one. Yet you should realize that your view is likely biased, so outside industry expert data is needed for validation. Selling something that only a few people need, even newspapers, is not conducive to success.

2. Invest in your own future success. It takes time, effort, and other resources to start a business. Be prepared to learn some new skills, assemble the right team, and make some sacrifices to get things going. Aspiring entrepreneurs who expect outside funding, reduced work hours, and friends to volunteer, will likely find a hard road ahead.

3. Harness ingenuity and innovation. Nothing worth doing hasn’t been tried before, so winning requires bringing something new to the table. Newspapers can be delivered sooner or more accurately, or technology can be innovatively packaged or personalized.

4. Don’t forget the marketing. “If we build it, they will come” is not a winning business strategy. You need to find the customers, rather than waiting for them to find you. With social media and conventional selling, the people with the best message get the order.

5. Add value and reduce cost for universal appeal. Addressing a worthy cause, such as helping the environment, has a good secondary appeal, but near-term value delivery is usually necessary for business sustainability. Goodness alone doesn’t make a business.

6. Create customer advocates. Every business needs multipliers to succeed, and one of the best is customers who are so excited and satisfied that they drag in friends. Paper routes succeed best when customers recommend you to neighbors and associates.

7. Choose a business that you can scale. Services businesses are hard to grow, as you need to clone people to expand. Product businesses are easier to scale, through manufacturing and automation. Don’t be too slow to expand your territory and partners.

8. Utilize the power of diversification. The author didn’t forget that newspaper customers make good candidates for lawn services and cleaning products. Even huge businesses, like Facebook, have expanded into dating, through Tinder, and games, with Angry Birds.

9. Hire more expertise and delegate authority. No matter how dedicated, one person can only do so much, while making every decision. Smart entrepreneurs learn quickly to hire people who can operate independently, utilizing the existing brand, and make 1+1=3.

10. Don’t box yourself in with your brand. Brand for the future. It’s hard to expand “Ty’s Newspaper Business” into landscaping and home products. It’s always expensive to change and rebuild a brand image. Give yourself the maximum flexibility in brand building and naming.

Following these principles, and practicing incremental and continuous learning, are the best ways to prepare for the life you want as an entrepreneur or business professional. Also, before you can decide where to start, you need to define what success means to you.

Success to you probably includes financial gain, but don’t forget that money doesn’t buy lasting satisfaction and happiness. The happiest business people don’t work for money, and don’t even think of what they do as work.

Marty Zwilling

*** First published on Inc.com on 09/22/2016 ***