8 Good CFO Attributes That Every Entrepreneur Needs

The job of chief financial officer (CFO) may sound like a nightmare assignment to technical entrepreneurs, but the tasks and skills required are key to every new venture. In addition, if you are already a CFO, this position is a great springboard to the chief operating officer (COO) or even the CEO position in the startup, based on recent reports. Investors love to see a former CFO running a new business.

Twitter and GrubHub are just a couple of examples where CFOs have been asked to absorb COO responsibilities in the last couple of years. In the case of GrubHub’s Adam DeWitt, he ended up with a salary exceeding that of the CEO. Here are some key attributes normally associated with the CFO position that will maximize your value now and in the future.

1. Every startup role requires managing to financial realities. In a corporate environment, you can leave financials to someone else, but not in a startup. Every team member, from engineer to CEO, lives or dies based on cash flow, so the more they can tune their activities to revenue and expenses, the more valuable they become.

2. Finding creative ways to fund activities. While the CFO usually takes the lead in finding professional investors, everyone needs to look for ways to reduce the burn rate and maximize alternative funding sources, including bartering for services, finding partners willing to accept deferred payments and talking to friends and family.

3. Creating operational processes and procedures. As startups grow from development organizations to a sustainable and repeatable business, processes must be documented, employees hired and trained and customer-support organizations built. The best entrepreneurs take the initiative on these rather than wait for a CFO to drive them.

4. Be a trustworthy advisor and mentor to others. The fastest way to win a leadership position in a new company is to communicate value from your insights to other team members and executives. Don’t count on the CFO or CEO to be the source of all knowledge and direction in your business. Leadership is earned rather than appointed.

5. Communicate the range of your talents. A good CFO has to be able and willing to tackle many challenges outside the financial realm, usually including creating legal documents, evaluating and signing vendor contracts and even human resources activities. With the advent of the Internet, you too can show expertise in any discipline.

6. Capitalize on your past industry experience. As a CFO brings real value from previous financial experience and training, every entrepreneur should work to highlight previous industry or technical activities and relate them to the task at hand. Great entrepreneurs are adept at applying things learned to a current context from a previous one.

7. Demonstrate your passion, commitment and work ethic. Investors know that the startup road is long and challenging. Thus, they look across the team of entrepreneurs for the ones who show confidence, resilience and dedication to efforts at hand. They expect to find it in all C-level executives but are always looking for the next executive team.

8. Able to focus on strategic issues and long-term outlook. Aspiring entrepreneurs seeking to position themselves as C-level executives must do more than perform day-to-day jobs well. They must immerse themselves in strategic and financial issues, just like a CFO. They also must sharpen leadership, collaboration and communication skills.

As you may conclude, the job of a good startup CFO is a hands-on role, focused not only on financials but also on the myriad of operational and strategic issues. Thus, every entrepreneur can benefit from demonstrating the same attributes, leading from financial sensitivity. If your preferred career path includes running your own startup, it pays to pay attention to your CFO.

Marty Zwilling

*** First published on Entrepreneur.com on 03/18/2016 ***

How To Get New Customers By Targeting New Markets

Many entrepreneurs assume that everyone will love their solution as much as they do, so they tune their marketing focus based on their own needs and wants. That’s the right place to start, but real growth and scale requires attracting customers who are not like you. Expanding your market into these areas requires thinking outside your personal box.

For example, Starbucks found initial success with professionals aged 25 to 40 in urban areas and with moderately high income but later looked to a new market of millennials who wanted a place to sit and chat, study or work. More dramatically, both Facebook and YouTube started out focusing on people dating but expanded their focus when they found dating was giving them limited growth.

To make the step outside your target market, here are some key initiatives I recommend for every company seeking new sources of growth.

1. Update your technology to reach new customer segments. Today’s customers want to be mobile and location sensitive. Make sure you website is mobile-friendly, totally user-friendly, includes a blog and provides for customers review and feedback. Include mobile-app support and new social-media channels. Word-of-mouth is an inadequate strategy.

2. Incorporate social consciousness into your message. Make sure your marketing focus incorporates the greater good of society and culture sensitivities. Make your offering part of improving customer lifestyle rather than just solving a problem. Do the same for your employees to get a new level of commitment, creativity and loyalty.

3. Immerse yourself in customer domains you are missing today. Talk to industry advisors and industry experts to identify customer sets you are not getting. Use social media and personal discussions to isolate their interests and needs. Identify your built-in biases and define compensating development and marketing strategies.

4. Extend your solution features to meet new interests. It may be small feature extensions, packaging and distribution that can make your solutions attractive and more competitive for new market segments. Pay particular attention to customer values and wants as well as needs. This step validates the efforts to reach out to new customers.

5. Overhaul the buying and service experience. New customers are looking for the best buying and support experience as well as the best product. They are looking for online reviews and social-media recommendations from their friends. They are also looking for employees who are motivated and empowered to go the extra mile to build unforgettable experiences.

6. Test drive marketing programs outside of your comfort zone. I’m talking about highly targeted efforts on specific demographics with pre-defined metrics, not the “spray and pray” -- spray your message broadly and hope it sticks somewhere -- approach. This “narrowcasting” approach allows you to penetrate and understand a new audience.

7. Fortify your online brand reputation. Proactively increase interactive communication to your core market to reduce negative comments and reviews. Protecting a brand reputation requires more positive reviews earlier to offset the occasional negative one. Responding to all feedback from reviews is required online and all social-media channels.

Like Starbucks, an obvious place to explore is generational segments outside your core focus. You personally can’t be experienced in all five of the core segments – matures, boomers, gen-X (40s), millennials (20s), gen-Z (tween). Each has different interests, spending habits and priorities. After you have mastered the first one, broaden carefully.

I recognize that the conventional wisdom you hear from business advisors and investors is focus, focus, focus on a targeted market segment. While I agree this strategy is key to getting your startup funded and off the ground, when you see sales starting to plateau, it’s time to pivot from that strategy per the initiatives outlined here. Change is the only constant in businesses that survive and prosper.

Marty Zwilling

*** First published on Entrepreneur.com on 03/16/2016 ***

5 Attributes Of People Who Will Grow Your Business

A question I often get asked as an advisor to startups is how to recognize and attract the best people to grow the business. The reality is that entrepreneurs usually don’t have the money or time for executive recruiters to do the filtering and selection for them. If your primary source of candidates is friends, family and Craigslist, is it possible to get any high-quality team members?

In my experience, these sources are viable, but the process with them requires even more effort and time, and you have to know what to look for. First, you need to carefully define and advertise your requirements in terms as specific as possible to your startup. Next comes the more arduous process of reviewing every applicant, looking for key attributes including the following.

1. Good communication skills. On a business team, the ability to communicate verbally and in writing is more important than technical depth. Thus, applicants who have poorly written resumes or verbally communicate poorly should be filtered out, no matter what the skills. For new businesses, communication inside and outside the company is critical.

2. Motivation and commitment to results. The most effective and productive team members are positive, driven and want to be measured by results rather than hear work hours, perks or stock options. Look for indications of these attributes in the resume and phone interviews. If you see and hear a focus on past job descriptions, skip to the next.

3. Personal character and chemistry. You can find the smartest and most experienced person in world, but if he or she isn’t trustworthy or unable to work with you, you have a liability -- not an asset. Honesty and belief in the same values as the culture you are trying to build are keys to a happy team and a successful business.

4. Willing and able to collaborate. Today’s business world generates too much data and changes too rapidly for any single individual to be effective alone. Teamwork inside the company and interacting with customers and partners outside the company are mandatory activities. Find evidence that new candidates have collaborated successfully.

5. Already possesses key skills required. It’s tempting to believe that friends, family or eager newcomers can learn quickly with your coaching and training, but entrepreneurs often don’t realize that coaching new employees will double the leader’s workload at the worst possible time and will leave a critical position not fully filled for many months.

Recognizing the right attributes is actually the easy part. The hard part is finding the time and diligently following a process to attract people who are a good fit for your requirements, evaluating them against key attributes and other candidates, negotiating and closing the deal and integrating them into your organization. Here are the key process steps I recommend

• Create a one-page job description on the position you want to fill.
• Get it reviewed and approved by peers, including salary and perks.
• Communicate job opening via your web site, craigslist and personal emails.
• Filter all digital responses to a list of the top-five candidates through phone screening.
• Conduct on-site interviews for each of the top-five with you and at least two peers.
• Compare rankings, reference check and prepare an offer for the selected candidate.
• Follow-up personally with the candidate to close the deal.
• Iterate as required, until the position is filled.
• Provide required team integration, training and ongoing coaching.

I suspect that many of you will see these process steps as intuitively obvious, and yet I find them rarely followed by new entrepreneurs. As a business advisor, I regularly hear excuses such as, “My first candidate was so great, I hired her on the spot,” “I was so busy that I had to delegate the hiring to another team member,” or “I hired a bright intern who agreed to a salary I could afford.”

Attracting, evaluation and hiring direct reports is a task that should never be delegated. There is no more important task than making your team and your business successful. You can’t build a business alone, and the right people are always as important as the right funding. If you haven’t yet focused on attracting and managing the right people, it’s still too early to look for funding.

Marty Zwilling

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

A Five-Minute Tutorial On How To Value Your Startup

As an entrepreneur looking for professional investors, one of the quickest ways to lose credibility and get rejected is to start with a ridiculously high pre-money valuation. I see it happen often in my angel investment group, and you can see it happen almost every week on the Shark Tank TV show. It’s like trying to sell a home still being built at next year’s dream market price.

Equally bad is professing no valuation estimate at all, asking investors to “make me an offer.” You look like a chump, and probably won’t like their low-ball response. Investors know that valuations at startup early stages are negotiable, but they do expect that smart entrepreneurs understand the top three elements of a startup valuation would include the following.

1. First priority is real revenue, customers and contracts. If you have a proven business model with some sales, it’s credible to apply a multiplier of five to 10 times this number for the first element of valuation. Thus, $100,000 of gross revenue in the last 12 months might be extrapolated to $500,000 to $1 million in valuation. Future revenue projections are not relevant at the pre-revenue stage.

2. Team strength and experience is value. If the founder and team members have built a previous startup in a related business domain, that fact may add up to an additional $1 million in valuation for your startup. Investors will look to see how many employees are full-time and paid, versus week-enders or volunteers. Connections to industry experts and channels are another positive to highlight.

3. Registered intellectual property adds value. Patents filed, even provisional, as well as trademarks, copyrights and trade secrets count as barriers to entry and sustainable competitive advantages. A rule of thumb used by investors is that real intellectual property can justify an additional $1 million in valuation.

According to the Angel Capital Association (ACA) blog, the average startup valuation for new ventures receiving angel investments has been around $2.7 million. I think you can see how the three elements listed above can be used to justify a valuation in that range for your startup. Of course, there are several additional elements which may be relevant, and should be considered to increase the valuation:

• Your startup owns physical assets with significant market value. Most new ventures have not yet acquired test equipment, buildings or other expensive items that could be resold or would be hard to replace. Take a hard look around and add valuation for anything you find in this category.

• Value of solution work to date which cannot be replicated easily. If you have a finished solution that would cost anyone a million dollars to reproduce, it makes sense to include that in your valuation. Investors usually discount these claims, since they know you had a learning curve and potentially several throw-away iterations.

• Factor in rapid growth and large future revenue projections. Using discounted cash flow (DCF) on future projections only makes sense if you can show you are already making revenues on the curve of your projections. This factor is more relevant to venture capital investors who come in at a later stage and expect more traction to qualify.

• Get premium for billion-dollar markets with double-digit growth rates. If your target market segment is very large and growing, an additional goodwill factor of a million dollars may be justified. It also helps to show that you have a big lead on competitors, there are very few alternatives at this point, and the barriers to entry are very high.

• Relate your startup to similar startups funded with a higher valuation. The concept of "comparables" applies to your startup, just like it does when you sell your house. If you can compare your startup favorably to another one recently funded down the street, it’s highly likely that you can get a similar valuation, no matter what the size.

As you can see, the valuation of an early-stage startup is not rocket science. The calculations of investment in mature businesses, including earnings multipliers, financial ratios and inventory analysis do not apply. Investors are not looking for precision but do expect you to understand the basics. You don’t want to be accused of giving away the company or find your dream dying due to grandiose expectations that can’t be met before your startup runs out of money.

Marty Zwilling

*** First published on Entrepreneur.com on 03/09/2016 ***

How Well Versed Are You In Startup Investor Jargon?

Whether you are talking to peers, competitors or investors, you as an active entrepreneur will be judged on your familiarity with today’s startup and funding jargon. I’m not recommending that you saturate your discussions with lingo, but responding with a blank stare once-too-often won’t convince anyone that you can build the next world-changing business or outpace the market.

In that context, I offer you my latest collection of popular investor-to-entrepreneur terms and concepts. See how many of these you have personally encountered or feel confident that you can confidently discuss with investors -- or even explain to friends and family.

1. Unicorn. This term is currently applied to recent startups who profess a current valuation which exceeds $1 billion. Prime examples include Uber, Airbnb and Snapchat. People are even talking about “decacorns" -- investable companies with net worth now exceeding $10 billion -- like Dropbox and Pinterest. Could your startup be the next one?

2. Frothy startup valuations. Overvalued stocks have been called "frothy’" for some time, but now the term is being tossed around in lieu of the word "bubble" in the new world of perceived overvalued startups. It implies runaway investor speculation on future values, fear of missing out on trends, and it leads to unicorns. Frothy is good for entrepreneurs.

3. Seed-round investment. This term refers to an initial venture-capital investment, often wrongly sought to seed early product development. In fact, most often, it is limited to seeding a startup business rollout or scale-up after development is completed from friends and family. A seed round is intended to be followed by a bigger Series A round.

4. Super-angel investors (micro-VCs). These terms refer to a class of professional investors who invest their own money, like angels, but have the larger resources and scope of venture capitalists with other people’s money. Ron Conway, of SV Angels, and Reid Hoffman, LinkedIn's founder, are names often mentioned in this category.

5. Deep-dive meeting. After viewing your slide deck, if investors are still interested in your startup, they will ask for a deep-dive meeting to drill in on any hard questions before commencing due diligence. Although the term may sound negative, it’s actually a very positive sign. Expect your skills, insights and motivation to be tested -- so be prepared.

6. Sweat equity. Startup founders typically invest some real dollars into their new startup as well as months or years of their time with no salary. This unpaid work component is sized in dollars, added to any funds contributed, to represent the total contribution of a founding partner and converted to an equity ownership percentage in a new startup.

7. Equity crowdfunding. Hundreds of crowdfunding sites claim to help you get funding for your startup in the form of a donation, pre-order or a token reward. But recent changes in the law, associated with the JOBS Act of 2012, have made it possible to sell small chunks of ownership or equity to non-accredited investors -- regular people on the Internet.

8. Ramen-profitable. When a startup proclaims that it is cash-flow positive but pays no salary yet to the founders, investors call this Ramen-profitable. It implies that founders are living on inexpensive Ramen noodles and barely covering living expenses in order to re-invest all returns back into the business. It’s a term of respect and endearment.

9. “Growth-hacking” marketing. This term is used to describe non-traditional ways to incent growth such as social-media and viral marketing. These alternatives are used in lieu of traditional media such as radio, newspaper and television. Growth hackers are the marketing equivalent of clever software hackers and are highly respected by investors.

10. “Acquihire” a startup. Sometimes investors are very impressed with the skills and expertise of a startup team but are not so impressed with the business potential of the current idea. They may decide to acquire the startup in order to hire the team for another project in their portfolio. These deals usually come with retention packages -- so be careful.

Just for fun, I’ve come up with a scoring system on my own non-scientific survey to help you rate yourself on your level of startup investment acumen. How many of the terms defined above have you personally used in a conversation or explained in the context of your startup?

• 8 to 10: Excellent startup investment savvy
• 5 to 7: Average, but watch out for investment sharks
• 2 to 4: Newbie entrepreneur, in real need of an angel
• 0 or 1: Stick to bootstrapping for your startup

The world of investing in startups has shed much of its mystery over the past few years and now extends well beyond the arcane science of a few venture capitalists to the world of accredited angel investors and more recently to regular people through crowdfunding. The new entrepreneurial age is here, but you can’t be competitive if you don’t speak the language.

Marty Zwilling

*** First published on Entrepreneur.com on 03/04/2016 ***

6 Business Essentials To Keep Your Startup Thriving

I’ve noticed a great tendency among startup founders to ignore the essentials of business accounting in the early stages of their startup. Just because you are not profitable yet, doesn’t mean you can skip the record keeping.

In fact, just the opposite is true. When you anticipate losses for the first year or two, it is more important to properly document all expenses, including tricky ones like business travel, business meals, and your home office. Sloppy documentation and reporting of these expenses is an open invitation to an IRS audit, which is the last thing you need or can afford during the busy startup period.

Expense accounting is just one of the key record-keeping requirements for a successful business:

1. Expenses and income. You'll need a check register, a cash receipt system, and a record of bills. Also you should include tax records, bank statements, cancelled checks, bank reconciliations, notices from and to your bank, deposit slips, and any loan-related documents. Keep good backups of all computer files.

2. Invoicing and payments. You can’t make any money unless you bill your customers on a timely basis, and follow-up regularly on missed payment commitments. If your average receivables period exceeds 45 days, your cash requirements go up fast. I recommend one of the many cloud-based and low-cost tools to help, such as the Viewpost business network.

3. Corporate records. Include here articles of incorporation, bylaws, shareholder minutes, board minutes, state filings, stock ledger, copies of stock certificates, options and warrants, and copies of all securities law filings. In all cases, don’t forget permits, licenses, or registration forms required to operate the business under federal, state or local laws.

4. Contracts. All the contracts you have, even expired ones, should be saved indefinitely. These would include equipment leases, joint venture agreements, real estate leases, and work-for-hire agreements. It is also good to keep correspondence sent and received by mail, faxes, and important e-mail that you might want in hard copy.

5. Employee records. Include here completed employment applications, employee offer letters, employee handbooks or policies, employment agreements, performance appraisals, employee attendance records, employee termination letters, W-2s, and any settlement agreements with terminated employees.

6. Intellectual property records. This is an especially important category. Make sure you file a copy of all trademark applications, copyright filings, patent filings and patents, licenses, and confidentiality or nondisclosure agreements.

Of course, these days you need a personal computer or laptop dedicated to your business with some basic software tools. You should investigate the wide variety of software systems that are on the market, and pick one you makes you comfortable, since you will probably be doing the basic data entry yourself. This not only will save you money, but it will keep you intimately aware of all expenses and the condition of your overall business. In my experience, the most common small business accounting system I see in startups is QuickBooks Pro by Intuit.

Even if you have the money to hire an accountant, you should keep a grip on your business financial affairs. You should be able to explain to yourself how much money you owe out to others, how much others owe you, and how much cash you have on hand. Don’t be shy about investigating local classes as adult education, or even a seminar with the SBA on bookkeeping.

An accountant may not be necessary, but you still can’t skip the tools. You can't walk in with a bag full of receipts. The more organized you are, the more organized you will be when presenting this material to an accountant. That translates to reduced bills from the accountant, and a reduced tax bill from the IRS. You will save time and money, and be more confident about your status.

Good record-keeping practices are required to comply with tax laws, and to operate your business properly. When you incorporate your business is the right time to establish the records system. Don’t let your dream get killed by ignoring business basics.

Marty Zwilling

Disclosure: This blog entry was sponsored by Viewpost but the views expressed here are solely mine.

8 Ways To Get Off The Ground With Angel Investors

Angel investors are still the lifeblood of early-stage startups, despite the surge of activity in crowdfunding and an increasing early interest from venture capitalists. According to the Angel Capital Association, at least 300,000 people have made angel investments in the last two years, totaling $24 billion in the U.S. alone. These are all accredited investors who risk their own money.

As an active angel investor myself, I understand how the process works, and I see the disappointment in the eyes of entrepreneurs who approach angel groups for funding and often get turned away for not being timely or prepared in the minds of potential investors. In the interest of getting you off on the right foot, here is my priority list of recommended preparation activities.

1. Come with a product built and a proven business model. Contrary to a popular myth, angels don’t fund dreams. They expect to see at least a prototype solution, funded from your own resources, or friends and family or a grant. Angels are most interested to help you scale the business, once you have real customer traction and ready to break out.

2. Assemble a team with the requisite expertise and experience. It takes more than one person, no matter how passionate, to grow an investible business. A business needs technical, marketing, financial and many other skills. If you are an inventor, for example, you need to line up the business side of your team before angels will be interested.

3. Create and highlight your intellectual property portfolio. If your solution and brand are really new and innovative, you need to protect them with a patent, trademark or trade secret. These are required to show that you have a defensible competitive advantage or at least a barrier to entry. Investors are not interested in “me too” businesses.

4. Prepare an executive summary and investor presentation. Angel investors expect to review a short executive summary before booking time to hear an investor presentation or taking the time to analyze a full business plan. Remember that angel investors are buying equity in your business, so they are not impressed with a customer presentation.

5. Have a full business plan and financial model to close the deal. These may not be required, but they will help convince an investor that you have a real plan to execute and understand the variables that affect every business. The business plan should address all key questions, including valuation, funding needed, use of funds and exit strategy.

6. Formalize the business structure before asking for funding. The excuse of waiting to incorporate to see what investors prefer will get you passed over quickly. Most viable startups are set up as C-corporations or Limited Liability Corporations, either of which can be done quickly and cheaply by the entrepreneur. Simplicity is preferred at this stage.

7. Highlight existing presence on the Internet and social media. In today’s world, if your startup is not visible on the Internet, you haven’t started yet. Startups in stealth mode can’t get feedback from real customers and can’t be perceived as experts in their industry. In addition, your company and social media names are key intellectual property.

8. Build a relationship with one or more investors before asking for money. Asking angel groups for money before knowing anyone in the group is not recommended. Investors are people too, and they expect new entrepreneurs to be visible in industry conferences, talks with peer investors as advisors or simply exploring investor interests.

Doing all these things won’t guarantee you an angel investor, but it will put you in the top few percent of startups seriously considered. Don’t be one of the 90 percent of startups now passed over quickly. Also, later when you need a larger round of venture capital, the same preparation will serve you just as well, so you might as well learn now how to fly with the angels.

Marty Zwilling

*** First published on Entrepreneur.com on 03/02/2016 ***

7 Ways To Keep Your Focus On Execution After The Idea

Every startup begins with an idea, but from that point forward, it’s all about execution. Founders soon learn that customers only spend real money for solutions rather than ideas. Investors have also learned not to invest in ideas but only in entrepreneurs and teams who can deliver solutions. Success requires moving your passion quickly from the idea to the business implementation.

A good execution requires a plan and the right people, combined to create operational excellence and exceptional customer value. Companies that do this best become market leaders. Google, for example, was not the first Internet search provider (think Yahoo!, AltaVista, InfoSeek and others), but according to Investopedia, Google was the first to really monetize search.

As a result, Google has become a verb, and the company is a tech giant with record growth rates and a revenue of $74.5 billion in 2015. But Google is not unique. Many other companies have followed a similar set of execution principles which I believe are required for business success, no matter how great the idea:

1. Tune the business model to optimize value for all constituents. Smart entrepreneurs architect a value chain that includes customers, partners and vendors, based on market dynamics. They then drive innovations and solutions to feed that value chain. A growth model without monetization for key players is not a long-term success strategy.

2. Plan for pivots as improvements based on results. If every plan adjustment is a reaction to a crisis, you won’t take corrective action quickly enough and will never find new opportunities. Continuous improvement applies to the business model as well as the product. Set business goals and milestones, and use metrics to track performance.

3. Enable team members to run the business as their own. Every team member needs the motivation, training and authority to make day-to-day decisions without review and approval. That means milestones have to be documented, measured and desired results rewarded. The whole team is required to deliver a winning customer experience.

4. Two-way communication at all levels is always top priority. People who don’t know what is expected of them can’t do the job. Customers won’t be happy if you and your team don't listen to feedback and expectations. Strong leaders realize that effective communication becomes exponentially more difficult as the number of players increases.

5. It’s hard to improve results that you don’t measure. In operationally excellent businesses, productivity and results are measured at every step in the value chain, not just at the end. Targets are benchmarked against competitors, customer reviews and industry expert expectations. Merely keeping up with previous results is falling behind.

6. Define at least one worst-case scenario and recovery plan. Proactively engaging the team in building a plan-B is the only way to assure a timely response to key challenges. A passionate commitment to an idea alone will not carry the business over downturns in the economy, market evolution or customer trend changes. A great business must be agile.

7. Optimize team efforts with the latest technology and tools. In this era of rapid technology advancement, an open mind must be the norm in leveraging the latest tools and process architectures. This means regular team training and update sessions, bringing in outside experts, and working with partners and vendors on win-win deals.

Business excellence is a convergence of technology and business elements to maximize customer value as well as company and partner returns. This convergence is not a one-time effort, but an iterative review and improvement mentality that has to be drilled into the team and built into every process and measurement. It has to start with the entrepreneurs at the top.

Google, with founders Larry Page and Sergey Brin leading the charge, demonstrated a technical leadership combined with the foresight to bring in business help, including Eric Schmidt and others, to optimize the business execution focus. Are you sure your startup is moving beyond the idea stage, with the execution principles outline here, to assure long-term business success?

Marty Zwilling

*** First published on Entrepreneur.com on 02/26/2016 ***

10 Startup Mistakes You Can't Afford To Make Again

The good news is that everyone expects entrepreneurs to make mistakes, since founders explore uncharted territory. In fact, investors recognize that founders usually learn more from mistakes than from success, so a well-explained startup failure can improve their odds of funding the next time around. However, investors do expect you know the common pitfalls -- and not repeat them.

As an active angel investor and startup advisor, I’ve seen many of the same stumbling blocks repeated all too many times. As a result, repeating any of the following 10 mistakes outlined here won’t get you any credit for intelligence and learning and will cost you dearly in your funding credibility and real cash.

1. Assume you already know what your customers need and want. Just because you love a new solution doesn’t mean your customers will love it. Before spending any money, make sure you interact directly with potential customers, industry experts and investors. Be prepared to pivot at least once before you get it right, even with this input.

2. Confidently believe that you have no real competitors. Usually, no competitors means no market -- or it means you haven’t looked. If the market is new and competition is minimal, then the time and costs of educating potential customers probably exceeds your survival time and budget. Innovation in the face of a few competitors is much less risky.

3. Try to solve all the world’s problems with a first solution. A startup needs focus to do one job well or risk the alternative of solving many problems poorly. It’s tempting to tell everyone about all the future potential uses of your new technology and risk confusing them, having them wait for your future or disappoint them with several poor solutions.

4. Forecast revenue growth that defies business principles. Every business takes time to scale and penetrate a market due to organizational growth, hiring, training, brand building and customer adoption. Forecasts that exceed 10 percent of a large opportunity in the first five years rarely happen and will likely disappoint you and your investors.

5. Dismiss the need to register any intellectual property. Some entrepreneurs believe that being first to market will keep them ahead of competitors. They forget that big companies with many more resources do wake up when they see your traction and can easily overrun your efforts. You need patents and trademarks as a barrier to entry.

6. Count totally on friends and family to run the business. Every startup business is a new challenge and needs real dedication, experience and skills to survive. Friends and family may tell you what you want to hear rather than what you need to hear. Personal relationships and emotions have broken many businesses -- so be careful.

7. Delegate cash-flow projections and transactions. Entrepreneurs who under-estimate cash requirements or focus on product development while someone else pays the bills are doomed to fail over and over again. Smart founders always build a buffer into their estimates, find a strong financial advisor and personally sign every check.

8. Hire helpers in lieu of people who are smarter than you. When you need help as your startup grows, many entrepreneurs are quick to hire less expensive and more available helpers rather than finding the real skills and experience to complement their weakness. Hire people who can train you rather than ones you need to train. Hire slow and fire fast.

9. Build the company at the expense of employees. Being too aloof or busy to lead and communicate goals and status to the team is a sure way to reduce motivation, morale and productivity and set the wrong culture. A startup with happy and highly motivated employees will provide a better customer experience resulting in viral customer growth.

10. Try to build a business without specific milestones or a plan. Building a business is much more complex than building a house, and I don’t see any houses winning awards that were built without a documented design and plan. The plan should not be put together for investors but to map the workload and desired results to you and your team.

So, as you contemplate your next startup, it will be worth your effort to go the extra mile to avoid these 10 mistakes. Doing so may well save you the time and cost of a startup failure and also will save you from the embarrassing admission the next time around that you don’t pay attention to the advice and counsel of people who have been there before you. That doesn’t bode well for your ability to manage funding or your likelihood of success the second time around.

Marty Zwilling

*** First published on Entrepreneur.com on 02/24/2016 ***