Friday, July 29, 2016

8 Initiatives To Increase Your Business Growth Curve

pets-com-sock-puppetA common pain of startups after an exhilarating first surge of early adopters is a long and frustrating plateau of slow growth, where it seems like nothing you do will get your business to profitability. Too many entrepreneurs don’t know what to do at this point, largely accounting for that disappointing 50 percent of startups that fail in the first five years, according to Gallup.

Some make big mistakes, such as Webvan expanding too fast with a huge infrastructure, and Pets.com, trying to grow the business with a negative margin, under the mistaken assumption that winning customers is more important than making a profit. Others do far too little, assuming the viral effect and word-of-mouth will soon kick in, and sales will suddenly grow exponentially.

In any case, it’s no fun to be stuck in this stage, struggling to make payroll, and dealing with impatient creditors and unhappy investors. First you need to take consolation from the fact that you are not alone, and more importantly you need to implement an active growth and marketing plan to include the following initiatives:

  1. Ramp-up visibility and strategic alliances. It’s easy to get so pre-occupied with handling the business rollout that you forget to maintain and increase your social media interactions, search engine optimization efforts, and highlighting positive customer reviews on your website. Continually add new marketing and distribution partners.

  2. Real growth always requires real marketing. Word-of-mouth and social media may get you started, but there is no substitute these days for special promotions, webinars, presence at trade shows, and actively calling on decision makers. There is no magic lever for growth, so several initiatives are required, with metrics to assess value returned.

  3. Ask every employee to focus on sales. This starts with multiple messages from the top that growth is now the highest job priority, and key to survival. Openly reward employees who make the extra effort, champion cost-cutting issues, and enhance the sales process. Ask everyone to be an advocate of the business to their friends and connections.

  4. Personally optimize every cash flow transaction. Resist the urge to delegate accounting decisions, under the assumption that incoming revenue takes the pressure off. Now is the time to take advantage of volume discounts and deferred payment plans. Many entrepreneurs forget that the growth phase may be your tightest squeeze on cash.

  5. Increase the pipeline and the conversion rate. Now is the time to formalize lead-generation efforts, and initiate efforts to maximize the conversion rate to sales closure. Real growth requires new and innovative ways to find customers, as well as old-fashioned advertising and email blasts. Shorten the close cycle to grow faster.

  6. Introduce automation consistent with growth rates. Manual processes and people are always the most expensive to scale, so every process needs metrics to determine when automation is appropriate. Some startups hire more people to delay automation, or spend money wildly on new tools for the future. Both are strategies for business failure.

  7. Introduce new products and enhancements every month. One of your best sources of growth is existing customers, who are always looking for more opportunities to buy, and new offerings. Capitalize on competitor weaknesses that you can fill with minimal new investment. Actively listen to customer feedback, and don’t be a one-trick pony.

  8. Aggressively enter new markets and sales channels. If your local market isn’t giving you the growth you expected, it may be time to expedite your expansion to new major cities or export opportunities. If your website isn’t pulling in the growth you need, expand to Amazon and other channels. Growth requires market innovation as well as product.

An entrepreneur who has struggled to fund and build a dream solution may think they can relax when the first wave of customers come in. Unfortunately, the challenges of scaling a business, and making it profitable, often last longer than the product development phase. The good news is these challenges are not rocket science, so anyone can do it. Don’t give up your dream too early.

Marty Zwilling

*** First published on Forbes on 07/22/2016 ***

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Monday, July 25, 2016

8 Entrepreneur Challenges Founders Don’t Anticipate

Jeff_Bezos'_iconic_laughEvery new entrepreneur who has not spent years in corporate life has the advantage of an unbiased look at business opportunities, but at the same time has the disadvantage of missing critical business experiences that can cost them dearly in their first startup venture. In my experience, building a successful business is more difficult than building an innovative solution.

Fortunately, despite their lack of basic business experience, the destined-to-be-great entrepreneurs never give up, following Bill Gates after his first failure with Traf-O-Data, and Jeff Bezos after early failure with his online auction site. All too many others are so discouraged or financially destroyed by their business learning experiences that they never try again.

Fortunately, I’ve had the opportunity to work and learn for many years in both the corporate environment (IBM), as well as the exploding Silicon Valley startup environment of the 90’s. As an advisor to many startups since that time, here is my list of key business growth challenges that every first-time entrepreneur may not anticipate:

  1. It takes relationships to make a business work. An innovative solution is necessary but not sufficient to build a business. Businesses require people relationships, to find the right team, investors, contract vendors, and attract customers. As an introvert and a techy, I know well the challenges of building relationships in today’s competitive world.

  2. Startups don’t come with formal training courses. New entrepreneurs quickly find that what they learned in business school is no substitute for real-world business experience and training. Larger enterprises let you learn as you go, with minimal risk, and they pay for leadership training, employee management, and new project management tools.

  3. A successful business is a long-term effort. Entrepreneurs are an optimistic and passionate group, who normally expect their idea to go viral soon, and success to follow shortly thereafter. They aren’t mentally prepared for the long-term grind, with repeated tough challenges along the way. It’s a 24/7 job with no time off for vacation or fun.

  4. Managing personal finances separate from the business. Being an entrepreneur is a lifestyle, making it hard to isolate the startup finances from family financial stability and future retirement requirements. Startups don’t come with pension, health, or 401(k) plans included. Startup setbacks can easily cost you your house and credit rating.

  5. Building a startup is more about love than money. People with experience in big businesses have learned that you won’t be happy even if well paid, unless you enjoy the job. Entrepreneurs who love to invent new things, but hate business, need to find the right partners before embarking down the path to a new business.

  6. Not having a predictable income is an ongoing source of stress. People don’t appreciate a regular paycheck until they don’t have one. Entrepreneurs never know when they will be hit by technology advances, new competitors, economic downturns, or loss of a major customer. Early funding is a full-time effort, and it’s no fun for anyone.

  7. Entrepreneurs can be lonely at the top. Once you have formally established a startup with you as the CEO, all former teammates will see you in a different light as the boss. Quickly, it will be difficult to get unbiased input, and everyone will wait for you to make the final decisions. It’s hard to find someone to share your fears and challenges with.

  8. Peer perceptions of entrepreneurs are not always positive. It’s popular today as a young entrepreneur to talk about your dreams and initiatives, and everyone seems to look up to someone running their own business. Later, colleagues with jobs in large corporations may look down on you as a person without job security or a clear career.

In all cases, I recommend to aspiring entrepreneurs that they spend some time first working for another startup, or in a corporate environment, if they aren’t absolutely certain about their lifestyle preferences. Life is too short to spend most of it in stress and pain, handling challenges you never anticipated, even if you are convinced that you can change the world.

 

Marty Zwilling    

 

*** First published on Forbes on 07/18/2016 ***

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Friday, July 22, 2016

7 Steps To Turning Business-As-Usual Into A Moonshot

Dragon_capsule_and_SpaceXIn this era of accelerating change, business-as-usual is the enemy of every business, new and old. Yet it’s an easy rut to fall into, and a tough one to break out of. Every business needs to “reach for the stars” on a regular basis, in much the same way the President Kennedy challenged a nation to put a man on the moon in an impossible timeframe more than fifty years ago.

Moonshots are simply efforts that demand breakthroughs that are not possible within business-as-usual practices. In reality, that’s the definition of a successful startup these days, so every aspiring entrepreneur should take note, as well as every existing corporate executive. Elon Musk has done it with SpaceX and Tesla, and Steve Jobs did it on a regular basis at Apple.

The challenge is to do it by design like these guys, rather than by exception. I found some good guidance on the required steps in a new book, “The Moonshot Effect: Disrupting Business as Usual,” by Lisa Goldman and Kate Purmal, a couple of consultants who have made it happen. I like their seven step approach, which I have paraphrased here for entrepreneurs as follows:

  1. Pull together a great multi-functional team. Entrepreneurs who prefer to work alone have a hard road ahead. Every moonshot starts with a team of six to eight people, rock stars in their own area, excellent collaboration skills, highly motivated, high energy, and willing to take on challenges. It takes the right people to make a breakthrough happen.

  2. Clearly define and issue the challenge. A dream is not enough. You need to quantify measurable criteria for success, using business metrics. These could include customer penetration, revenue growth, budget guidelines, and industry visibility. For buy-in and commitment, ask for team proposals in a specific timeframe to start the process.

  3. Select the best proposal and announce intent. Visible leadership and commitment is a pre-requisite to real breakthroughs. This is the time to create organizational structure, leader assignments, budget constraints, and timeframe milestones. The breakthrough plan has to be communicated effectively to all constituents.

  4. Validate and quantify the business case. Team members begin by working with industry experts, advisors, and customers to validate assumptions, implementation plans, and financial parameters. If possible, the team should be assigned to a dedicated physical space and set up a “war room” for regular strategy and progress meetings.

  5. Finalize commitment to the plan at all levels. It’s time for the executive team and advisory board to commit the necessary funds and people resources to complete the plan. For startups, this will likely require a funding effort with friends and family, or grants. Patents and other intellectual property must be secured at this point.

  6. Move into full project execution mode. Effective progress requires a detailed project plan, milestones, resource assignments, metrics, and status meetings on a regular schedule. In a startup, the entrepreneur is the executive champion to prevent day-to-day pressures from distracting members of the team.

  7. Announce and launch an operational product. Initial rollout may be a public beta or minimum viable product which demonstrates the solution and tests the market on a limited basis. Even if there is more work to do, it’s time to celebrate the launch both internally and externally to build momentum and commitment.

While these steps may sound familiar to many entrepreneurs, I find the necessary discipline is often missing. Business-as-usual in a startup means everyone is working hard on the latest crisis, but no one knows the status or potential impact of the overall plan. In more mature companies, business-as-usual is a focus on existing products, with only an incidental focus on new initiatives.

In any case, it’s smart to use the moonshot analogy today to disrupt your business or startup from the business-as-usual malady. The world is moving faster and faster, so you need to shoot higher to keep from falling behind. In addition, you will like the exhilaration and satisfaction that comes with a successful moonshot. It’s the best way to change the world and leave a legacy to remember.

Marty Zwilling

*** First published on Forbes on 07/15/2016 ***

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Monday, July 18, 2016

10 Indications You Would Make A Great Entrepreneur

stars-entrepreneurAs a startup advisor and investor, I’ve met many aspiring entrepreneurs, and I often get asked the question, “I have a great idea for a startup – do you agree that it real potential?” They don’t know that most experts agree the person is more important than the idea, yet I’ve never been asked, “I have a great idea for a startup – do you agree that I have real potential as an entrepreneur?”

Nevertheless, I’ve given a good bit of thought to some questions I might ask, or you should ask yourself, to get some indication of whether you have the right stuff to succeed and be happy in the entrepreneur lifestyle. Here are ten sample questions that I believe will reveal positive indications of your potential as an entrepreneur, and also indicate that you will select good ideas:

  1. You see creating a business as a fun challenge. Many techies and inventors I know hate the thought of running a business – their fun and challenge comes from creating the innovative solution. For these, I recommend that they find a partner first who is willing and able to run a business. “If we build it, they will come” is not a viable startup strategy.

  2. You tend to ask for forgiveness rather than ask for permission. This attitude indicates that you are comfortable making decisions, and ready to be your own boss - a major prerequisite for succeeding in any entrepreneurial endeavor. Of course, you do need to consider how often that strategy has worked for you, and how often it backfired.

  3. Making big money excites you, but is not your major driver. If you are dreaming of an opportunity to get rich quick, the entrepreneur route is not for you. Most great founders lived on Ramen noodles, without taking a salary, for longer than they like to remember. For them, money is a positive indicator of success, but not an end in itself.

  4. You relish the opportunity to set your own goals and targets. Real entrepreneurs are self-motivated, and hate to be driven by someone else’s deadlines and priorities. Arbitrary rewards, like salary bonuses or vacation perks, seem to just get in the way of achieving really great results. The fun is in the journey, as well as the destination.

  5. You treasure your breadth of interests, rather than your depth. To build a startup, you have to enjoy the broad range of challenges, from technical to marketing to sales to personnel. Big corporations need specialists, which is why most entrepreneurs move on to start their next business when their first startup gets too large.

  6. You enjoy building relationships as well as products. A startup is no place for the Lone Ranger. An entrepreneur has to be as adept at building a team, finding the right external partners, and finding customers, as building the solution. At the very least, you need to nurture a trusting relationship with a complementary partner to get things going.

  7. The perks of a big title and corner office are not important to you. Most startup founders are happy to work out of their garage or home office, where they can dress comfortably, have no set schedule, and interact easily with family and friends. With the Internet and easy global communication, title and offices are not competitive advantages.

  8. You see yourself as more of a do-er than a dreamer. People who pride themselves as the “idea” person most often fail as the lead entrepreneur. Startups are rarely at a loss for ideas, but always need a good problem solver to tackle the latest challenge. Businesses are all about implementation, production, and processes, rather than dreams.

  9. You usually keep your cool, even in tough situations. Entrepreneurs need to be passionate without being too emotional. The realities of starting a business are not all under your control, and partners and competitors with don’t always play fair. Your team and customers need to see you as a stable leader, not an unpredictable tyrant.

  10. Not afraid to actively listen as well as talk. Good entrepreneurs have an ego, but they are able to keep it in check. Selling your idea or product requires an understanding of the view of others, and the willingness to change based on customer feedback. Even the most famous entrepreneurs, such as Bill Gates, has a trusted advisor like Warren Buffett.

If you recognize yourself positively in most of these characterizations, then I recommend the entrepreneur lifestyle for you. There is no better time, with the cost of entry being at an all-time low, and the public image of an entrepreneur at an all-time high. Startup investors and customers alike are waiting to line up behind you. And I’m already sure your idea has great potential.

Marty Zwilling

*** First published on Forbes on 07/11/2016 ***

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Wednesday, July 13, 2016

Think Like An Entrepreneur For Business Longevity

jim_dewald2Every new venture that survives the first five years starts to drift away from their entrepreneurial thinking, and assumes they have achieved the path to longevity. In fact, even within Fortune 100 companies, almost 90 percent have encountered growth stalls or flirted with failure, or worse, in the last 50 years. No company can afford to lose the agility, flexibility, and innovation of a startup.

Examples of great companies that have achieved longevity, by initiating major changes, include American Express (originally express mail), IBM (tabulating and computer hardware), and J.P. Morgan (chemical manufacturing). Others, including Eastman Kodak (film and cameras), Pullman Company (railroads), and RCA Victor (radio) never kept up with change and are gone forever.

The many ways that great firms can slip away from entrepreneurial thinking were highlighted in a new book, “Achieving Longevity,” by Jim Dewald, based on his own experiences as a corporate executive, entrepreneur, and Dean of the Haskayne School of Business. Here are a few of the key challenges he outlines that I have seen as well:

  1. Competitors are easier to quantify than new opportunities. Competitor statistics are the domain of analysts, financiers, and shareholders, so naturally it is attractive for companies to focus on them primarily. Undefined opportunities which may be built from innovation are the stuff of dreams and passion, relegated only to entrepreneurial thinking.

  2. Companies follow each other rather than the market. Change is hard. Businesses firmly ensconced down an existing path find it hard to leave their comfort zone or jeopardize current revenue streams, and tend to prioritize the value of incremental change, even in the face of new markets, technology, or economic conditions.

  3. The future is extrapolated from internal data analysis. Metrics and observations while running the existing business become the primary basis for future projections. This data reinforces what they already know and believe, so a divergent path rarely looks attractive. The result is a self-fulfilling prophecy that often leads to disaster.

  4. Efficiency focus strips away resources from innovation. Through cost-cutting and highly-specialized hiring, firms unintentionally weed out the capacity to innovate and adapt to change. The drive for resource-based advantage can be profitable for big companies, but it is always temporary, never permanent.

  5. Penalties for management learning experiences. In an entrepreneurial venture, errors are expected, and even celebrated when positioned as learning opportunities. In stable corporate ventures, mistakes are seen as a signs of incompetence, and penalized by loss of bonuses or position. As a result, undefined new opportunities are deemed too risky.

  6. Focus on data-driven leadership versus passion. Strong creative views or even arrogance in new realms by entrepreneurs is expected and often revered, as was the case with Steve Jobs at Apple. In corporate boardrooms, a show of hubris or emotion is deeply troubling, and can end careers. Logic and data-driven leadership is the norm.

  7. Intolerance for pivots and failed experiments. Every startup I know has pivoted at least once, and expects failed experiments to lead them to the true market. In corporate environments the cost in time and dollars of a pivot or failed experiment can be huge, like turning a large battleship. Stakeholders and board members alike react very negatively.

What is most ironic is that the inverse of many of these challenges is critical to success in the first five years of a new venture – focus on competitors, generating internal data and analysis, emphasizing data-driven leadership, and creating standardized repeatable processes. Many see these activities as the elimination of entrepreneurial thinking, for stability and endurance.

My message is that the pendulum has to swing in concert with the market and the economy, as well as the maturity of the company. Today’s market is extremely volatile, where unprecedented change is the norm, and entrepreneurial thinking is the only way to assure longevity. Maybe it’s time to take a hard look at the balance in your own mindset and your business.

Marty Zwilling

*** First published on Forbes on 07/06/2016 ***

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Monday, July 11, 2016

Beware Of New Challenges With Services Relationships

sharing-economySelling services has always been about relationships, but the challenges of building relationships with services clients have exploded. Customers today extrapolate their relationships not only from personal contact, but from every aspect of their interface with your company, including web site and social media interactions, access to peer reviews, as well as the actual services experience.

In addition, as every business becomes instantly global via the Internet, it’s virtually impossible for you to touch every customer personally. Thus services experiences and relationships tend to be based more and more on new media and technology. Customers today may actually feel a personal relationship, or an unsatisfying one, without ever interacting with you or your team.

I saw these modern challenges and some positive guidance summarized in a new book, “Service Excellence,” by Ruth N. Bolton, a distinguished Marketing Educator Award winner at the W.P. Carey School of Business. I agree with her focus on six challenging characteristics, both old and new, of every services business:
  1. Intangibility of a customer experience with services. Customer services experiences can’t be seen, felt, tasted, or touched in the same way that people interact with tangible goods. Services experiences are different for each client, so it’s important to customize experiences and timing per customer. If your business doesn’t offer personalized services, don’t expect good relationships.

  2. Relationships are a function of customer culture. For consistency and efficiency, services companies have traditionally minimized personalization. Yet today, people of every culture worldwide expect every relationship to relate to their unique perspective. Companies need service strategies that increase spontaneity to enhance experiences.

  3. Experiences are more visible to other customers. In some cases, such as in a hair salon, services are delivered in view of other customers who may be impacted by your experience. In all cases, experience details are quickly and easily communicated to others via Facebook or Yelp, meaning a relationship will impact many others very quickly.

  4. Services experiences cannot be inventoried. Service organizations must find effective ways to manage capacity and thereby match the supply and timeliness of services with customers’ usage of them. It is very important for service companies to use and market peak load pricing, seasonal, and customer scheduling without impacting relationships.

  5. Infusing technology within the customer experience. Customers now expect services to be more technology-enabled, such as online banking, parcel tracking, transportation on demand, and smart home security. The overall experience and relationship derived are more and more set by the technology interaction, rather than personal interaction.

  6. New media shapes and reflects the customer experience. Unlike traditional media, which is not interactive, social media provides for and customers expect targeted, personalized, and socially responsible communications. These become a key part of your engagement and relationship, and also define community and demographic associations.
The rise of the “sharing economy” has sparked intense interest in services that allow people to co-produce the service in new ways, such as Airbnb for accommodation and Uber for transportation services. Thus your relationship needs to consider ways that customers can participate through spontaneous and discretionary contributions to your services, with variations for each market segment.

It’s time for all services organizations to take a future-oriented view of customer experience and relationships, rather than the traditional retrospective view. Services are no longer a simple people-to-people business. Relationships and experiences are now driven more and more by interactive media and smart technology. If your services business isn’t innovating with the market, it’s falling behind.

Marty Zwilling

*** First published on Forbes on 07/04/2016 ***

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Friday, July 8, 2016

7 Common Staffing Mistakes That Doom Many Businesses

job-interviewBusiness success is all about having the best team, yet the average entrepreneur has little prior experience with hiring people and building top-notch teams. It’s no wonder that half of startups fail in the first five years, and an even smaller percentage ever see a return for their years of effort. Most new entrepreneurs assume their passion will attract and motivate the right team members.

In reality, motivation and passion are necessary but not sufficient to build a business. Higher motivation does not overcome role mismatches, poor communication, or culture differences. Hiring in any new venture needs to be a structured and high priority task, not the ad hoc informal process I see in many startups that are struggling to grow:

  1. Crisis mode hiring rather than planned team growth. Hiring requirements must be anticipated and implemented with the same precision and tracking as manufacturing volumes, sales leads, and customer service. Crisis mode hires too often get done without due consideration for strategic fit, training requirements, and cultural considerations.

  2. Hiring before organizational structure is defined. The requirements of the desired organization need to be formalized before people are hired. Hiring good people without a strategy and structure invites inefficiency, low morale, and chaos. My recommendation is to hire core executives, and have them define, justify, and build their organizations.

  3. Utilizing unprofessional sources for candidates. Trying to save costs by seeking resumes on the Internet will result in poor quality candidates, more time required for screening and interviews, and high turnover. I’m not suggesting executive search firms for every startup position, but national recruiting organizations will get better results.

  4. Poorly defined and executed hiring process. The best candidates quickly figure out that companies that don’t respond, demonstrate chaos during interviews, or keep delaying a decision are not a good opportunity. Less qualified prospects don’t have alternatives, so they tolerate the frustration, but may return the favor as an employee.

  5. Don’t bother with previous employment follow-ups. Some candidates can talk a great story, but have trouble delivering, or may have team relationship challenges. Your gut-feelings are important, but need to be validated by normal background and reference checks. Candidates with few credentials on paper may be your best growth candidates.

  6. Quick to hire and slow to fire. We all make staffing mistakes, so it’s most important to quickly fix them, before the morale of the whole team is impacted, or your business loses some key customers. I recommend a thirty to ninety-day trial period, defined in writing, where either party can terminate the relationship without recourse. Assigning and measuring early milestones is a must.

  7. Failure to include company culture in the hiring criteria. Every company and team develops a unique culture of work flexibility, personality, and communication that must be matched to every new hire, independent of job qualifications. Thus every serious candidate should be vetted and approved by peers, as well as company executives.

Making the right staffing decisions, and doing it efficiently on a timely basis, is critical to getting entrepreneurs and their startups to the next level. A great team can turn even a mediocre strategy and solution into a successful business. On the other hand, even the best solutions and ideas will fail as a business, if excellence in execution is lacking.

Entrepreneurs who can’t find the time to focus on hiring until it’s a crisis are doing themselves and their business a disservice. Making late or poor choices will cost you time, money, customers, and may cost you your business. You need the very best to maintain a competitive edge, and get the satisfaction you want for you and your team members. It won’t happen by default.

Marty Zwilling

*** First published on Forbes on 07/02/2016 ***

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Wednesday, July 6, 2016

7 Keys To Signing Business Advisors That Add Value

John_Elkington_advisorIn my role as an angel investor to startups, I’m struck by the broad variety of advisor strategies I see in investor presentations and business plans that cross my desk. Some entrepreneurs are “lone rangers,” never mentioning any outside guidance, while others tout dozens of advisors. In my experience, both of these approaches will likely have minimal value for your venture.

Few entrepreneurs, no matter what their background, have the breadth of experience and expertise to face all the challenges of a new startup without relying on some guidance from an engaged and committed advisor. Even the best of us needs someone we trust to bounce ideas off, or challenge our perspective on a regular basis. That’s the function of a good advisory board.

Thus I believe every smart investor, potential partner, or critical new hire will look for a properly built advisory board as a key criteria before selection or making a commitment. In my experience, the key parameters for building that winning advisory board should include the following:

  1. Select people who fill gaps in your own team. If your startup team is highly technical, an advisory board member with a strong financial and business background clearly adds value. In other cases, an advisor with strong customer, distributor, or celebrity status might be important. A long list of friends or associates is usually considered a negative.

  2. Keep the advisory board to a manageable size. Communication and organization is always a challenge, so three advisors is about the maximum that any entrepreneur can handle. If you have more, they better be major investors or partners who will likely be part of your formal Board of Directors at a later stage. Advisors in name-only will hurt you.

  3. Compensate advisors for their time and commitment. While it’s possible to have reciprocal agreements or friends willing to seriously engage, most often you get what you pay for. A common stipend might be one percent of your stock, or a few thousand dollars annually to cover expenses. Don’t expect valuable and busy people to work for free.

  4. Establish advisory board agreements to set expectations. As you add a member to your advisory board, you should give them an agreement in writing on what is expected in terms of time, responsibilities and term of office. This will assure no surprises on either side on role responsibilities, confidentiality, level of availability, or decision authority.

  5. Budget your time and effort to effectively work with advisors. One of the biggest mistakes I see is an entrepreneur who only communicates with advisors in a crisis (too little, too late). Recognize that it takes a minimum of a couple of hours a week to meet with the right advisor, and communicate status to all, in addition to more hours up front.

  6. Schedule and prepare for regular advisory board meetings. In addition to individual advisor meetings, you should schedule a meeting of all advisors each quarter. This should be structured and run as a formal Board of Directors meeting, including major milestone achievements and plans, as well as strategy and issues discussions.

  7. Don’t be hesitant to add or subtract members as your needs change. As your startup grows into a business, you may hire a CFO to replace your financial advisor, and find you need an advisor in new customer segments. A good advisory board gently evolves into a formal Board of Directors without upheavals or changes in direction.

Advisory boards that exist in name only, or have non-committed members, can actually have a negative value to the entrepreneur, by elongating decision times and providing poor quality guidance to the business. This often leads to a death spiral for the board, and subsequently for the startup. Thus the negative implications go far beyond the difficulty in attracting investors.

Smart investors believe that a top quality team is more important to success than any given startup idea. An engaged advisory board is an inexpensive way to add power to your team where and when you need it most. For long-term success, make it happen, and highlight it in every pitch and business plan you produce. There’s no better way to use your precious time and resources.

Marty Zwilling

*** First published on Forbes on 06/29/2016 ***

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Friday, July 1, 2016

You Need A Motivated Startup Team To Change The World

zappos-office-signI was shocked to read an old Gallup study that indicates only 13 percent of employees worldwide are actively engaged at work, and more recent data shows only a small change in the right direction. In my own experience as a startup advisor and mentor, I find that entrepreneurs who can’t attract and maintain a highly motivated team rarely even get off the ground.

Thus if you want to change the world with your new business, you need to follow the example of startups like Zappos, which hires according to cultural fit first. Another example is Facebook, maintaining motivation with food, stock options, collaborative office space, an on-site laundry, and a competitive atmosphere that fosters personal growth and learning with great benefits.

These companies, and many others, are finding that strong leadership and personally-tuned benefits are the key to long-term satisfaction and motivation, certainly more effective than high salaries and financial incentives alone. Here is my personal list of the key practices that I recommend to every entrepreneur and business executive alike for motivating their team:

  1. Bring passion and positive vibes to the workplace every day. Nobody likes a downer, especially for a boss. Every team member is motivated by being able to absorb energy from others, rather than being sucked dry by their own leaders. As a startup founder or executive, you need to subvert your own troubles for the sake of the team.

  2. Fuel a reserve of positive energy outside of work. First of all, that means taking care of your health, getting enough sleep, and regular exercise. Find ways to recharge your emotional batteries, through supportive relationships and community activities. Team members need to see you at work, but they also need to know you have a life after work.

  3. All work and no play creates a de-motivated team. Fun is always motivational, and it’s not inconsistent with work. There are many ways to add levity to a tough challenge, and engaging the team occasionally in some fun activities will work wonders for your team’s productivity and motivation. Don’t take yourself too seriously as well.

  4. Always treat your team as your highest priority. Investors have long agreed that you invest in the team, more than the product. Yet many managers unintentionally de-motivate their team by being too busy with business challenges to communicate, understand, or help people. Good hiring, training, and mentoring are the best motivators.

  5. Practice every day what you preach. Everyone is a role model for the people around them, and everyone needs a role model. Your team members follow your actions on integrity and follow-through, much more than any written company policy. Your display of pride in the company and respect for the customer will translate directly into motivation.

  6. Consistently ask for and implement ways to improve engagement. Building morale is not a one-time task. It requires ongoing listening to team members, implementing and tuning new incentives over time. Examples include work time flexibility, transportation assistance, exercise opportunities at work, and rewards for setting the right example.

  7. Provide timely personalized feedback and incentives. Everyone needs to be treated like an individual, rather than just another soldier. Tie incentives to measurable personal goals, as well company achievements. In today’s fast moving world, the time frame for giving recognition keeps getting smaller. Positive feedback has a diminishing half-life.

I believe that increasing your team’s motivation will be more effective than providing new and advanced tools for increasing productivity. The Hay Group, a global management and consulting firm, found offices with motivated and engaged employees were 44 percent more productive than the others. Other sources see the potential as high as doubling productivity through motivation.

So if your mission is to change the world, a great idea may be necessary, but is not sufficient. Your parallel challenge is to build and lead a highly motivated and engaged team that can execute with you, and can effectively motivate your customers to the same level. If you can do it, motivation can easily be your biggest competitive advantage. Start today.

Marty Zwilling

*** First published on Forbes on 06/18/2016 ***

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