Monday, November 27, 2017

7 Rules For Innovations That Produce Dominant Players

Boy_wearing_Oculus_Rift_HMDInnovation doesn’t always make you a winner in business. In my role as an angel investor in startups, almost every pitch I see highlights some real innovation in technology, business model, or market opportunity. Yet only a few of these get funded, and even fewer become dominant players in their chosen space. The rest fail quickly, or struggle for years to get real traction.

But don’t get me wrong. Innovation is necessary to get you into the game, but even a disruptive technology won’t assure you business success. These days, it’s all about harnessing your innovation to get an advantage in a business. Or as Steven S. Hoffman asserts in his new book, you have to “Make Elephants Fly,” and that requires getting outside of conventional thinking.

Hoffman should know, as an icon in the Silicon Valley, having educated and trained hundreds of startup founders as the CEO of “Founders Space,” designated by Inc.com as one of the top ten incubators and accelerators in the world. I like his list of Seven Unfair Advantages, at least one of which is required to make you a dominant player in your space, which he calls radical innovation:

  1. Offer a solution that is exponentially better than any other. If it’s not an order of magnitude better or cheaper, customers usually conclude that the risk and cost of change are simply not worth the potential payback over what they have today. You may attract early adopters, who love everything new, but the mainstream market will be elusive.

  2. Create an entirely new market space or new category. If your product or service is so unique and compelling that it’s able to define a whole new category, then you are the winner by default. This isn’t easy to do, but it happens. Just look at Nest, who is leading the IoT wave, and Oculus Rift, the company that put virtual reality on the map.

  3. Be the first to disrupt an existing market space. Being first is always important. It’s amazing how many proposals I see that are “me too” with only slight or abstract differentiation from other social media sites, ride sharing, or collaboration tools. Examples of being first include Netflix for movies and TV and Redfin for real estate.

  4. Ride the network effect to more users than anyone. The network effect is where the value of your business increases exponentially as your user count goes up. Look at competition for the numbers to beat, but in the consumer space, it usually takes millions to be the dominant player. Users can be advertisers, consumers, sellers, or passengers.

  5. Establish exclusivity as a high barrier to entry. Prove exclusivity with whatever methods and relationships you can use, including patents, distribution channels, government support, or name-brand customer contracts. A startup with innovation and high entry barriers is the most attractive candidate for investors and acquisition partners.

  6. Lock in customers with loyalty and high cost of change. Billion-dollar businesses are seldom about a single transaction with any customer. They’re about building long-term relationships, where the longer the customers use the product, the harder it is for them to leave. Great companies tend to build great ecosystems to provide added value.

  7. Find a pent-up need and build a strong brand early. Brand building is costly and difficult, but making your brand a household name has the power to differentiate your product from everyone else’s. If there is a real need, people pay more for a brand-name, and perceive a higher level of trust and value, as well as an emotional attachment.

The message here is that just because you have an innovative new technology doesn’t mean it will rise above the competition and make money. You have to analyze each innovation early and continuously with a critical eye. Hoffman’s seven rules, paraphrased here, will tell you if you are likely to be become a dominant player. If not, it may pay to pivot now before your money and energy are gone.

Marty Zwilling

*** First published on Inc.com on 11/14/2017 ***

0

Share/Bookmark

Friday, November 24, 2017

7 Ways To Survive The Retail Customer Shift To Online

Ecommerce_salesIn my role as advisor to small businesses, I often hear first-hand the challenges and failures of retail store owners who fear the advantages of online and feel the exodus to eCommerce, led by Amazon and Ebay. Ironically, the most common desire I hear from entrepreneurs selling wholly online, is the need for their entry into retail, as the next step in their growth strategy.

What neither group seems to fully comprehend is that retail needs to fundamentally change to succeed, far beyond the addition of an online component, to meet the experience expectations of today’s generation, an oversupplied global marketplace, and technology for instant pricing and distribution. Many pundits are already talking about a “retail apocalypse” that has already started.

In an effort to learn a bit more about this phenomenon, and how to capitalize on it rather than fight it, I just completed a new book, “Retail’s Seismic Shift,” by Michael Dart, with Robin Lewis. Dart and Lewis should know, since both have over twenty-five years of experience consulting with dozens of retail and consumer product companies, old and new.

Here is my summary of the strategies they recommend for retailers and eCommerce companies alike to meet the challenges ahead and thrive:

  1. Demonstrate a willingness to break “business as usual.” Test new things and keep testing in your market for things that work. There is no magic, and things change so fast that you can’t count on things that worked for you in the past. Companies that are constantly looking forward, rather than backward, are going to be victorious.

  2. Encourage and reward out-of-the-company thinking. Make sure everyone is curious and open, and not getting stuck with ideas from inside your company. People must be measured in performance reviews against industry best practices, rather than previous results in your business. They may be improving every period, but losing the race.

  3. Measure your agility by putting metrics on change. Old views of change rates are no longer competitive. Don’t allow a subjective view to cloud your reality. Count the number of new projects, time and resources required to implement, and measure the return in revenue, customer satisfaction, or cost savings. In other words, stop focusing on meaningless metrics, and instead focus on store execution instead.

  4. Abandon the concept of “cookie-cutter” stores. These days, you need different retail layouts and sizes for urban communities versus small neighborhood communities. Some may have no product at all for carry-out, with demonstrations and iPads for ordering and delivery the next day. Others highlight upscale styles, or complement nearby stores.

  5. Create a non-online memorable customer experience. Only retail can provide real people relationships, and they better be memorable on the positive side. Find your niche, and it’s probably not competing on price and volume alone. These days, customers expect a focus on a higher cause, such as sustainability or social improvement.

  6. Look for growth in emerging global market geographies. Rather than saturating your coverage of a single geography, use technology and the low cost of global manufacturing to cherry-pick new opportunities. There will always be markets where the culture, income levels, or the products don’t lend themselves to online.

  7. Build a community with face-to-face between customers. Smart retail stores sponsor live events, peer-help sessions, and customer demonstrations to create great experiences and opportunities for people to feel community with others that they could never find online. Perhaps they need to add a coffee bar, or other entertainment options.

The time to start for new ventures is at the beginning, when you can set the right team culture, and before biases are set. For existing businesses, it’s harder. You have to break things, change people, and build some new habits yourself to be the right role model. The grass may be greener on the other side of the fence, but if you can’t get over the fence quickly, you won’t live to enjoy it.

Marty Zwilling

*** First published on Inc.com on 11/10/2017 ***

0

Share/Bookmark

Friday, November 17, 2017

6 Steps Required From A New Venture Dream To Reality

new-venture-dream-to-realityIt seems like everyone wants to be an entrepreneur and get rich these days. As a business mentor, I sometimes feel besieged by people begging for my view and support of their latest idea. In reality, I like most ideas, but I have to tell them that the real challenge is taking the inspiration from a dream to a business reality. All the evidence says that over 99% fail to make that leap.

So a better question than asking about the quality of an idea, is asking about the quality of your plan to implement the idea. There are lots of resources available for that question, including the Internet and mentors like me. It’s really a multi-step process, with the first step getting you from an idea to a viable product, and the remaining steps creating a sustainable business.

As an example of a good resource, I enjoyed a classic book, “Idea To Invention,” by Patricia Nolan-Brown, that does a great job on the key steps. Here is my interpretation of her realistic process for deciding and then actually taking your inspiration from an invention idea to a sustainable business:

  1. It all starts in your head (think it). Start with what you know, but think outside the box. As you think and explore and imagine the possibilities for new products, remember that it should have a broad opportunity, appeal to people who have money to buy, and needs to have pizzazz to get people’s attention in this age of information overload.

  2. Now get real (cook it). Before you get too excited, it’s time to do some homework. Find out if something very similar is already selling, and who your competition would be if you proceed. Ask some potential customers to see if there is real interest, and start thinking about price versus cost. Look hard at the technology for feasibility and risk.

  3. Keep thieves away (protect it). Limit your disclosures to people you trust, and learn the use of non-disclosure agreements (NDA). File at least a provisional patent and one or more trademarks. Be wary of crafty shysters who will flood your mailbox with official-looking mail offering to help for a fee, or demanding fees you forgot to pay.

  4. Make ‘em want it bad (pitch it). “Pitching” is the insider term for presenting your product idea to people who could conceivably buy it or fund your efforts. Start by developing an “elevator pitch” that you can deliver in 30 seconds to hook a potential investor. Attend trade shows and network to find the right players and pitch your product.

  5. Factory in the garage (make it). This is the point where you work on the specifics of being able to deliver your product or service. Relevant questions include the type of business entity (LLC or C-Corp), licensing or manufacturing, sales and marketing, and staffing. It’s also time to build prototypes to make the product come alive.

  6. Continuous improvement (replace it). Once you have a real product, and it’s actually selling itself online, or on store shelves, you may think you can just sit back, relax, and collect your riches. But remember that complacency kills, and you always need to be thinking of the next product iteration, new territories, and new competitors.

Thus you see that framing your idea is the first of at least six steps in making it a business, and probably less than one percent of the entire effort required. Now you see why no one should judge business success potential by the idea alone. I’ve heard the pitch for many million-dollar ideas, but I haven’t seen anyone pay that for one yet.

In fact, the common element in all these steps is “you.” Investors learned this a long time ago, so most will tell you that they invest in people, not ideas. They safely assume that an entrepreneur with the right attributes will start with a great idea, and spend their time honing and presenting a great plan to deliver, leading to a successful business.

You don’t need the intelligence of a genius to cash in on your dream, and you don’t have to be born with special genes to be an entrepreneur. But you do have to be passionate, positive, determined, and a problem solver to get it done. Talkers and dreaming without follow-through will fail. Are you ready to cash in on your inspiration, or are you comfortable in the other 99 percent?

Marty Zwilling

0

Share/Bookmark

Wednesday, November 15, 2017

8 Ways That Creating A New Business Helps Your Career

career-road-signIf you are one of the many professionals still trapped between jobs by circumstances outside your control, or are about to dump the loser job you have now, you should be actively defining and starting your own business, in parallel with looking for that ideal job. Let me explain why this is a win-win deal, no matter what the outcome.

You have probably secretly always wanted to run your own show, but with an existing job, never took the time to consider a startup. Then there was always the risk of failure, which of course doesn’t apply once your real job is gone. Also, for most of us, not having done it before, we have no idea where or how to start.

Here are my top recommendations on how and why initiating a startup while looking, or about to be looking for a job, is the right thing to do:

  1. No gap in your resume. Instead of an embarrassing gap in your resume for your period out of work, you have an entry for your startup business, showing initiative, leadership, and breadth of experience.

  2. Fun learning experience. It’s more fun tackling the challenges of a startup in between job search activities, than sitting around feeling sorry for yourself and waiting for status callbacks on interviews (which seem to have gone out of style).

  3. Explore finding a business partner. Unless you are a true loner, you need someone like-minded but complementary in skills to help you with the startup plans. It’s always good to have someone to test your ideas, keep your spirits up, and hone your business skills. Now you have a reason for talking to people who may become lifelong friends.

  4. Learn how to incorporate a business. First, pick a name for your company and do the paperwork on starting a Limited Liability Corporation (LLC). Almost anyone can handle this without professional help, and the cost is less than $100 in many states. It shows everyone you are serious, and limits your liability on any mistakes.

  5. Practice developing a business plan. Pick a startup business that you can do for minimal cost, like a services business with the skills you have. With simple software available today, find a domain name and implement your own website. Use social networking and blogging to get your message out. You don’t even need an investor.

  6. Get business cards made. Nothing says you are serious about a business like handing out professional business cards at local events and Chamber of Commerce meetings. Do them on your home computer for a few dollars. Offer to help a couple of customers free, just to get your act together and your presence known.

  7. Have startup efforts to highlight in job interviews. Work your startup efforts into every job interview and application. It will definitely show off your energy and vision, and will make you a more competitive candidate for any role.

  8. Give yourself a choice – job or your own business. Obviously, at some point you will need to decide whether your startup business is better than the job opportunities. That’s good because it’s always nice to have an alternative, rather than feeling that you just have to take the first dead-end job offered.

There are other startup related points I could make here, like joining an existing startup as a “volunteer” for a time, just to learn more about what is required. Also, in most geographies, there are organizations springing up, and university workshops, to mentor people out of work and contemplating a startup. Get some help from them if you need it.

Just remember that problems are really often opportunities in disguise. Don’t miss out on what may be the best opportunity you will have in your lifetime for a new career. Start up now.

Marty Zwilling

0

Share/Bookmark

Monday, November 13, 2017

What Great Bosses And Great Employees Have In Common

happy-bosses-dayEveryone in business loves to complain about their boss, and a classic Gallup study found that 50 percent of current employees have left at least one job in their career to get away from a bad manager. When asked for clarification, the most common reason seems to be a managers lack of clarity in setting expectations, which is obviously one of the most basic of employee needs.

On the other hand, almost every one of us in business can remember that one special manager in their career who exemplifies the norm, who commanded our trust, and treated us with respect, even in the toughest of business crises. In commemoration of U.S. National Boss’s Day every October, let’s all tip our hat to that unique and rare business person we wish all would emulate.

In an effort to be a better business advisor, and recognizing that the answer is not usually as simple as a single dimension, I have asked my own sample of employees at all levels for a list of key traits or attributes they see in great managers, resulting in the following list of ten top positive traits of a good boss:

  1. Clearly communicates performance expectations. Even your best performers don’t like to be surprised after the fact by unknown expectations. One of the easiest ways to avoid surprises is to set deliverable milestone targets for each employee for every period. Then review the performance versus the roadmap and deliverables on a weekly basis.

  2. Shows leadership as well as management skills. As Drucker said, "management is doing things right; leadership is doing the right things." Every employee appreciates guidance on both – to do the right thing at the right point in time, towards attainment of the organization’s goals, as well as employee satisfaction and perceived productivity.

  3. Demonstrates extensive and current domain knowledge. Good bosses demonstrate relevant expertise and confidence about that knowledge, as well as the common sense to make quick productive decisions. This requires continuous learning, an ability to think outside the box, and the flexibility to change as the market and technology changes.

  4. Possesses foresight and skills to plan and delegate. Great managers make it a point to understand the specific strengths of team members, and then scheduling tasks and delegating to the right people to get tasks done within deadlines. The best managers are guides and coaches, with a concrete plan based on goals, not just crisis commanders.

  5. Provides positive and timely employee recognition. Most employees are more motivated by recognition than by money. You must immediately recognize team members, formally and informally, when they complete something successfully or show initiative. Over the long-term, make sure they get more positive than negative recognition.

  6. Is an active listener, and provides immediate feedback. Listening to what is said, as well as what is not said, is of the utmost importance. It is demoralizing to an employee to be speaking to a supervisor who is interrupted for a phone call. Good managers plan for feedback sessions, and pick a venue that is conducive to discussion and adequate time.

  7. Stays cool and calm in tough business situations. A great manager is an effective communicator and a composed individual, with a proven tolerance for ambiguity. He or she never loses their cool, keeps their ego in check, and is able to correct team members without emotional body language or statements. They don’t always have to be right.

  8. Shows empathy for individual problems and challenges. This refers to the ability to "walk in another person's shoes", and to have insight into the thoughts, and the emotional reactions of individuals faced with change or the need to change. Empathy is suspending judgment of another's actions or reactions, while treating them with sensitivity.

  9. Provides a role model for honesty, integrity, and humility. Simply put, today’s managers live in glass houses. Everything that a manager does is seen by employees. If a manager says one thing and does another, employees broadcast it. Managers must be straightforward in all words and actions, including admitting weaknesses and mistakes.

  10. Always displays a positive sense of humor. People of all demographics respond to humor, and respect managers who can find humor even in tough business and personal situations. The majority of people are able to be amused at something funny, and see an irony. One of the most frequently cited attractions to a manager is their sense of humor.

Since most of these traits must seem intuitively obvious, it’s hard for me to understand why so many managers and employees miss on expectations. Perhaps it’s time for employees and team members to adopt and display these traits as well, especially the one about empathy for the challenges that your manager is facing. Only then can it be a win-win relationship for both parties.

Marty Zwilling

*** First published on Inc.com on 11/01/2017 ***

0

Share/Bookmark

Monday, November 6, 2017

8 Creativity Traits That Will Improve Your Leadership

Creativity-Drawing-Creative-Be-CreativeStarting a new venture is all about being creative, not just in the initial solution, but in tackling the daily challenges of every new and innovative business. In my role as business advisor, I find too many people still looking for the right answers in the back of the book. Most of what you learned in school is already obsolete. The winning answers and strategy has to come from your creativity.

In this new world of constant cultural and technological change, the only source you can trust is your own ability to learn faster and be more creative than your competition. In that context, we all have to deal with a huge information overload, which can stifle creativity, just by the sheer weight of trying to consume all the data bombarding us daily from the Internet, social media, and press.

In fact, according to a recent book, “Too Fast to Think: How to Reclaim Your Creativity in a Hyper-connected Work Culture,” by Chris Lewis, the pressure of this information overload is changing human behavior, and not always in good ways. He should know, based on his years of experience as a media trainer for senior politicians, business people and celebrities.

He sees the information overload as a major source of stress, a feeling of being constantly interrupted and out of control, and reduced focus on creativity. Lewis offers eight steps to reclaiming your creativity that I believe every entrepreneur should adopt:

  1. Quiet – creativity speaks quietly and needs concentration. It’s important to schedule some time for thinking each day, away from the noise and clutter, so we can refreshingly experience sounds, smells, touch, and the full senses. The enemies of this are multi-tasking and juggling. If you are concentrating on too many things, creativity will not come.

  2. Engage – creativity needs focus and commitment. Take the time to listen fully to the voices that really count, including your team leaders and customers. Also take the time to listen and believe in yourself. Take on and conquer your own fears and challenges, before you face the business challenges which require extra creativity.

  3. Dream – creativity needs imagination and free thinking. Research has long suggested links between dreams and creativity. It suggests that the dreams themselves--with their idiosyncratic imagery, colorful extrapolations on the same theme and nonjudgmental stance--model the free thinking that precedes actual creation.

  4. Relax – creativity requires patience and will not be forced. Sometimes your “Type A” personality works against you. You may never learn to love the queue or the line, but you can be calm in doing so. Ideas do not arrive by timetable. If you live by the clock, you may not allow creativity to intervene. Practice slowing down your pace once in a while.

  5. Release – let go and accept that you can’t do everything. Don’t push off the basics of life in favor of work – schedule and maintain time for sleep, exercise, and healthy eating. Find time for some any of the creative arts to jump-start your creativity – dance, art, non-work relationships, or other hobbies. This new-found creativity will spill over to your work.

  6. Repeat – experiments and repetition are the key. Scientists have long known that the best results come from controlled experiments, meaning that just one (or a few) factors are changed at a time, with repetition, while all others are kept constant. With information overload, too much input can lead to random tests with no creativity or analysis.

  7. Play – creativity comes from what you enjoy and love. You can’t play or enjoy things when you are constantly rushing. Take the time to explore new ideas and have deep conversations with creative people about things you enjoy. If you don’t enjoy the financial side of your business, find a partner to be creative there, so you can be creative in yours.

  8. Teach – people learn more about creativity helping others. The best mentors in business often find themselves learning as much as their mentees. You will find yourself creatively inspired by someone else’s style and ideas, and you can make them your own by improving them, changing them, or personalizing them in some way, and sharing.

Above all, remember that creativity in business is not a solo act. Good leadership is bringing out the best in creativity from all members of the team, through collaboration, customer engagement, incenting change, and publicly recognizing every contribution. To fight the negative impacts of the current information overload, what have you done today to foster your own creativity?

Marty Zwilling

*** First published on Inc.com on 10/23/2017 ***

0

Share/Bookmark

Friday, November 3, 2017

9 Sources Of Inspiration To Make Your Idea A Winner

businesswoman-inspirationIdeas are a dime a dozen, but the inspiration to drive a great business is a lot harder to find. As a mentor to many aspiring entrepreneurs, I often get asked for next sure-fire idea. I have to tell them that anyone can find ideas, but only you as a person can find the passion to transform one into a successful business. That’s why investors talk about investing in the jockey, not the horse.

Elon Musk, Steve Jobs, and other famous entrepreneurs are examples of dedicated people who looked for inspiration, rather than ideas for their next business. From my experience and their feedback, I can summarize the top principles which provide sound inspiration for entrepreneurs, who are then often able to convert even a mundane idea into a satisfying and long-term business:

  1. Choose an idea from your heart, rather than someone’s head. Look inside yourself for inspiration and ideas, rather than asking me or anyone else. Only then will you find the passion to persevere through the challenges of a new venture, and actually enjoy the journey, as well as the destination. Do what you love, and it won’t even feel like work.

  2. Focus first on changing the world, rather than making money. Great entrepreneurs identify something larger than money to provide purpose and meaning. Happiness does not scale up with income. Studies show that doubling your income increases happiness by less than 10%. The more you focus your efforts on others, the easier it is to do great work.

  3. Work to anticipate a future market change and get there first. When attacking a currently known problem, chances are that dozens of others are already working on it. If you can look ahead successfully, you will have more time and fewer competitors to kill your inspiration. In addition, you will be seen and appreciated as a leader with a legacy.

  4. Surround yourself with inspired people, and absorb their energy. Find people you respect and admire, who are inspired, and you will find their energies contagious. They will also amplify your inspiration to your customers, and keep it growing in your own mind. These people need to cover the gamut from partners, marketers, suppliers, to customers.

  5. Solve a problem based on your own personal knowledge. Stick to domains within your experience, and your business inspiration will be more real and long-lived. Avoid the tendency to see the grass looking greener on the other side of the fence. It’s the things you think you know about a problem that will kill you, as well as what you don’t know.

  6. Be inspired by customer value rather than solution features. Customers don't care about your product or service's features. Instead, they want to know how your solution will benefit them, in lower costs, dreams, hopes, and ambitions met. In other words, seek inspiration from your customer’s perception of value, rather than solution features.

  7. Create a great customer experience, not just a product. I find that entrepreneur inspiration fades quickly, if not complemented by inspiring customer experiences. These days, customers are inspired by solutions that are easy and fun to find, have satisfying buying experiences, and great support. These get recommended many times to others.

  8. Keep it simple by removing features, rather than adding more. Simplicity is the ultimate sophistication of design, according to many studies. Steve Jobs was a master of inspiration from sophisticated designs, from the iPod to iPhone and packaging. Beware of false inspiration from early adopters, who typically ask for more features and options.

  9. Practice telling your story to get and keep customers inspired. You can have the most innovative idea in the world, but if you cannot get people excited, it doesn’t matter. The key to storytelling is adapting your message and presentation to match the audience, rather than trying to find one size that fits all. Their inspiration then becomes yours.

Inspiration is what keeps your mind open to new possibilities, and that is certainly critical to business success in this age of rapid change. An idea can be innovative one day, and old news the next. Will your current inspiration and passion carry you to success through the challenges and changes that are normal for a new venture today?

Marty Zwilling

*** First published on Inc.com on 10/20/2017 ***

0

Share/Bookmark