Sunday, July 22, 2018

10 Reasons To Market Yourself More Than A Great Idea

Bill_Gates_speakingToo many entrepreneurs I know still believe that that their great idea will carry the startup, and they may even minimize their own value, especially if they have introvert tendencies. Yet most investors agree that the “idea” is worth nothing alone, and it’s the entrepreneur execution that counts. That means that selling yourself is more important than selling your idea.

In the corporate world, experts have recognized for a long time that how people perceive you at work is vital to your career success. No matter how talented you are, it doesn’t matter unless managers can see those talents and think of you as an invaluable employee, or a game-changing manager, or the person whose name is synonymous with success.

In the entrepreneur world, your perception is equally critical, except the “managers” in this world are your investors, customers, vendors, business partners, and team members. Per a classic book by Dan Schawbel, “Promote Yourself: The New Rules For Career Success,” you can maximize these perceptions, which apply equally well to entrepreneurs as well as professionals.

Everyone needs to realize that whether it’s in the workplace or in the startup community, business is a new world today with new rules. Whether you are a new young Gen-Y entrepreneur, or a Baby Boomer who is struggling to stay relevant, here is a quick guide to some of the changes that Schawbel sees in the workplace requiring self-promotion, that I have updated for entrepreneurs:

  1. Your startup “idea” is just the beginning. Your startup idea only scratches the surface of what is required to build a successful business. Use the idea to kick-start your relationships with co-founders, investors, customers and business partners. Your ability to promote yourself and learn from these will determine your ultimate success.

  2. You are going to need a lot of skills you don’t have right now. A recent Department of Education study shows that soft (interpersonal) skills have become more important for success than hard (technical) skills. Entrepreneurs need leadership, teamwork, listening, and coaching skills, which you can learn from advisors and networking with peers.

  3. Your reputation is the single greatest asset you have. Your CEO title might be good for your ego, but in the grand scheme of things, what matters more is how much people trust you, whom you know, who knows about you, and the aura you give off around you. What other people think you can do is more important than what you have done.

  4. Your personal life is now public. With the Internet and social networks, things you do in your personal life can affect your success in a big way. Manage your whole image, rather than ignore it. Even the smallest things, like how you behave, your online presence or lack of it, and whom you associate with can help build your brand or tear it down.

  5. You need to build a positive presence in new media. There are plenty of benefits to new media, if you maintain a positive presence. Your online social networks enable you to build your reputation, connect with people who have interests similar to yours, find educational opportunities, and put you in touch with people who can help your startup.

  6. You will need to work well with people from different generations. Because the combination of economic need and increasing life spans is keeping everyone in the workplace longer, you will need to work well with people of all different ages. Each generation communicates differently, and has a different view of the marketplace.

  7. The one with the most connections wins. We have moved from an information economy to a social one. It’s less about what you know (Google search will help you in seconds), and more about whether you can work with other people to solve problems. If you don’t get and stay connected, you’ll quickly become irrelevant to the marketplace.

  8. All it takes is one person to change your life for the better. Remember the rule of one. All you need is that one investor, that one major customer, or that one distributor to keep you ahead of competitors. It’s up to you to get that key person on board to support your business. Self-promotion in the right way can make all the difference.

  9. Hours are out, accomplishments are in. If you want to grow your business, stop thinking about how many hours you work, and aim for more milestones and traction. Success is more results, not more work. Measure your results and promote them to every constituent. Help them to realize your value.

  10. Your startup is in your hands, not your investors or even customers. Be accountable for your own business success, and take charge of your life. Look for win-win business relationships, since people won’t help you if you are not helping them. If you aren’t learning and growing, you have nothing to promote and aren’t benefitting anyone.

The challenge for all entrepreneurs is to gain visibility and show value without bragging and coming off as self-centered. Take personal credit where credit is due, but also share the successes of the team and the business milestones with everyone. Success leverages success.

Now, how do you start? I like Schawbel’s recommendation to do one thing every day, like add a new skill, or build a new relationship that will advance you. Developing this “one step forward a day” habit will keep you current, make you feel more fulfilled and confident, and increase your ability to promote yourself. Are you promoting yourself today, or demoting your startup by default?

Marty Zwilling

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Saturday, July 21, 2018

6 Learning Strategies Today For New Venture Founders

Development-Employee-Success-Opportunity-LearningOne of the simplest questions I get from aspiring entrepreneurs, and ironically one of the hardest, is “How do I start?” I want to tell them to just start anywhere, but I realize that most have no idea where anywhere is. They just aren’t prepared for the life they want, and are really asking me how to learn to be an entrepreneur. It takes more than passion and a course on business basics.

We all come from the era where our society and education prepared us for the labor market, meaning working for someone else as an information professional, factory worker, or retail associate. Now change is driving an opportunity society, where the next step is undefined, and entrepreneurs are in the forefront of the wave of people whose best skill is learning how to learn.

A while back I found a great book, “America's Moment: Creating Opportunity in the Connected Age,” put together by a group of fifty current leaders from across American life, that points out well some of the tools that can help all of us learn how to learn in this rapidly changing world of new opportunities. I have adapted their key recommendations here for aspiring entrepreneurs:

  1. Business gamification and simulation. Learning doesn’t have to be all work. We know now that people learn from a younger age, and keep coming back for more, from sources that are entertaining and educational (edutainment). With new tools like ThriveTime Show and GamEffective, people of any age can learn to start or take their business up a level.

  2. Adaptive business advising and learning. Every business and every entrepreneur is at a different stage, so it’s time to seek out learning tools that can adapt to you, rather than the other way around. Universities and the marketplace are spawning tools like Brainly, which is a learning network or massively multi-player question and answer tool.

  3. Help entrepreneurs with constant learning. The wealth of online education offerings is a great start, but is not enough. Business advisors need to be ready to help at every stage, and I see it beginning to happen. Yet many new entrepreneurs are hesitant, perhaps out of fear or ego. If you are not constantly learning, you are falling behind.

  4. Mix business learning with doing. Entrepreneurs don’t need to know everything about business before they start. They do need the first few steps, and where to find the next steps. There is no standard course for this, but the answers are accessible online, if you know how to search, follow blogs, and interact with the relevant social media groups.

  5. Business financial aid alternatives. Crowdfunding is just the latest alternative for assistance to entrepreneurs who need help, supplementing the existing alternatives of loans, grants, angel investors, venture capital and many others. These days, if you can’t find money, you haven’t tried hard enough or maybe your idea isn’t a good one.

  6. Utilize business content curators and coaches. Potential resources available to entrepreneurs are enormous, but often under-utilized. The challenge is to find these just-in-time, including community and university startup incubators, accelerators, and advisors. Entrepreneurs should be monitoring online curator platforms and blogs.

In this new opportunity society, the personal traits for success have also changed from the industrial age and the information age. The days of long-term loyalty to an employer and methodically following direction are gone. Now the premium is on creativity, willingness to take a risk, and ability to keep up with change. Persistence and problem solving are sought-after virtues.

Nurturing these traits, and practicing incremental and continuous learning, are the best ways to start the life you want as an entrepreneur. Finally, before you start, you need to define what success means to you. It may include financial gain, but more likely the lasting satisfaction and happiness will result from your legacy of change in technology, or your impact on the social ecology of the world. If you can’t tell me where you want to go, I can’t really tell you how to start.

Marty Zwilling

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Friday, July 20, 2018

How Some Ventures Continually Stay Ahead Of The Crowd

blockbuster-closingAs a business advisor, I have long been surprised by the large number of industry stalwarts, including Blockbuster, Kodak, and General Motors, that have been dealt major setbacks, or even total failure, by upstart young companies, with a fraction of the resources or industry experience. The stalwarts should be making the big leaps to be competitive, rather than the other way around.

In fact, almost 90 percent of the Fortune 500 firms that existed in 1955 are gone. Conventional wisdom is that mature companies are their own worst enemies, too blinded by their success to see the world changing around them, and too focused on repeatability to see the need for innovation and leapfrog advances in technology.

Based on my experience as an executive in a couple of large companies, including IBM and First Data, I second the principles for keeping up with competition and change outlined in a new book, “Leap: How to Thrive in a World Where Everything Can Be Copied,” by Howard Yu. He speaks from years of experience as director of an advanced management program for global executives.

Let me paraphrase a few key points that he and I both agree are critical:

  1. Understand your firm’s foundational knowledge and trajectory. Many large companies, and even startups, often forget their core competencies and direction in an effort to grow their business and customer base faster. The results in a dilution of their focus, doing many things poorly, and losing sight of key markets and key competitors.

    For example, Kodak invested billions of dollars into technology for mobile phones and other digital devices, but didn’t recognize the impact of digital cameras on their core film business. The result was that they reacted too late to recover, and were overrun by competitors as the market and technology rapidly changed.

  2. Acquire and cultivate new knowledge disciplines. Competitive advantage depends most critically on the assimilation of new knowledge and the timely creation of new markets and new businesses. The role of managerial choices cannot be overstated here. True leaders have to be willing to take calculated risks, rather than taking safe positions.

    Procter & Gamble, for instance, has maintained its leading position in household consumer goods by leaping toward new knowledge disciplines, versus merely refining existing products. They made big bets on IVORY soap earlier when they predicted candle revenues falling, and push the limits today with environmentally sustainable products.

  3. Leverage seismic shifts in the market or economy. Although important variances exist between industries, certain seismic shifts to the global economy will be felt by everyone regardless of who you are and where you live. Today it is the inexorable rise of intelligent machines, the emergence of ubiquitous connectivity, and digital convenience.

    Every potential winner must leverage these seismic shifts around them and leap accordingly. Whether you are a technology creator, traditional manufacturer, startup entrepreneur, or nonprofit organization, you must identify those forces that matter the most in the coming decades and reconfigure your competencies ahead of competitors.

  4. Experiment to gain evidence about unknown unknowns. Bold decisions always look good – until they are proved wrong. To make evidence-based decisions, leaders must carry out frequent experimentation to arrive at conclusions with the required level of accuracy. The biggest risk in large corporations is often political infighting and inaction.

  5. Starting with top executives, dive deep into execution. Awareness is not the same as commitment, so insights alone never suffice. Thinking doesn’t equate to doing. Committed executives at the very top must be ready to intervene to implement a new directive. Only they can remove the organizational hurdles that may stand in the way.

Deep dives are different from micromanagement, because they rely on knowledge power rather than position power. Elon Musk’s deep dive into Tesla has been based on his knowledge and conviction that electric and driverless car technology is here now, rather than any market research from third parties.

Even with these principles, outperforming competition is difficult, and doing it consistently over decades as your leadership changes is nearly impossible. It certainly can’t be done unless you start today. Your customers, your local community, and your stakeholders all are depending on you and count on you to maintain momentum and success. Are you ready to take the leap?

Marty Zwilling

*** First published on Inc.com on 07/06/2018 ***

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Wednesday, July 18, 2018

7 Ways To Counter The “I’m Too Busy” Syndrome At Work

hurry-too-much-workI’m sure you know a few people at work who are always “too busy,” but never seem to get much done. For many of these, it’s an excuse to decline new work, impress others, or gain sympathy. For others, it’s a legitimate complaint, indicative of being out of control or not managing their time. If you find yourself in this category, you need to focus on techniques to improve your productivity

On software teams, for example, a detailed study published years ago shows differences as great as ten to one in productivity between comparable team members. In fact, in my own business experience, I have found that team members who proclaim to be the busiest often are the least productive, producing the fewest results. In business, for me, the only thing that counts is results.

People will tell you quickly about all the external factors lowering productivity, including toxic office environments, motivation, and personal health problems, but I believe there are positive work habits that can more than compensate for these. As I outline key ones in my coaching practice, I find that many people have never tried them and even find them counter-intuitive:

  1. Stop multitasking and focus on the task at hand. Many people think they can improve their productivity by working faster and doing multiple things concurrently. In fact, constant task switching and rushing yourself kills efficiency and leads to many errors, requiring rework. In most cases, you can increase your productivity by slowing down.

  2. Capitalize on deadlines to maintain a sense of urgency. When your time on an important task is limited by a deadline, the urgency created will overcome your urge to procrastinate. If there is no deadline, it pays to impose one on yourself. Your competitive drive for success will cause you to dive in with more energy and not be easily distracted.

  3. Limit your daily “to-do” list to the top three results due soon. Thinking in threes allows you to not be overwhelmed by a long list of activities, keep important activities on top of mind, and better manage your time. If you can check off all three by the end of the day, you will get the satisfaction of list completion, without the frustration of a growing list.

  4. Intentionally classify more of your tasks as non-critical. The natural human tendency is to treat all tasks as equally important, causing that feeling of an overwhelming workload and being “too busy.” In fact, all business tasks are not created equal, and you may find some to ignore totally. Don’t be afraid to say “no” to extraneous work requests.

  5. Apply the “minimum viable product” (MVP) strategy to results. Perfection is not really possible nor necessary in most business tasks, so I recommend the same strategy that good startups use on products, before shipping to customers. This is also called the Pareto Principle, where 80 percent of the value comes from 20 percent of the effort.

  6. Position yourself at least 20 seconds away from distractions. Distractions, such as peer questions, smart phones, and snacks are the enemy of productivity. I recommend the 20-second rule, postulated by psychologist Shawn Achor after he found evidence that only a few seconds of delay or extra distance is enough to keep most people on task.

  7. Pause regularly to rest, renew, and celebrate successes. Let go of total exhaustion as your indicator of productivity. If you pause to relax and meditate every hour or so for five minutes, and reserve enough time for sleep at night, your productivity will increase. Take the time to acknowledge feelings, celebrate accomplishments, and gain insight.

If you have people on your team who are always “so busy,” the best thing you can do to improve team productivity is to spend some time coaching them on the habits outlined here to better manage their workload and their time. Don’t forget to take a hard look at your own work habits, for opportunities to improve. The value of increased productivity to your business is self-evident

More importantly, the value to your health and your career is paramount. Life is too short to spend every day at work feeling exhausted and stressed by an overwhelming workload, or by exasperation with other team members who are always “too busy” to get their job done.

Marty Zwilling

*** First published on CayenneConsulting on 07/03/2018 ***

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Monday, July 16, 2018

8 Ways To Instill A Sense Of Purpose In Your Startup

Environment_stewardship_photoStarting a new venture and thriving in today’s economy is hard, but the best have figured out that customers and employees need to feel that you have a sense of purpose, to complement the company’s pursuit of profit. A higher purpose motivates people in a way that financial wins alone never will. For a company to thrive, it needs to find and broadcast its purpose in all that it does.

A great product or service as a solution is necessary, but not sufficient. If you want your company and team members to be seen as going above and beyond the competition, you need to include an element that adds social value or sustainability for the greater community. For example, Whole Foods is involved in efforts to safeguard the environment and ensure humane animal treatment.

Nearly 80 percent of customers say they are more loyal to purpose-driven brands than traditional brands and nearly three-quarters are more willing to defend them, or even pay a premium, according to the 2018 Cone/Porter Novelli Purpose Study. Here are eight specific steps for how you can add purpose to your company’s image and execution:

  1. Let your passion and skills define a mission you can love. Make sure you select a mission that adds shared value and provides a competitive edge, as well as playing to your strengths and interests. Assess likely industry changes and disruption over the next five years, and structure your business to lead the way with personal commitment.

  2. Become a thought leader early through social media. Today anyone with a purpose can test their message through blogging, Twitter, YouTube, Instagram, and many other channels. Every customer is looking for provocative thought leaders, such as Sir Richard Brandon and Elon Musk, who are able to challenge current issues with creative solutions.

  3. Tie marketing content to the bigger picture of the world. Companies that matter focus beyond the buy/sell transaction view of the world. They recognize and contribute to the interconnectedness of all moving parts of the market as it evolves in real life. It’s about relationships, communication, thought leadership, and social value contribution.

  4. Build a skilled team to design and develop what is needed. Your company can’t be a leader without providing a great solution, based on realistic market needs, and demonstrating an ability to execute. Building a solution and a company is not a solo exercise. Assemble the right people, and don’t forget to include real customer interaction.

  5. Incent your team to focus on the purpose rather than profit. Nothing motivates a team more than feeling that company success is a function of their personal contribution to purpose and solving customer problems. This requires hiring people for their attitude, as well as strengths, training them properly, and empowering them to make decisions.

  6. Be a leader to a positive future, rather than a follower. People want to see inspiration and commitment to a better tomorrow, as well as sources of better solutions today. This requires that you be a disruptor of the status quo, and proactively lean into complexity to align people, processes, and systems to turn current problems into new opportunities.

  7. Demonstrate daily your personal commitment to your purpose. Your team and customers watch your actions, more than they listen to what you say. Your company has to be more than an in-animate brand – it has to come alive through people, starting at the top. People that matter take a long-term view, and value the future of their customers.

  8. Seek out partner relationships aligned to your purpose. Community partners should be aligned around a purpose they all explicitly share, such as eliminating world hunger. At the same time, partners should be clear and explicit on the benefit to their own group for involvement in the partnering endeavor. This will strengthen the message for all.

If your company consistently finds ways to add more value and drive higher-order customer needs, it will become the preferred choice in your targeted markets. In addition, it will attract the best talent, the most customer loyalty, and provide greater personal satisfaction to you, as well as your team and your customers.

Even in today’s rapidly evolving economy, driven by technology, the most successful companies lead with their purpose rather than their technology. It doesn’t matter whether your business is a startup or a mature operation, the principles are the same. Start implementing these steps now, before your competitors pass you by.

Marty Zwilling

*** First published on CayenneConsulting on 06/28/2018 ***

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Sunday, July 15, 2018

8 Lessons From The Field On Building A Premier Brand

brandEvery new business dreams of becoming the premier brand in their space, like Starbucks is to coffee, and Apple is to consumer electronics, but they have no idea how difficult that is to achieve. In fact, only 100 of the 10,000 multimillion-dollar consumer companies around the world can claim to be an “apostle brand” – one that inspires enduring trust, loyalty, and endorsement.

One of the reasons it’s so tough is that the rules are constantly changing on what it takes to win over customers, as customer attitudes and cultures change, and competitors continually strive to “raise the bar” on product and support. I found some eye-opening insights in the classic book, “Rocket: Eight Lessons to Secure Infinite Growth,” by The Boston Consulting Group.

They outline the new rules for existing brands, but I believe that every entrepreneur who doesn’t yet have a brand yet should study these carefully, as paraphrased for startups below. It’s a lot harder to recover from brand missteps made early, than it is to get is right the first time, so build your brand strategy accordingly:

  1. Don’t ask your customers what they want next. The challenge of every startup is finding that balance between solving a real problem today, and giving customers the courage to make a leap forward. Existing customers can’t envision a new concept, or new behaviors. You have to excite their imagination, then show them the new world.

  2. Turn your biggest fans into apostle customers. Your first satisfied customers define your voice in the marketplace. They see your strengths, weaknesses, and opportunities. If you listen to them and respond, they will become your best apostles, delivering on average eight times their own value in new customers. That’s a winning growth trajectory.

  3. Always welcome a customer’s scorn as a gift. Even in a new startup organization, it’s easy to become convinced that a percentage of unhappy customers is normal. Instead of scorn and dismissal, a comprehensive and deliberate response is the key to brand growth and vitality. Without the feedback, no change in the demand space will be noted.

  4. People still judge a book by its cover. Consumers shop with their eyes, just like they eat with their eyes. Target all the senses all the time. Shame on you if you offer any product or service that is dull or unattractive. Steve Jobs was a master at this. Visual appearance and core values matter. Make your team as well as your customers proud.

  5. Transform your employees into passionate disciples. A highly motivated front line engages customers and tells your story with passion. They are your greatest resource for generating new apostles and a cultural advantage. The result is higher repeat purchases and sales without promotion. Loyalty in the ranks creates loyalty in the customer.

  6. Ramp up your virtual and real relationships. The digital age is making virtual relationships with customers indistinguishable from real relationships. It’s a lot easier and faster to grow virtual relationships, and they are both real for online purchases. Your startup needs to use blogs and social media to establish interactive relationships early.

  7. Take giant leaps rather than timid steps. It’s hard to really change the world with incremental advances and consolidation. Be clear and vibrant in your claims and in your deeds, or you will never get noticed in the flood of messages we have to deal with every day. Startups have the advantage in starting with a dream and no feet stuck in the past.

  8. Don’t ever assume that your brand is stable. All relationships are in a constant state of flux, so don’t assume your customer relationships will remain stable. At any moment, your brand will be lifted high or knocked down low by cultural changes or external events. It’s up to you to track the data, recognize a change early, and intervene proactively.

The overall goal of these eight new rules is to help your startup forge the tightest possible emotional connection with the most customers in the shortest amount of time. These customer advocates lead to more love, loyalty, advocacy, and the exponential growth of an enduring brand. It’s the only way to make your startup the next Starbucks.

Marty Zwilling

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Saturday, July 14, 2018

5 Tips From Those Who Thrive Doing Multiple Startups

serial-entrepreneur-elon-muskKnowing all too well how hard it is to start a single new business, I’ve always wondered how several well-known entrepreneurs, including Richard Branson and Elon Musk, have managed to successfully lead dozens of startups to success, and thrive on the process. These special people are called serial entrepreneurs, because they have figured out how to do it over and over again.

In a very real sense, they seem to succeed at everything they try, just like the rest of us wish we could. I learned a lot about the mindset and actions required from a classic book, “Serial Winner: 5 Actions to Create Your Cycle of Success,” by Larry Weidel, a serial winner in the financial services business world over a forty-year career, while helping other people do the same.

Although Weidel’s focus is more generic, I believe his five principles and actions are extremely relevant and can be more specifically targeted to aspiring entrepreneurs as follows:

  1. Make a decision, any decision, and move on. For entrepreneurs starting a new business, the world is fraught with risk and there are no sure bets. Yet making no decision means you never start, or you quickly lose. Serial entrepreneurs embrace the risk, gather the relevant facts, and move forward. You have to move forward to win.

  2. Don’t just build a business, change the world. Every great startup begins with a vision that is much larger than just making a profit. Serial entrepreneurs understand that the business culture today rewards going beyond profit, to helping people and the planet. They set big goals, challenge limits, and have a mindset to exceed every one.

  3. Be prepared for many pivots, but never quit. Winning in business requires surviving many setbacks. Many experts believe that the single biggest cause of startup failure is that the entrepreneur simply quits too soon. Serial entrepreneurs take every setback as a positive lesson learned, alter their course accordingly, and charge ahead again to win.

  4. Trying is not enough, you have to deliver. Serial entrepreneurs focus on surpassing every objective, and they don’t even think about excuses, like economic downturns, culture changes, and running out of money. They have the mental toughness to keep their head down and charging until they have achieved one hundred percent of the goal.

  5. Each success incents a dozen greater ideas. The best entrepreneurs capitalize on the momentum of each success, and can’t wait to aim even higher the next time, based on lessons learned. Once they have mastered the fundamentals, they are never satisfied, but are driven to continuous improvement and streamlining the process.

It helps to have limitless energy, and unshakable determination. Elon Musk is known for his hundred-hour workweeks, and his endless curiosity. It’s also important to surround yourself with the right people, who can complement your vision with the necessary execution skills. Smart entrepreneurs also make good use of domain experts as advisors and mentors.

Don’t forget that today’s innovative “social economy” requires an emotional attachment that links customers to products, as opposed to competitors, translating into sustainable growth. Serial entrepreneurs have found that multiple simple inspirational product and brand messages are far more influential than ones which highlights product features and functions.

Serial entrepreneurs certainly understand the high probability of failure, but they don’t necessarily like to gamble. Instead, they take calculated risks, stacking the deck in their favor. They must have enough confidence in themselves, supplemented by expert knowledge, solid relationships, or personal wealth, to see the risk as near zero.

For serial entrepreneurs, the next step is often to be the CEO of multiple early-stage startups concurrently, or a parallel entrepreneur. The hot new term for this practice is “multi-table” entrepreneurs, which no doubt is derived from the common online gambling practice of playing multiple poker games at the same time. There is no end to the fun of being a serial winner.

Marty Zwilling

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Friday, July 13, 2018

7 Key Steps To Getting Top Performance From Your Team

google-teamDuring my early years of managing in business, I always assumed that if I hired and trained the smartest and most experienced people I could find, I would get outstanding productivity. I quickly learned that top performance also required the right initiatives and responsiveness on my part, high employee engagement, and a matching chemistry and culture with other team members.

For example, according to recent research from Bain & Company, Apple, Netflix, Google, and Dell employees are 40 percent more productive than the average, even though they are no smarter or more experienced. The research shows that senior leaders at these companies focus more on an efficiency culture, team makeup, and remove more obstacles to team productivity.

In my work with startups, I have been struck by how relevant and critical these same initiatives are to even the earliest stage of new ventures, and how hard it is to change later if you don’t get it right the first time. Here are some specific actions I now recommend to every entrepreneur, and to every senior executive, to get top performance from every member of their team:

  1. Clearly and iteratively communicate team goals and objectives. Don’t be lulled into complacency by a few team members who always seem to get the message quickly. I always felt I was over-communicating, having repeated a key message in three team meetings, until I heard a comment, “Why didn’t they tell me sooner what was expected?”

    As your team grows, and the business pivots, communication of expectations becomes more of a challenge. As you contemplate your key messages, I recommend that you count on repeating them at least five times in different forums to assure they are heard.

  2. Define and document role content and standards for performance. Don’t assume that your expectations for a given role will be intuitively obvious to the relevant team member. New team members in a new startup, coming from different backgrounds, may have quite different standards for excellent performance from previous experiences.

  3. Give team members the right to make decisions in their role. Micromanagement is never effective in achieving top performance. You as the manager don’t have the time to make every decision, team members will be de-motivated, and will use your actions as an excuse for low performance. Practice process coaching, but not edicting decisions.

    I recently was an advisor to a very strong technical executive who insisted on “being involved” in literally every decision in his startup. He ignored my advice and ultimately lost several key executives, and then his own health, due to stress and workload. No one can be a top performer in these environments.

  4. Relay regular informal observations on progress and results. Informal feedback should be provided weekly or daily, without emotion. More formal sessions should be held semi-annually. This may seem obvious, but I found it hard to do, given the daily crises and distractions of a normal startup. Don’t surprise your employee at the end.

  5. Give team members the training, tools, and data to do the job. No one can be a top performer without the resources necessary to get the job done. Your responsibility is to anticipate these requirements, listen carefully to feedback from team members, and provide resources on a timely basis.

    For example, if the business was built around your technical invention, it’s easy to forget your own learning curve and the wealth of data you have accumulated over the years. You can’t expect new team members to come pre-loaded with all the same background and insights. They need your mentoring, tools, and historical data to be a top performer.

  6. Diligently provide follow-up and support on assistance requests. Team members assess your responsiveness, just as you measure theirs. Top performers expect to be surrounded by leaders who recognize and supportively respond to situations that go beyond their domain. The goal is to have no employee action impeded by leader inaction.

  7. Formally and informally reward positive results. Informally showing your appreciation on a person-to-person basis and in front of peer team members is usually more valuable than financial incentives. Yet in the long run, you get what you pay for. Thus paying for sales volume, when you desire customer satisfaction, will not get you high performance.

Thus I learned that the performance of your team is a reflection on you as the leader, as much as the performance of individual team members. You select the team members, you set the culture and motivation for the team, and your support is the key to their delivery. Companies who have top performing teams must start with top performing leaders. Now is the time to be one.

Marty Zwilling

*** First published on Inc.com on 06/27/2018 ***

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Wednesday, July 11, 2018

9 Innovation Practices For Long-Term Business Health

innovativer-denkerA guiding principle for startup success, as well as the long-term health of a mature business, is a liberal dose of innovation at the beginning, with additions of the same on a regular basis. Unfortunately, innovation means change, and most business professionals and existing customers, by default, hate change. Thus without thinking, every company becomes more static.

In fact, innovation needs to be an integral part of the company culture and every process from the beginning. This takes leadership from the top, and an ongoing focus on market change, customer feedback, and internal measurement and rewards. For example, Google has institutionalized innovation through a manifesto initiated by Marissa Mayer in her early days as a VP there.

I believe these basic practices of innovation, paraphrased here, should be adopted by every new venture owner, and every business executive, as the keys to long-term health and success in every market served:

  1. Demand and reward innovation from all business elements. Executives should solicit new ideas from everyone at every level, both inside the organization and outside, top down and bottoms up. Business leadership and innovation implementation still need to be visible and supported by all management, through actions as well as messages.

  2. Let customer value be the driver, rather than cost savings. When innovations are driven by increased customer value and satisfaction, business growth will come naturally from repeat business, new customers, and referrals. Employees will be motivated by delighted customers, and the value will spread to the greater community and society.

  3. Aim for an order-of-magnitude innovation improvement. “Nice to have” features or a ten percent cost advantage is not convincing or competitive these days. To get customer attention, you need innovations that represent a tenfold improvement in cost or function. Of course, multiple small innovations should not be overlooked for their cumulative value.

  4. Focus on translating new technology into solutions. From a customer perspective, new technology does not have value until it provides a solution that meets their needs. For Google, this has led to their voice-activated personal assistant, better maps, and the prospect of self-driving cars. Technology innovation alone is necessary, but not sufficient.

  5. Innovations need real market feedback and iterations. Too many innovations that aren’t perfect the first time never get a second look, and die an expensive death. Others get caught in analysis paralysis, and never get exposed to real customers. Remember that the market is constantly changing, so “rinse and repeat” is the order of the day.

  6. Allocate one-fifth of every work day to finding innovation. Start with a focus on hiring people who have a track record as change agents, and encourage them to spend twenty percent of their work time on new ideas and innovations, both within and outside the job boundaries. Make sure you have compensation and rewards to support this strategy.

  7. Don’t be reluctant to share your efforts with your industry. Information sharing, such as through open source and white papers, will increase market acceptance of your innovation, and allow concurrent work on integration and standardization. You need others for collaboration and feedback, and you need their sharing of their ideas.

  8. Treat failures as a badge of courage and learning opportunities. Thomas Edison called every failure a success, as each one taught him what didn’t work. Learn to fail fast and fail cheap to keep up with today’s rapidly changing and highly competitive marketplace. Allow no negativity or penalties to be associated with failed experiments.

  9. Connect your innovation efforts to a higher purpose. Employees think harder and get more satisfaction if they believe their innovations will positively impact the greater good and the environment. Companies that give back are seen as more trustworthy and more attractive for new business. Set and communicate real legacy goals for the business.

The rate of change and competition in the world is increasing, rather than decreasing. This is all the more reason for no more excuses, delays, or negativity about the costs of change. It’s time to create your own innovation manifesto for leading the way, rather than the “business as usual” struggling to keep up. Catching up later is not a viable strategy for survival in business today.

Marty Zwilling

*** First published on CayenneConsulting on 06/19/2018 ***

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Monday, July 9, 2018

6 Demand Generation Metrics To Quantify Marketing ROI

demand-generation-roiEvery entrepreneur knows that good demand generation marketing is the key to growth these days, but very few have the discipline or know-how to measure return in a world of a thousand tools and techniques. Even those things that worked yesterday may not work tomorrow, as the market matures, the culture changes, and competitors appear with new solutions.

Business success is all about meeting the needs of the modern buyer, who is more informed, has access to more choices, and is ever smarter about making purchasing decisions. In fact, we now live in a buyer-led digital age, where the traditional media push-marketing efforts just don’t work. Peter Drucker’s old comment that “culture eats strategy for breakfast” is more true now than ever.

In the classic book, “Driving Demand: Transforming B2B Marketing to Meet the Needs of the Modern Buyer,” top marketing consultant Carlos Hidalgo updates the old guidelines on how to set up demand generation processes, keep them current, and measure results. While his insights have come from large organizations, I give many of the same recommendations to every startup:

  1. Channel engagement performance. Selecting the right sales channels is one of the first strategic decisions that every startup faces. Understanding culture is paramount, but measuring results is even better. Hidalgo recommends a focus on engagement stage indicators including customers by channel, conversion ratio, and cost per revenue.

  2. Lead-stage content performance. The fuel for any good demand generation program is relevant, buyer-centric content. You need to track what content is resonating with your prospective customers, through metrics including submit rate by content offer, elasticity, velocity, cost, and ultimately revenue by content program.

  3. Nurturing stage email performance. The nurturing stage is the link between the engagement and conversion stages, and is most often the automated area of demand generation. That makes it easier to collect results indicators, including number of emails sent, open rate, click rate, and email bounce rates. Don’t just use these in isolation.

  4. Lead management performance. This area of demand analysis is also called the “sales funnel” or “sales pipeline,” used for tracking the overall process from initial prospect engagement to close. Metrics which must be tracked include number of leads, conversion rates by lead stage, velocity, growth rate, and total lead database size.

  5. Demand generation revenue performance. Revenue performance needs to be applied to each individual program, and also rolled up to show the overall performance per dollar invested. Individual measurements should include pipeline value by lead stage, closed revenue by program, pipeline growth, and overall win rate.

  6. Return on investment for demand generation. Obviously, you are looking for demand generation programs that have a positive return on investment (ROI). In addition, the best companies compare the negative and positive cash flows over a period of time to determine the net present value (NPV) of planned future marketing spending.

Instead of looking at demand generation as a pure cost center, smart entrepreneurs ask their marketing team to measure themselves as a line of business, and to report on their profit and loss just like other business groups in the organization. This approach has the additional advantage of potentially saving their budget from arbitrary cost cuts during downturns.

Overall, demand generation and other marketing efforts must move from being a “necessary overhead item” managed by a guru with a crystal ball to a vital business function, managed quantitatively, like the products you sell, and included in your continuous innovation mantra. Are you evaluating your marketing returns today with the same discipline as your product returns?

Marty Zwilling

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Sunday, July 8, 2018

7 Reasons To Not Give Up Too Soon On Your New Venture

never-give-upMost of the young entrepreneurs I know are classic proof of the old adage that people tend to overestimate what they can do in a short period, and underestimate what they can do over a long period. They become frustrated when they are unable to build their startup in a weekend, and give up way too soon when the path to real success seems to be interminable.

Both problems can be mitigated by learning the power of frequency, as defined in the classic book by Jocelyn K. Glei, “Manage Your Day-to-Day,” which asserts that working consistently and frequently on something makes it possible to accomplish more, with greater originality, than spasmodic bursts of effort. A successful startup needs to be a daily task, with consistent focus.

I suggest that the following key reasons from Glei for how the habit of frequency fosters both productivity and innovation in general, apply especially well to an entrepreneur starting a new business:

  1. Frequency makes starting easier. Getting started is always a challenge. It’s hard to convert an idea into a business, and it’s also hard to get back into the groove with all the distractions of other activities and your “real job.” If you block out time every day to focus on your startup, you keep your momentum going, and start seeing long-term progress.

  2. Frequency keeps insights current. You’re much more likely to spot opportunities for innovation and to see new trends in the marketplace, if your mind is constantly humming with issues related to the startup. Frequent discussions with peers and customers on open questions will keep you from being led astray by your own biases.

  3. Frequency keeps the pressure off. If you’re producing just one page, one blog post, or one sketch a week, you expect it to be good and final, and you start to worry about quality. It’s better to write 100 lines of new code every day, recognizing that you will have to iterate to perfection, rather than expecting a week of work to happen all in one night.

  4. Frequency sparks creativity. You might be thinking, “Having to work frequently, whether or not I feel inspired, will force me to lower my standards.” In my experience, the effect is just the opposite. Creativity arises from a constant churn of ideas, and one of the easiest ways to get results is to keep your mind engaged with your project.

  5. Frequency nurtures frequency. If you develop the habit of working frequently, it becomes much easier to sit down and get something done even when you don’t have a big block of time; you don’t have to take time to acclimate yourself. The real enemy of progress is the procrastination habit, which should be replaced with the frequency habit.

  6. Frequency fosters productivity. It’s no surprise that you’re likely to get more accomplished if you work daily. The very fact of each day’s accomplishment helps the next day’s work come more smoothly and pleasantly. By writing just 500 words a day in a blog, I suddenly realized that I had enough for a book in just a few months.

  7. Frequency is a realistic approach. Frequency is helpful when you’re working on a startup idea on the side, with pressing obligations from a job or your family. It’s easier to carve out an hour a day, than to set all else aside for a week in the early stages of your startup.

Don’t be like many of the people that we all know who feel like they are working at a breakneck pace all day, every day, but have very few tangible results to show for their efforts. Every entrepreneur needs to build a proactive daily routine, while being able to field a barrage of messages, and still carve out the time to do the work that matters.

Another enemy of progress in startups is the curse of perfectionism. Some entrepreneurs never start, waiting for that ideal moment, when there are no distractions. Some are lost in the middle, obsessing over every step, and some never finish, always refining and adding, rather than learning from a minimum viable product. Thus the need to combine frequency with pragmatics.

If you can manage your day-to-day routine with frequency, rather than let reactive chaos manage you, you will find that your creative mind is sharpened, and your focus on the new venture will generate the “change the world” results that attracted you to this lifestyle in the first place.

Marty Zwilling

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Saturday, July 7, 2018

Conscious Capitalism Drives Winning Businesses Today

ConciousI’ve noticed that most young entrepreneurs are more socially conscious today than ever before, which is a great trend. Unfortunately, some are so focused on this principle that they forget that every business, even nonprofits, have to practice the basic principles of capitalism (build a business model to make money) to cover their costs to do good things another day.

Examples of profitable companies practicing this model include Trader Joe’s, led by Doug Rauch as retired president, now co-CEO of Conscious Capitalism®, and the Container Store, built by Kip Tindell. Both of these are purpose-driven businesses that boast high growth, high loyalty, and very low employee turnover. You can find dozens more on the Conscious Capitalism web site.

Of course a profitable model isn’t required if you intend to rely totally on donations, or have deep pockets to fund your socially conscious efforts yourself. Conscious capitalism is the rational alternative approach, dedicated to advancing humanity, while using tried and proven business principles. The idea has four principles guiding and underlying every business:

  1. Higher purpose. Business can and should be done with a higher purpose in mind, not just with a view to maximizing profits. A compelling sense of purpose creates an extraordinary degree of engagement for all stakeholders and catalyzes tremendous organizational energy.

  2. Stakeholder orientation. Recognizing the interdependent nature of life and the human foundations and business, a business needs to create value with and for its various stakeholders (customers, employees, vendors, investors, communities, etc.). Like the life forms in an ecosystem, healthy stakeholders lead to a healthy business system.

  3. Conscious leadership. Conscious leaders understand and embrace the higher purpose of business and focus on creating value for and harmonizing the human interests of the business stakeholders. They recognize the integral role of culture and purposefully cultivate a conscious culture.

  4. Conscious culture. This is the ethos – the values, principles, practices – underlying the social fabric of a business, which permeates the atmosphere of a business and connects the stakeholders to each other and to the purpose, people and processes that comprise the company.

I see conscious capitalism emerging at just the right time – for young entrepreneurs who are a bit disillusioned with the image of “business” today, but want to be profitable without sacrificing trust, reputation, and credibility with their peers and stakeholders important to them. They want their business potential to support the overall human potential as well.

None of these positives obviate the need for a viable business model, in order to survive. I would expect that to seem intuitive to all entrepreneurs, but every investor I know has many stories about startup funding requests with no clear business model. The most common failures are solutions looking for a problem, lack of a defined market, and giving away the product.

Soon, companies that also want legal recognition of their socially conscious focus will be able to incorporate as a Benefit Corporation (B-Corp). The B-Corp status, already available in thirty states, including New York and California, is meant to reduce investor suits, and gives consumers an easy way to spot genuine social commitment, without assuming it is a nonprofit.

Entrepreneurs and startups are all about innovation, in business principles as well as in products and services. I see conscious capitalism as a great innovation to the foundations of capitalism, bringing compassion and collaboration to the heart of value creation. Maybe it’s time to take a hard look at your own startup, and see if you have fully and consciously capitalized on capitalism.

Marty Zwilling

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Friday, July 6, 2018

How To Become A Lifelong Learner In A World Of Change

lifelong-learnerAs a new business advisor, I often meet aspiring entrepreneurs looking for that magic formula for success. I tell them that success in today’s rapidly changing environment simply means learning and adapting faster than your competitors. There are no static rules, or constant states to strive for. Yet the fact is that most of us are very bad at learning, since it implies risk and failure.

It’s easy to say that the best business leaders never stop learning, but it’s harder to put specifics behind this process. I found some help on the steps in a new book, “Never Stop Learning,” by Bradley R. Staats. From the Flagler Business School, he brings a great combination of the latest research in behavioral science with engaging stories that demonstrate real learning in business.

I will paraphrase his key points here, adding my own insights on how they relate to business people and situations that I have encountered over the years:

  1. Continuous learners are willing to fail in order to learn. As Mark Zuckerberg once said, “in a world that is changing really quickly, the only strategy that is guaranteed to fail is not taking risks.” Steve Jobs and Walt Disney are two entrepreneurs who took risks but failed multiple times, before achieving their legacy as winners in the world of business.

    Don’t expect failure not to hurt, like you have just lost your child. But then, you realize that the pressure to find success is replaced by the freedom to begin again, having learned from your mistakes, and be less afraid of uncertainty. Just don’t make the same mistake twice.

  2. Focus on the process rather than the desired outcome. Focusing on the outcome too soon is misguided, because you may have no idea how to get there. Better to take one process step at a time, with failure and learning at every step. Multiple small successes are key to the long-term motivation and determination needed to reach visible success.

    Bill Gates wanted a personal computer on every desktop, but he kept his focus on motivating and supporting one application developer at a time. Eventually this momentum attracted more and more end users, until he achieved his desired outcome.

  3. Don’t be afraid to ask questions rather than rush to answers. Dynamic learners recognize that “I don’t know” is a fair place to start – as long as you quickly follow with a question and some research. The scientific method, and all kids, understand that all learning starts with a question. People rarely learn anything new while giving answers.

  4. Take time for reflection and relaxation. Fight the urge to act for the sake of acting and recognize that when the going gets tough, the tough are recharged, and take time to think. Too many of the entrepreneurs I meet feel too busy to think before acting. The result is that they repeat their mistakes, and hope for a different outcome each time.

    I’ve worked with several talented entrepreneurs who refused to slow down, rest, or delegate in their drive to beat competition. Eventually each lost their health, or failed to learn from mistakes, to the point that their business suffered or could not keep up.

  5. Stop trying to conform – be yourself and willing to stand out. When you are truly yourself, this gives rise to positive emotions, and you are more likely to be motivated to expend the necessary effort to learn. Conforming to other’s expectations makes you a follower, not a leader. Being a follower puts you at the losing end of competition.

  6. Don’t try to fix weaknesses - play to your strengths. Most entrepreneurs believe they need to excel on all dimensions to achieve long-term success. They forget that business is not a one-person operation. The best strategy is to build a team with complementary, but not redundant, skills. For example, technical entrepreneurs should focus on the product, and find a partner with deep experience in finance or marketing. Each can then learn from other’s strengths, for a winning whole.

  7. Build a portfolio of experiences – both deep and broad. Accumulating experience in a specific skill improves performance, but at a decreasing rate. Variety is more productive. If tasks are related, knowledge transfers for one area to another – and becomes a learning accelerator. Use both specialization and variety as powerful learning tools.

  8. Recognize that learning is not a solo exercise. Business is the ideal environment to learn from others – advisors, investors, your team, customers, and competitors. Two-way relationships are crucial, since helping others to learn is a pre-requisite to self-learning. Be sure to put aside your biases and ego to more effectively learn from others.

As an occasional angel investor, I find that solo entrepreneur startups rarely get funded. Very few inventors also have deep business strengths. The ideal co-founder team is one with deep technical skills, and the other with requisite business and financial strengths.

Living in today’s learning economy means that all of us in business must approach learning with four mindsets: focused, fast, frequent, and flexible. Learning must be never ending, and anyone can master the process. Don’t be your own worst enemy, and be too busy or lose the will to learn. Learning is the only way to stay relevant, reinvent yourself regularly, and thrive in business today.

Marty Zwilling

*** First published on Inc.com on 06/22/2018 ***

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Wednesday, July 4, 2018

5 Reasons To Love Independence, And A Few Challenges

independence-day-2018For all entrepreneurs, starting a business is the route to “life, liberty, and the pursuit of happiness,” no matter how risky. It’s the American dream that has been the goal of people in this country for over 240 years. If you are here in the U.S., I hope you are all able to take some time off this holiday period, to contemplate what you do, and why you do it.

According to a classic article and poll by Startups.co.uk, having the independence to make your own decisions is considered the key benefit of being an entrepreneur. Nearly 90 percent of respondents said decision-making independence was very important, closely followed by more flexibility for a better work/life balance. Job creation and innovation are the results, not the drivers.

Personal satisfaction also ranked close behind, with 70 percent of respondents claiming it was a key advantage to running their own business. Contrary to popular belief, most business owners did not start a business just to earn more money. Only 32 percent of entrepreneurs cited money a key benefit of running their own firm. This indicates that lifestyle and satisfaction factors are often more important than financial ones.

As with everything in life, there are advantages and disadvantages to every choice we make. Choosing entrepreneurship is no exception. Beyond the obvious advantages mentioned above, there are some additional advantages that get mentioned often.

  1. Challenge of originality. A good entrepreneur feels the incentive to offer a new service/product that no one else has offered before. That’s the same challenge an artist feels on every new canvas, or every musician feels when composing a new work.

  2. High level of excitement. Entrepreneurs love the continuous challenges of a startup, and the satisfaction of solving them. Some are so high on this life, that they hate the fact that they have to "waste" part of their life in sleep!

  3. Minimal rules and regulations. Work in a conventional job is often difficult to get done because of all the "red tape" and consistent administration approval needed. With a startup there are no rules, until you make them.

  4. Flexible work hours and conditions. Entrepreneurs can schedule their work hours around other commitments, including spending quality time with their families. Many love working from their home or garage, in casual clothes, serenaded their by favorite music.

  5. Beat the competition and discover yourself. Competition drives innovation, and innovation drives competition. The cycle never stops. But the best part is that ultimately entrepreneurship isn’t a race against others but an opportunity to discover your potential.

Of course there are some challenges that every entrepreneur knows all too well:

  1. No regular paycheck. Starting your own business means that you must be willing to give up the security of a regular paycheck. In fact, most startup founders work for no salary during the first year or two of company operation.

  2. Few paid benefits. There will likely be no medical and dental benefits, and no vacations or other perks during the formative years. Don’t expect a staff to do the accounting, handle correspondence, or even clean the bathrooms.

  3. Decision responsibility. All the decisions of the business must be made on your own, better known as “the buck stops here.” This may sound like an advantage, but is actually a major source of stress and loneliness for startup CEOs.

  4. Staffing challenges. Hiring and firing decisions are hard, and that’s just the beginning. Often times, you will find yourself working with people who "don't know the ropes" and require extensive coaching and assistance. Then you have to deal with the mistakes.

By definition, if you see the rewards here as outweighing the risks, you are an entrepreneur. So you should fully appreciate the independence factor fought for so hard by our forefathers. I hope you have had time this week to savor the dream. You earned it, and you need the rest.

Marty Zwilling

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Monday, July 2, 2018

9 Leadership Styles That Will Define Your New Venture

adult_businesman_leadershipEntrepreneurs inherently understand that they have to be the initial leader of their startup, but often they don’t have the experience or the training to know where their leadership competencies lie, or how to build a leadership team. For new entrepreneurs, leadership development efforts may be more valuable for achieving startup success than business skills development.

Very few people know their own leadership style, or strengths and weaknesses, despite their many years of living and working in the real world. To assess where you are, and to unlock your full potential, there are many courses available, as well as seminars and gurus, but a good place to start is a book on the subject, like the classic one from John Mattone, “Intelligent Leadership.”

Mattone has a wealth of insights, based on years of helping Fortune 500 leaders overcome their self-imposed limiting leadership habits. He identifies and distinguishes between nine distinct leadership styles that I see in all entrepreneurs to some degree. The most effective entrepreneurs know their own predominant style, and how to build a team with all the rest required:

  1. Helper. Mature Helpers are considerate and genuinely the most sensitive and caring of all the leadership types. They are excellent mentors and coaches, but have a strong need to be admired and respected in return. Strengthen this trait by being more conscious of your need to be liked, and don’t be possessive or controlling.

  2. Entertainer. Entertainers gain the respect of others with drive, determination, hard work, and the ability to win over people. But they can become fixated with appearing successful, showing more style than substance, or undermine themselves by exaggeration, inflating their importance, or trying to win or one-up all the time.

  3. Artist. Artists are perhaps the most creative and innovative leaders. They tend to move people deeply, and bring out the most in people. As they become more mature, they draw less inspiration from themselves, and more from others. Improve your artist side by avoiding negativity, procrastination, and focus on self-discipline.

  4. Thinker. Thinkers like to analyze the world around them, and may prefer thinking to doing. Mature Thinkers quickly understand problems, can explain them to others, and make sound and logical decisions. Strengthen this trait by not jumping to conclusions, seeking advice, and working cooperatively with others you trust.

  5. Disciple. Disciples are able to form strong and cohesive work groups, but sometimes appear incapable of action without permission of an authority figure or belief system, and don’t seek out leadership positions. This trait can be strengthened by accepting accountability, reducing reaction to stress, and cutting ties to authority.

  6. Activist. Activists are good at lifting the spirits of team members and managers, and are usually optimistic and confident. They tend to bury themselves in activities, but can be impulsive and select quantity over quality. Improvement efforts would include listening more to people, thinking about details, and learning to say no.

  7. Driver. Drivers are the most openly aggressive leaders, who enjoy taking charge, and can make things better with their immense self-confidence. Unfortunately, they may feel the need to dominate every situation, and make every decision. Mature ones act with more self-restraint, let others win, and work with others.

  8. Arbitrator. Arbitrators tend to be the most open of all types. What you see is what you get. They find ways to bring people together, and ways to involve everyone. To be a better Arbitrator, you need to be more assertive, more open, share your feelings, and work on developing your listening skills.

  9. Perfectionist. Mature perfectionists are capable of being highly noble leaders, with their deep sense of right and wrong and ethical principles. They are usually highly critical of themselves and others, and often frustrated by reality. To improve, they need to learn to relax, listen to others, and remember that no one is perfect.

In all cases, to reach your highest leadership potential, you have to stay true to yourself, rather than trying to conform to other people’s images of the best you. If you truly commit to learning more about yourself and becoming the best that you can be, while possessing a great attitude, you will discover that all challenges are really the seeds of opportunity.

Most recognized entrepreneur leaders admit that their biggest challenge was to break through their self-imposed limiting thoughts, emotions, and habits, to reach the next level. How many of these leadership traits have you mastered, how many are you working on, and how many of the other strengths have you built into your team to help you? That’s intelligent leadership.

Marty Zwilling

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Sunday, July 1, 2018

7 Mistakes To Avoid In Forming A New Venture Board

Steven_Koonin_board_meetingMost entrepreneurs avoid setting up a board of directors for their new business unless or until they sign up an investor who demands a seat on the board. That implies that a board of directors has no value to the founder, and is just another burden that to be assumed for the privilege of attracting outside investors or going public. In my view, nothing could be further from the truth.

Especially for entrepreneurs who have not built and sold companies before, and need this startup to be an attractive acquisition or IPO target in a few years, I can’t think of a better way to enlist outside experts and keep them motivated to help you meet the challenges of a startup. High-performing startups today are the ones that use every resource at their disposal.

Of course, if the board is set up or used incorrectly, the impact can indeed be more negative than positive. In her classic book “Corporate Concinnity in the Boardroom,” board expert Nancy Falls outlines the most common mistakes with boards, and I believe several of these apply to startups as well as to more mature companies as follows:

  1. Have too many or too few board members. Size does matter. I recommend three or five members to start (an uneven number prevents tie votes). Too many members are difficult to schedule and manage, and cost too much. Less than three is not a board. Members should be compensated, starting at one percent of stock or a small retainer plus expenses per quarter. Their value will be well worth the investment.

  2. Avoid outside independent directors. Outside directors bring new input to the table that offers invaluable context to your hyper-focused inside officers. The objective is a balance of skills and interests to optimize the growth and success of the business. Friends and family may tell you what you want to hear, but not what you need to hear.

  3. Expect the board to always support management. A small number of board members have to represent the divergent views of all constituents (be a representative democracy). In fact, the primary function of the board is to be the boss for the CEO, setting clear goals, measuring performance, and providing business governance.

  4. Have the wrong management representation. In startups, where the CEO is usually the founder and major shareholder, it is normal for the CEO to chair the board. At most, one other senior insider would be appropriate, but a board that is dominated by insiders or family members with minimum business experience is generally not effective.

  5. Maintain too little diversity. As globalization and the shifting demographics of markets and the workforce make startups more dependent on diversity, a board built on homogeneous relationships has the inherent risk of insularity. Pick your outside directors, not only on ownership or relationship, but also on experience in the world you know least.

  6. Fail to establish adequate structure. Every board needs a playbook to bring clarity to the roles and responsibilities of the board itself. Board rules and governance policies should be articulated in writing and voted upon. The board should meet at a minimum of four times a year with a quorum present, or more often for critical issues.

  7. Lack commitment and trust in board recommendations. A culture of mutual trust, respect, and commitment must be set from the beginning and from the top. Board members in constant conflict can kill your company more quickly than any market forces. Members don’t need to all like each other, but they do need to respect one another and be committed to working together for the betterment of the business.

If your startup is not quite ready for a formal board of directors, then I would recommend you start with the less formal advisory board. An advisory board is a small group of mentors that have specific industry knowledge and connections and bring their consultative expertise to the CEO in much the same way as a formal board, but without any formal roles or associated liabilities.

Thus the biggest mistake any new entrepreneur can make is to believe that a board of advisors or a board of directors will only slow them down. It’s never too early to bolster your leadership strength with experienced partners inside the organization, and professional advisors who can take the larger view. It’s a complex competitive world out there, and learning is a full-time role.

Marty Zwilling

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Saturday, June 30, 2018

5 Principles For Driving Revenue, Not Just User Count

unicorn-startup-valuationsSome analysts argue that revenue drives growth, while others say user growth drives revenue. Both have worked. Google reached $1B in revenue within five years of incorporation, and now has a market capitalization of over $800B. Twitter showed no focus on revenue in the first five years, but was able to parlay 500M users into a $25B public company, now growing revenue.

Every startup dreams of achieving that milestone, when they can focus more on scaling the business and enjoying their earnings, rather than fighting for another investment infusion. Most are still confused about the right priority. Should they focus on increasing revenues and profitability, or entice more and more users with “free” services, to increase their valuation.

Traditionally, it was simple. A business only achieved critical mass by becoming cash-flow positive. Revenue growth (top line) then had to be converted into profit growth (bottom line), before a business was deemed to be self-sustaining and worthy of public investment.

It’s only been in the last decade or two, that social media companies, like Facebook and Twitter, have achieved market valuations in billions of dollars (unicorn status), while clearly sacrificing revenue to gain users. In my view, the pendulum is swinging back, with investors looking more for the traditional indications of business integrity, stability, and growth:

  1. Some element of organic growth is a good thing. The purest form of capitalism has always meant charging a fair price and making a fair profit. Re-investing profits to grow the business is organic growth. The concept of free goods and services to get you hooked, financed by deep pockets, or advertising, seems marginally ethical to many.

  2. Long-term stability requires revenue growth and profit. Most modern investors still look for a business model that embodies a gross margin over 50%, and a net margin in the 20% range. A healthy business, ready to scale, has been doing this for a year or more, with an existing customer set generating a non-trivial and growing revenue stream.

  3. High customer loyalty and high team passion. Startup productivity is embodied in key ratios, including low cost of customer acquisition, high retention, and high revenue per employee. High customer churn and lackluster team members are still indicators of a high-risk investment opportunity, to be avoided by both public and private investors.

  4. Growing appreciation for the value of the solution provided. These days, you need customer evangelists who see the value and will pull in their friends through viral actions to keep the business growing. Too many of the high user growth startups have been fads, and numbers can go down as fast as they go up, as per Friendster and MySpace.

  5. Understanding competitive early mover requirements. First movers in a new space need users more than revenue to maintain market share, so investment pitches need to highlight this priority in requests for funding resources. More complex and defensible businesses should highlight their organic drive to profitability and brand leadership.

Unfortunately, the Internet and heavily funded startups have nurtured a customer expectation of free web services and free smartphone apps. In these domains, it is now difficult to monetize at all until you have a large critical mass of users. In these cases, growth scaling is important, both before and after revenue flow begins. The business plan must reflect both growth phases.

Thus even after a startup has achieved a critical mass of users, the expectation of long-term revenue growth and profitability does not go away. Twitter is facing this challenge right now, as the large majority of public investors expect a near-term financial return on their investment, every quarter of every year.

So a higher focus on user growth may be necessary early, but is never sufficient. If you are in it for the long run, don’t forget the basic business principle that if you lose money on every customer, you can’t make it up in volume.

Martin Zwilling

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Friday, June 29, 2018

10 Key Insider Rules for Every New Venture Founder

warren-buffett-straight-talkAfter many years as a mentor to aspiring entrepreneurs, and an occasional angel investor, I realized that new venture founders all seem to stumble on similar pitfalls, despite my best efforts to steer them to smoother routes. Of course, I would never say never, and passion does overcome many obstacles, but it still pays to learn from a few key lessons of others before you.

You may not be ready to absorb all one-hundred insider rules I found in a new book, Straight Talk For Startups, by Randy Komisar and Jantoon Reigersman, so I’m offering here a selection of my top ten from their list, adding my own insights. For the rest, these authors come with a wealth of startup and venture capital experience, with real-life examples to back up all their rules:

  1. Starting a venture was never easier – succeeding never harder. In the early days (20 years ago), most new e-commerce businesses, for example, cost a million dollars to set up. Now the price is closer to $100 if you are willing to do the work yourself. But “easier” brings more new startups, with more competition determined to rise above the crowd.

  2. Aim for an order-of-magnitude improvement. Make sure your idea has real customer value, a large opportunity, and a sustainable competitive advantage before you start. “Nice to have” or a ten percent cost advantage alone doesn’t make it these days. To get investor and customer attention, you need a tenfold improvement in cost or function.

  3. Know your financials and interdependencies by heart. Most of the tech entrepreneurs I know pay minimal attention to the financials. They assume that “if we build it, they will come.” Early investors expect you to explain five year revenue projections, gross margins, and break-even. At rollout, you need to add cash flow and customer acquisition.

  4. Net income is an opinion, but cash flow is fact. A large customer like Walmart will provide a large net income, but can easily kill you with cash required for inventory and receivables cycles. I recommend that every startup CEO sign every check personally, and be miserly in managing payables and expenses. Out of cash means out of business.

  5. Don’t accept money from people you don’t know well. Many entrepreneurs argue that the color of the money is the same from all sources. They fail to realize that investors are like spouses, requiring chemistry and a complementary win-win relationship for long-term success. Take your time courting investors, and get views from peers and advisors.

  6. Avoid professional investors unless you absolutely need them. If you don’t want a boss, don’t look for an investor, since they can be the toughest boss you ever had. Fund it yourself and grow organically to avoid the cost, pain, and time of finding angels or VCs, and keep control and equity for yourself. Over ninety percent of startups today are self-funded, or use only friends and family.

  7. Don’t let a short-term fix become a permanent mistake. Crowdfunding, for example, may seem like a good fix for initial funding, but usually precludes professional investors later if needed to scale the business. The same is true if you accept unusual valuations or term sheet options to close a specific deal. Every investment has long-term implications.

  8. More ventures fail from indigestion than starvation. Raising too much money can be a curse. Early ventures with too much cash lose focus and are reluctant to pivot. Founders should ask for funding in stages, as the venture builds momentum, decreases its risks, and increases valuation. Hungry entrepreneurs are always the most creative.

  9. The founder should choose the best CEO available. Most often, new venture founders are the solution builder, visionary, and the first CEO. Yet many don’t have the interest or experience to scale the business. Don’t let your ego prevent you from stepping into a better fitting role as the business evolves. It’s more fun than failing or being pushed out.

  10. Choose an exit strategy - don’t wait for it to find you. The best exit for most startups these days is to be acquired by a major player, rather than going public (IPO), or staying private too long. It’s best to start early in courting potential acquirers or investment bankers, rather than waiting for them to swoop in and knock you off your feet.

In addition to these rules, I also want to second the cardinal rule that every entrepreneur needs to be able to explain why the proposed new venture is important to them, to others, and worth all the blood, sweat, and tears that will likely be involved. Only then will I believe that you that you have the potential to beat the odds and change the world, and have some fun at the same time.

Marty Zwilling

*** First published on Inc.com on 06/14/2018 ***

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Wednesday, June 27, 2018

7 Steps To Building A Highly Engaged New Venture Team

engaged-new-venture-teamEntrepreneurs need to be effective team leaders, since no one can transform an idea into a product and a business without some help. Unfortunately many founders I work with as a mentor are experts on the technical side, but have no insight into leading a team. But fortunately, team building is a skill that can be learned and practiced, for those willing to put in some effort.

The only real alternative is to find a co-founder who can build and lead the team, while you focus on the product. Otherwise, in my experience, the startup will fail. The importance and the specifics of practical team leadership were re-confirmed to me recently in the classic book, “Unlocked,” by Robert S. Murray, who is a recognized expert in the field of business leadership.

I recommend his checklist as a starting point for developing team connections and building engaged team members as a key step in becoming an effective team leader, even if your team is spread all over the country:

  1. Consciously reduce time spent on outside activities. You won’t be viewed as the team leader if you spend most of your time on activities that are not relevant to your team. Being visible and engaged on a random part-time basis, due to other jobs, won’t do it. If your team has trouble finding you, you won’t make productive connections.

  2. Be compulsive about scheduling time for your team. Even busy entrepreneurs need to schedule regular and predictable times which will be devoted only to working and interacting with the team. Possibly an hour in the morning and an hour in the afternoon may be enough, if you make it happen consistently.

  3. Maintain a weekly “huddle meeting” with the entire team. This can even be done remotely via Skype, but it’s important that every team member attends. You need to listen as each summarizes their accomplishments for the last week, and their plan for the week ahead. Leadership is making sure they have resources and understand the strategy.

  4. Have monthly reviews with each team member. Team members need and crave feedback, much more frequently and informally than the annual performance review. I recommend scheduled monthly 30-minute informal checkpoints, as well as quarterly updates on objectives and performance. Ask what you can do for them in every review.

  5. Practice leadership by walking around (LBWA). I personally have found this to be one of the most effective ways to find out what is going on, as well as an opportunity to provide feedback on strategy and direction. Go for walks every day and stop at people’s desks. Ask them what is going on, both in the team and outside of work. Listen.

  6. Recognize team members for individual efforts. Communicate individual results as well as team results to everyone. Most leaders don’t say “thank you” enough. Recognition in front of peers is often more motivating that monetary awards. This is the time to talk about wins with customers and what is coming on the horizon, and the team role in each.

  7. Be real and authentic in every interaction. If you are not, your team will see right through it and you will be worse off than if you stayed locked up in your office. Make sure you’re treating all team members as you would want to be treated. Be genuinely interested in learning something new every day from your team, and they will follow you.

The value of startup teams with the founder as an effective leader is many times the value of many strong individuals working independently. It’s not only your connection with the team, but their connection with each other that is critical. Only a dedicated leader can spot those special powers in each member and then build a well-oiled team which can win the startup war for you.

The result is not only more productivity, but also a startup where everyone loves to contribute, and the whole team feels the energy and satisfaction of accomplishing your dream. Now your personal leadership becomes business leadership, which can actually change the world.

Marty Zwilling

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