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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Monday, June 25, 2018

Make Your Total Customer Experience Your Winning Edge

total-customer-experienceThrough the Internet today, it’s easy to find and compare the technical specifications for every solution in the world that claims to solve your problem, and there will be many. Most often the differentiators go beyond the product, into the ease of ordering, delivery, customer reviews, and finding your options. Your overall customer experience will trump product features every time.

For example, Zappos has been winning customers for years with their ease of product selection, shipping speeds, and personalized customer service. People post reviews talking about their delightful experiences, more than the perfect product. Zappos is recognized as a winner in the design of the whole customer experience, more so than the design of their shoes and clothing.

Thus every entrepreneur and inventor needs to understand and focus as much on the principles of customer-centered business design as applying technology to create a customer solution. These principles are well documented by thought leaders and key standards organizations on the Internet, but are too often ignored by the aspiring entrepreneurs I advise:

  1. Total design begins with an understanding of the customer view. This must cross the boundaries between product, demographics, marketing, culture, and other disciplines. In a non-technical sense, it requires multi-disciplinary skills and perspectives, and always supplements technology-driven design and environmentally sustainable design.

    Tesla and Elon Musk hit this point well when they eliminated the auto-dealer negotiation stage from their car-buying experience—to make it actually pleasurable, by placing Tesla stores in malls and letting people order their cars online.

  2. Factor in all customer tasks, employee tasks, and the environment. The objective is to build a win-win relationship between all people involved in selling and supporting the solution, as well as a positive impact on sustainability and the environment. This requires people on your team who have real-world experience, as well as design training.

  3. Engage real customers for requirements and ongoing feedback. With interactive social media, as well as high-bandwidth video tools, there is no excuse for not involving real customers, and prospects who fit the desired demographic. In addition to these, you apply common tools, such as field research, user groups, questionnaires and interviews.

    Check out Starbucks Reserve, launched by coffee company Starbucks in an effort to engage more meaningfully with customers looking for unique experiences. Customers on social media asked for a more multi-sensory coffee experience, to watch freshly roasted beans arrive, chat with coffee specialists, and experience coffee brewed multiple ways.

  4. Evaluate results in multiple localized customer environments. No matter how thorough your research, it is highly likely that some localization will be required for different environments and cultures. Your challenge is to design and deliver global solutions that have total relevance to every local market in which you operate.

  5. Make sure customer-facing employees are trained and motivated. Even the best process designs won’t succeed unless your team has the training, empowerment, and motivation to make them work. Define metrics which properly reflect the total customer experience, rather than one aspect, such as sales volume, or support issues closed.

    Zappos, for example, places such a premium on employees with the right training and attitude that they put new hires through an immersive four-week training program. They also offer a $1,000 “bonus” to quit at the end of the first week if a new employee does not feel committed.

  6. Use innovation and iteration to continually improve the total design. Customer needs and expectations change over time, driven by economic conditions and competitive alternatives, so customer-centered design must be a continuous process, rather than a one-time event. Define full customer experience use cases for continuity.

Most new customers now are mobile or digital first as a result of the devices and apps that shape their lives. These products with their instant access anywhere have reshaped their expectations and decision making, and should reshape your experience design considerations. You must build on these customer changes, rather than ignoring them.

If you are looking for a competitive advantage, creating a memorable total user experience is the only place to start. Too many existing companies have evolved into silos of expertise, which make customer-centered design difficult, if not impossible. As a new business, you have the opportunity to take the lead, and become the world’s next super-brand. Now is the time to start.

Marty Zwilling

*** First published on Inc.com on 06/12/2018 ***

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Wednesday, June 20, 2018

10 Business Strategies From Self-Made Millionaires

Jeff_Bezos_2005Many of the entrepreneurs and new business owners I advise have a primary vision of becoming millionaires or greater, per the model of Facebook’s Mark Zuckerberg, Amazon’s Jeff Bezos, and many others. They don’t realize that achieving this dream involves far more than having a great idea and making it happen. In fact, much of the success will have nothing to do with money.

In my experience, and the view of most experts, the journey has to begin with the right mindset, attitude, people skills, cash management, and other good habits. I saw a good summary of these requirements in a new book, “What Self-Made Millionaires Do That Most People Don't,” by Ann Marie Sabath, who interviewed dozens of real millionaires to better understand their practices.

While her focus was not specifically on entrepreneurs, I have highlighted a subset of her identified priorities for creating your own success that I have found to be particularly relevant and most often overlooked by aspiring self-made business millionaires:

  1. Think bigger, and begin with a memorable end in mind. Maybe it’s just me, but I seem to hear too many “great” ideas in the realm of finding the nearest bar via a smart-phone app, or a dating site for your pets. Self-made millionaires tend to start with a solution to a painful problem that can change the world, with a billion dollar opportunity.

    Force yourself to think bigger by scheduling some uninterrupted thinking time and overtly stepping outside your comfort zone to entertain the impossible. It helps to start by writing down initial goals and objectives, and then reading them with a critical eye for impact.

  2. Develop a business from what you know and love to do. I often hear aspiring entrepreneurs determined to start their own business just because they don’t like working for someone else. These people are not likely to become self-made millionaires. What I want to hear is a business you enjoy doing so much that you wouldn’t even call it work.

  3. Set purposeful goals and take full control of your destiny. I don’t know any self-made millionaires who don’t know where they are going, or play the perennial victim. For you to have any chance of creating and achieving goals, you need to identify your strengths, have a positive sense of self, and avoid “analysis paralysis.” Don’t be afraid to start.

  4. Take calculated risks, and persevere through failures. Taking a calculated risk implies going that extra mile to evaluate the costs versus reward probabilities before jumping in with both feet. In addition, many startups fail simply because the entrepreneur fails to persevere and gives up too soon. Failures are the best learning experiences.

  5. Maintain a thirst for knowledge, and be a lifelong learner. The learning curve for successful business people actually has been shown to go up after formal schooling, rather than flattening. They do things like scheduling time every day for thinking, using down time while driving for podcast updates, and building new relationships with experts.

  6. Develop effective listening and questioning skills. It’s hard to learn anything while you are talking. With all the distractions at our fingertips today, the art of listening and asking good questions is on the decline. Tips for more effective listening include staying in the moment, using positive body language, and waiting to be asked for advice.

  7. Develop relationships with like-minded and smart people. Self-made millionaire entrepreneurs make a point of surrounding themselves with people smarter than they are, and with people they aspire to be like. They hire help, rather than helpers. They build teams of smart people to solve problems, rather than making every decision themselves.

  8. Be more innovative and embrace change. Successful business people know they have to reinvent themselves and their business on a regular basis as the market and technology changes. Rather than resisting every change, they figure out what caused it and move forward by creating a solution that capitalizes on the new opportunity.

  9. Stay in control of your financial destiny. The first rule for a successful business is managing cash flow personally. Too many entrepreneurs I know leave these decisions to their staff, who focus only on their own expenses and purchases. Self-made millionaires don’t forget to pay themselves first, build an emergency fund, and pre-plan purchases.

  10. Enjoy the journey as much as the destination. The best entrepreneurs live for the problem-solving challenges of growing a business, and enjoy their ability to support a favorite social cause, or improve the world environment. Of course, they enjoy the money that comes with success, but that is secondary to their passion for their work and impact.

The bottom line is that there is nothing wrong with making money – in fact, it’s a necessary, but not sufficient result, for any business to thrive. The same is personally true for every entrepreneur and business owner.

Now is the time to take a hard look at your own priorities, relative to the strategies presented here. With all of these, you may be able to skip over millionaires directly to billionaire status, like Bill Gates and the other 2000 people already there. Wouldn’t that be exciting?

Marty Zwilling

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

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Saturday, June 16, 2018

6 Key Components For Success In Your New Business

failure-growth-businessThe best part of being an entrepreneur is having the independence to make your own decisions, the flexibility for a better work/life balance, and personal satisfaction from driving change. But nobody said it would be easy. The road to business success is filled with guidance on how to build and maintain the traction needed to survive and prosper. Of course, experiences and failures are the best challenges and frustrations that most aspiring entrepreneurs never even imagined.

In my role as advisor to many startups, I try to prepare them for the inevitable bumps in the road ahead, as well as to provide practical guidance on how to build and maintain the traction needed to survive and prosper. Of course, experiences and failures are the best teachers, but I find that learning from other people’s experiences is a much faster and less painful approach.

In his classic book on building a business, “Traction: Get a Grip on Your Business,” Gino Wickman, a similar experienced business consultant and developer of the Entrepreneurial Operating System (EOS), outlines five common frustrations that we both hear from entrepreneurs, as follows:

  • You are the boss, but you don’t have control. You don’t have enough control over your time, investors, the market, or your startup. Instead of controlling the business, the business is controlling you. By definition, the world of startups today is one of rapidly changing unknowns, where the inputs you receive will often conflict. It’s very frustrating.
  • All the constituents have their own agenda. You continually get frustrated with your team members, customers, vendors, and partners. They all have their own objectives and priorities, and don’t seem to listen, understand you, or follow through with their actions. You only expected that kind of a challenge from your competitors.
  • Persistent profit and cash flow shortages appear. Simply put, there’s frustratingly never enough profit or cash. Even when orders are clearly on the upswing, you need more funding to cover inventory and lagging accounts receivable. Then there are the expenses you never could have anticipated, driving down margins.
  • Constantly bumping your head on the growth ceiling. No matter what you do, you can’t seem to break through and get to the next level. Your growth has stopped, and you feel frustrated and unsure what to do next. You never have the time and resources for International expansion, acquisitions, venture capital investors, or going public.
  • Conventional strategies don’t seem to work for you. You have tried all the popular initiatives and quick-fix remedies, including social media, search engine optimization, and content marketing. None have worked for long, and as a result, your staff has become numb to new strategies. You are spinning your wheels, and need traction to move again.

My first answer to all these frustrations is to step back and focus on the basics. Every great business is made up of a core group of key components. Wickman outlines six of these in his book as the entrepreneurial operating system for success:

  1. Vision – Communicate a compelling image to everyone describing where the business is going, and how it’s going to get there.

  2. People – Surround yourself with great people. You can’t build a great company without help. It’s having the right people in the right seats.

  3. Data – Define a handful of key metrics to free you from managing personalities, egos, subjective issues, emotions, and intangibles.

  4. Issues – Constantly provide updates and direction on the challenges and obstacles that must be overcome to execute on your vision.

  5. Process – These describe your way of completing each key element of your business. Each must be documented clearly and refined regularly.

  6. Traction – Entrepreneurs gain traction by executing well, with focus, accountability, and discipline.

There is no magic here, and none of the six key components is rocket science. In my experience, entrepreneurs who are highly frustrated in their startup have overlooked or have dropped their attention to one of the six basic business components.

Learn from the frustrations of other entrepreneurs, or you are doomed to relive their pain. Put your entrepreneurial operating system in place, and you too can trade in your frustrations and join that select group who enjoy making their own decisions, achieve their work/life balance, and relish the personal satisfaction of their dreams.

Marty Zwilling

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Friday, June 15, 2018

8 Keys to New Venture Funding Success from the Crowd

crowdfunding-todayCrowdfunding has come a long way in the last decade with the Internet and many popular platforms, including IndieGoGo and Kickstarter. In fact, crowdfunding now rivals both venture capital and angel funding as the money source of choice for new entrepreneurs. As a small business advisor, I often recommend it as the best alternative for aspiring entrepreneurs.

But don’t be misled – it is no panacea or shortcut to funding success. According to statistics, more than two-thirds of crowdfunding campaigns do not meet their monetary goal and have to return anything they do collect. That’s not as high as the failure rate with professional investors, but it should convince entrepreneurs that even the crowd requires you to do your homework first.

Based on my experience, and input from the experts I know, here is a quick summary of the key strategies and practices that can be instrumental to your success in your crowdfunding efforts:

  1. Build a support community before launching a campaign. Successful crowdfunding requires anticipation and early momentum, which can best be built by social media, viral videos, and traditional marketing. If you see little traction from these efforts, it may be time to rework your idea before making a bad first impression with the crowd.

  2. Prepare with the same intensity as finding angels and VCs. There is no easy money for funding a business, so prepare with the same planning, prototyping, and dedication you would expect from someone taking your own money. You can’t build and run a crowdfunding campaign in your free time. Seek advice from peers who have succeeded.

  3. Avoid equity crowdfunding if you need multiple rounds. Crowd investors with little or no investing experience can be very high maintenance. Such a messy investor pool will make the company less attractive to subsequent professional investors. Experienced bankable entrepreneurs will find conventional raises have a lower "cost" of capital.

  4. Time your campaign around a prototype, not just an idea. People want to see that you have something before they commit real money. Anyone can come up with an idea, but few can execute. I recommend a polished minimum viable product (MVP), which you can demonstrate in a video, rather than asking people to visualize your solution.

  5. Calculate carefully how much funding you really need to ask for. Asking for too large an amount is the surest way turn people off, and asking for too little will only cause you to fail in delivery. Making something awesome always costs more than you expect, and starting a business is hard. You need just enough of a start to qualify for VC funding later.

  6. Move fast after crowdfunding to stay ahead of competitors. Be aware that potential competitors are monitoring crowdfunding campaigns for market interest and solutions. Your pricing, design and feature list, in addition to your exact launch timing is there for anyone to react to. Successful startups are always working one generation ahead.

  7. Crowdfunding success does not assure business success. Many successful campaigns, including iBackPack, Kreyos Smartwatch, and Ubuntu phone, have failed as a business due to inability to deliver, poor launches, or one of the many normal business challenges. Plan for and keep your focus on business success, not just funding success.

  8. Don’t expect crowdfunding traction for enterprise products. If your solution is aimed primarily at businesses (B2B) versus consumers (B2C), then I recommend more conventional fundraising. Regular people in the crowd are less likely to understand or care about more complex business systems, such as manufacturing or billing.

Thus, even though crowdfunding is here in a big way, and projected by Statistica to grow almost 30 percent annually to reach US$26 billion in 2022, I don’t see crowdfunding replacing or crowding out angels and VCs in the near future. There is just never enough money to feed the startup beast, and it’s always nice to have another a great alternative.

If you want your share, be sure to heed these reality checks, and don’t hesitate to get some advice and counsel from peers and advisors who have been there before you. Very few crowdfunding campaigns lead to the success of the Pebble Watch, or the Oculus Rift acquisition by Facebook for US$3 billion. But if you do the job right, you could still be the next one.

Marty Zwilling

*** First published on Inc.com on 06/01/2018 ***

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Friday, June 8, 2018

7 ‘Best Practices’ Have To Change For Survival Today

IBM-Quantum-ComputingMost companies today claim they are embarked on a transformation to ensure their long-term survival in this era of disruption and rapid change. But in their day-to-day practices, many of their leaders and employees blindly follow the same practices they always have. The results include a rising tide of fading stalwarts, including Sears, Toys R Us, Borders, and Men’s Wearhouse,

Based on my own experience at IBM during the personal computer revolution, I learned first-hand that transformations are a tough challenge. I was impressed to see the issues outlined well in a new book, “Detonate,” by Geoff Tuff and Steven Goldbach, based on their own executive roles with Deloitte Consulting, working with many top clients, and struggling with the same challenges.

I like their summary of the “best practices” that don’t work during today’s disruptive change, and their practical and empowering advice on how to free organizations from old-school practices. With these tips, you can reinvigorate your own and your company’s long-term health with next generation thinking:

  1. Revenue should not be the key thing you worry about. When established companies think of growth, it’s always some function of looking at past revenue, comparing it to “expert forecasts” of projected industry growth, and thinking of how they will increase their revenue share. That is extrapolated to capital requirements, staffing, and profits.

  2. This approach doesn’t work when you need to penetrate new markets to compete. When we at IBM felt the need for PC technology to thrive many years ago, personal computer revenue projections were low to non-existent. Technology and thought leadership are harder to quantify and sell to management, yet are really critical to long-term survival.

  3. A strategic planning cycle is largely a waste of time. Every year on a fixed schedule, most companies task a small group of people to go off-site, juggle financial data, and come back with a strategic plan. Unfortunately, market disruptions don’t happen on schedule. Planning and budget horizons should center on the timing necessary to change customer and employee behavior to achieve new goals in the marketplace.

  4. Syndicating past data alone creates no advantage. The challenge is to look ahead, where there is no data, as well as behind. All your competitors are looking at the same past data, so you need your own proactive market experiments, proprietary trend analysis, and organizational transformations to stay ahead of the crowd and prosper.

  5. Don’t just wait for customers to tell you their needs. Customer inputs are good predictors for incremental needs, but most customers can’t predict transformational events. They may only recognize a good thing when they see it, so they need your experiments, your thought leadership, and your incentives to see new opportunities.

  6. Discard one-size-fits-all risk management systems. Successful companies with proven business models typically use an inflexible risk management process, for incremental changes as well as disruptive technologies. In today’s environment, small step execution and testing are the key, with incremental risk analysis between steps.

  7. Celebrating failure without analyzing the cost is an excuse. Large companies, or even small ones with too much funding, tend to allow a pivot to expand too long before calling it a failed experiment, and celebrating the learning. That’s why small startups have such an advantage when it comes to innovations.

  8. PepsiCo went far overboard in time and money back in 1992 to enter the “new-age beverages” market with its clear, caffeine-free Crystal Pepsi. Webvan spent $800 million expanding before they realized that some cities didn’t have the critical mass to support profitable home grocery delivery.

  9. Embrace impermanence in org charts and team members. Every organization needs to bring a beginner’s mind to the scene on a regular basis. People need new challenges, and organizations need wholesale restructuring to deal with disruptive change. Current organizational design should never be the cause of your actions, or lack of action.

Even with all our team efforts to rethink these debunked best practices, IBM never fully adapted to the personal computer hardware market, and abandoned it after a few years. Yet IBM did learn the emerging value of services and solutions from their personal computer experiments, and have since totally refocused in the services direction for a dramatic business recovery.

It’s probably past time to start a conversation in your organization about some best practices that aren’t working anymore. If you hear answers that sound like “this is the way we’ve always done it,” then it’s time to start blowing up things before your company and your job are on the fuse.

Marty Zwilling

*** First published on Inc.com on 05/25/2018 ***

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Monday, June 4, 2018

7 Best Practices For Winning In Today’s Sharing Model

sharing-economy-best-practicesAs dialogs with peers become easier and more trusted via smartphones and the Internet, people are more willing to share their assets with others, and capitalize on the potential for a quick return for very little effort. This new sharing economy is rapidly becoming the new “online shopping” model, with major winners already including Airbnb (rooms), Uber (rides), and SnapGoods (stuff).

Experts are calling this the “we” economy, instead of “me.” It seems like a simple movement, but like any change in business, there are some new best practices that you need to learn, to make it work for you. Here are tips to keep your business from landing on the failure heap, like Carpooling.com (long-distance ridesharing), Beepi (used cars), and Homejoy (home services):

  1. Provide relationship building opportunities for your customers. Customers today expect two-way relationships with the companies they choose, rather than transactions. To facilitate this, your team must use and embrace available interactive communication modes, including social media, blogging, web site forums, and special events.
  2. For example, on Instagram, Airbnb encourages users to use the hashtag #Airbnb in order to be featured on the company website. If the company likes your picture, it creates a post showing how, in this scenario, city dwellers easily belong to the swimming enthusiast community.

  3. Deliver personalized solutions and memorable experiences. The new demographic wants to provide input, and wants to be treated as one-of-a-kind in their solution, delivery, and service. The days of mass production and commodity pricing as an asset are gone. Being good in business now needs to feel like an art, with creativity and innovation.

  4. Build your market by focusing locally before globally. Narrowing your initial focus actually builds exclusivity and allows you to charge a premium because you are “the expert.” Start with a niche that you know especially well, and build a reputation of being the best. This will give you the credibility to expand to other niches and grow the market.

  5. Uber and Lyft recognized that local regulations are different from region to region, so they launched market by market in order foster loyalty from their customers, maintain quality of the service, and comply with the region's laws.

  6. Develop a culture of innovation and creativity in your team. This requires leadership from the top on purpose and shared goals, and being the model for actively listening to customers and incenting change. Team members need to be taught to think like innovators, and see a reward system that fosters change, rather than punishing failures.

  7. Let people be pulled to you, rather than pushed by marketing. Both customers and employees expect to see value beyond a product or service, especially for social and environmental good, as leading the way forward. The result is an enhanced loyalty, both inside and outside your company, which is a strong component of momentum and profit.

  8. This works especially well for services. In my own blog and speaking engagements, I talk about generic requirements to attract investors, but never mention that I offer a service to assist. Entrepreneurs are incented to followup with me for more specific fee offerings.

  9. Communicate with stories and engaged customer advocates. Personal stories and testimonials are the best way to draw in customers and grow your business. Stories always trump marketing content for improving recollection and understanding. They help people remember in a way that numbers and text on a slide with a bar graph won’t.

  10. Provide value to the community, as well as customers. If you provide real value and give-back to the global community and employees, thus generating trust and loyalty, you will appeal to more customers. The result is the desired win-win situation, with more profits for your business, more satisfied customers, and happy employees at all levels.

  11. For example, Citi Bike is building themselves a great business by providing bicycles everywhere for sharing, but also is enhancing tourism and providing native New Yorkers with a fun and affordable new way to get around town.

The world of commerce has been forever altered by the growth of the world-wide Internet and pervasive mobile telecommunications. The customer and business universes are now globally and intimately connected. This means that all customers see relationships, culture, sharing, and social needs as part of their own world, and expect these to be part of every business focus.

Thus, as the new sharing economy challengers continue to evolve their new business models, the traditional incumbents will be smart to adapt, or forced out of the marketplace. It’s time to take a reading on where your business is in this spectrum. Are your company practices consistent with the ones outlined here, or are you still operating on yesterday’s model?

Marty Zwilling

*** First published on Inc.com on 05/22/2018 ***

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Sunday, June 3, 2018

8 Keys To Recharging Passion And Purpose In Business

Recharge-passion-and-purposeNew entrepreneurs routinely jump into a startup with a full charge of passion and energy, but often find themselves drained of both after a few months by the workload and challenges. As a result, burnout and loss of passion are consistently listed among the top causes of startup failure, according to many experts. The challenge is find ways to continually recharge along the way.

Of course, this same challenge extends well beyond the entrepreneur, into all walks of life and work. I found some great insights in the classic book, “Are You Fully Charged?” by human relations expert and bestselling author, Tom Rath, which explains well the three keys to energizing all your life pursuits. These keys are meaning, interactions, and energy.

Based on my experience working with early-stage startups, I agree with Guy Kawasaki, that those entrepreneurs who set out to make meaning in the world (a positive change) create the companies that will most likely be successful. I have paraphrased Rath’s eight recommendations on making meaning as key focus principles that every new entrepreneur should take to heart:

  1. Create meaning with small wins. Celebrate small wins by asking yourself what can you do today to make a difference? Real meaning is made up of many small differences, such as a design breakthrough, new business model, a truly satisfied customer, or an excited team member. Take a moment to enjoy each of these and get recharged.

  2. Pursue life and meaning, as well as a solution. Finding meaning is driven from within, through new learning and overcoming challenges. Every startup has a wealth of these opportunities. Successful entrepreneurs often admit that they enjoyed the journey more than the destination. Meaning does not happen to you – you create it. Don’t wait.

  3. Make your startup a purpose, not just a business. Strive to see the work you do to build a business as the way to make a difference in the world. Make sure your team understands your shared mission, meaning, and purpose. Making meaning is making your life, and the lives of others, stronger as a product of your efforts.

  4. Find a higher calling than cash. Happiness does not scale up with income. Studies show that doubling your income might increase happiness by 10 percent. In addition, focusing first on money will kill meaning. The more you focus your efforts on others, the easier it is to do great work without being dependent on money, power, or fame.

  5. Ask what the world needs. You create meaning when your strengths and interests meet the needs of the world. One of the rightful critiques of all the “follow your passion” advice is that it presumes you are the center of universe. A better way is to explore the most pressing needs in your social circles, organization, and the worldwide community.

  6. Don’t fall into the dreams of others. If you walk only in the path of others, your own image disappears. Be sure you create your own shadow, spending some time each day engaging in activities that energize and recharge you. Also plan to spend more time around specific people who energize your work and less around those who don’t.

  7. Take the initiative to shape the future. If you want to make meaning in the world, your ability to do so will be almost directly proportional to the amount of time you spend initiating instead of responding. Being busy is often the antithesis of working on what matters most. Usually you have to focus on less to do more.

  8. Work in bursts, paired with time to recharge. This can mean focus for 45 minutes, followed by a break for 15 minutes. Short breaks allow you to refresh yourself and work with purpose. Try to remind yourself daily why you do what you do, and if you don’t like what you hear, it’s time to change to something that has more meaning for you.

In an author survey of 10,000 people, only 20 percent admitted to spending much time doing meaningful work yesterday. Only 11 percent reported having a great deal of energy at work. Clearly, most entrepreneurs are operating well below their capacity, and could be more effective in building their business or making new meaning in the world. If you are one of these, then it’s time for you to change before you burnout and disappoint everyone, including yourself.

Marty Zwilling

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Saturday, June 2, 2018

8 Rungs On The Accountability Ladder Drive Leadership

transparency-accountabilityMost business managers preach that the key to success is holding employees accountable for actions, but I have found that successful entrepreneurs are all about holding themselves accountable. They skip the blame and complain game, and make things happen despite major obstacles. As a startup investor, I view any evidence of a victim mentality as the kiss of death.

In reality, the picture is a bit larger than this, as outlined in the classic book “Leading with GRIT,” by Laurie Sudbrink, a well-known business leadership coach and speaker. She defines GRIT® as Generosity, Respect, Integrity, and Truth, with accountability being a major component of integrity. With all these elements, people can move from accountability to total leadership.

To explain accountability, she and I are strong proponents of the Accountability Ladder, which has been included in every Management 101 class for many years. Unfortunately, most entrepreneurs never get the opportunity to take this class, and many corporate managers seem to have forgotten, so I’ll summarize from my experience in business the eight basic rungs:

  1. No accountability, person totally unaware of failures. These are business people, whether they be employees, managers, or entrepreneurs, who don’t have a clue about what is required or the devastation they leave behind. Usually these people think they are doing a great job, and are totally oblivious to their unhappy customers or cash drain.

  2. Use blame and complain in lieu of accepting accountability. Some business people always play the victim, finding someone or some natural force as the cause for all their failures. An example of this would be finger pointing at unfair managers, blaming economic downturns, and irrational customer expectations for missed commitments.

  3. People deliver excuses rather than results. It’s easy for an entrepreneur or an employee to convince themselves that they would have been successful if they had more time, received more funding, or had the proper training to do the job. Usually the real culprit is procrastination, lack of focus, or low productivity and lack of metrics.

  4. Wait and hope for a miracle. Entrepreneurs with the mantra “if we build it, they will come,” and executives who don’t communicate their expectations, fall into this category. Employees can’t be accountable if they don’t know what is expected of them. Entrepreneurs won’t be successful if they have a passion, but no plan and no target.

  5. Accountability starts by acknowledging reality. Business people at this level recognize the magnitude of the workload and the specific tasks required for success. Smart entrepreneurs know they must deliver a quality product, develop a winning business model, and attract real customers. All that’s left is to commit and deliver.

  6. The next step is to accept ownership and responsibility. Moving forward into the business realities requires courage, commitment, and determination to succeed. If the motivation is not strong enough, it’s easy for people to fall back down the ladder and cover their lack of ownership with excuses, blame, and complaints.

  7. Apply known solutions to predictable tasks and challenges. Most good employees and executives perform at this level of accountability. They admit to owning the situation, and pride themselves on their professional abilities. Yet, when the totally unexpected happens, they may be quick unload the problem up the line, or fall off the ladder.

  8. Accept total accountability and make it happen. These are the cherished entrepreneurs who succeed despite tough odds, and the employees who come up with new approaches to delight your customers, achieve breakthrough goals, and develop innovative new products for markets you never imagined.

From my perspective, accountability should be the guiding principle for entrepreneurs who seek to change the world, as well as for employees who want to stand out above the rest. Before you start assessing accountability in others, it usually pays to take a hard look at yourself in the mirror. Are you accountable to be accountable?

Marty Zwilling

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Friday, June 1, 2018

Don’t Let Outdated Innovation Myths Limit Your Career

business-innovation-mythsEveryone knows that starting a new business, or even keeping an old one competitive, requires innovation. But in my role as a mentor to many aspiring entrepreneurs, I find many who never start because they assume that they don’t have what it takes to be innovative. Chances are, they have accepted one of the common myths that keep innovation outside their range of thinking.

I’m convinced that every one of us has innovative insights from time to time, but an entrepreneur is one who acts on these thoughts now, rather than just dismissing them or waiting for more validation. For example, I have a friend who had a couple of long-standing very innovative ideas, which could have been patented, only to find that someone else recently beat him to the punch.

So, the next time you are about to dismiss an innovative idea, check this list of myths (or excuses), before you let a potential opportunity of a lifetime slip through your fingers. Time is of the essence, since innovations today are “old news” tomorrow. Here is my prioritized list of innovation myths that stand in the way of too many business professionals:

  1. Innovators are born with special DNA, which can’t be activated later. Even the best work from Harvard on this subject concludes that innovation is only about 30 percent individual genes and 70 percent learnable and driven by motivation. They suggest that everyone focus on associating, questioning, observing, networking, and experimenting.

  2. Innovation is like art and music – it can’t be planned and managed. More recent research confirms that innovation is a discipline, and it can be maximized, measured, and managed through formal processes. The well-known management consultant Peter Drucker was the first to outline the key areas for focus, inside and outside the business.

  3. Within your company, look for unexpected occurrences, incongruities, process needs, or changes in an industry or market. Outside the company, look for demographic changes, changes in perception, and new knowledge.

  4. Innovations are sparked by outside-the-box thinking activity. There are some techniques for training a team or yourself to think outside-the-box, and this process does result in some innovations, but others are simply the result of trying to do your job better, or having a bad experience. Many other innovations are just the result of lucky accidents.

  5. True Innovations require creativity and right-brain thinking. Innovation and creativity are two different things. Creativity is more about ideas, while innovation is all about implementation. If your strength is in being logical and organized (left-brain), that talent may actually give you an advantage in the real world of business, delivering innovations.

  6. The way to leverage creativity into innovation is by pairing your creative people with left-brain implementers who will make change happen.

  7. Real innovation requires new technology from experts. Experts may create technology, but regular people apply it to customer needs, For example, Jeff Bezos of Amazon energized online commerce with his early one-click patent, which had some technology behind it, but was basically a simple red button to complete and ship an order.

  8. Large organizations and stable processes stifle innovations. It’s true that startups may be quicker to seek out and adopt innovations, but there are clearly some problems that can only be solved by companies with highly specialized resources. Indeed, there are large companies, including Toyota with Kaizen, that have built cultures of innovation.

  9. Of course, individual technical entrepreneurs often have the specialized talents, as well as the motivation to tackle these innovations, creating an ideal opportunity for a win-win relationship through funding or acquisition.

  10. Companies need a culture of change before innovations can emerge. In reality, innovations come from people, not culture. Keep your culture customer-focused to recognize opportunities for innovation. When people change, due to new leadership, new motivation, or business changes, innovations occur, rather than the other way around.

  11. Innovations need to be validated and perfected before market exposure. In fact, the only way to test the value of an innovation is to take it to market. Of course, it pays to start with a minimum viable product (MVP), and assume some pivots will be required. In these days of rapid market change, extensive pre-market testing is not recommended.

There are many more myths that inhibit innovative ideas in new businesses, as well as old. But without the reality of execution, innovative ideas really have no value. Customers are interested in solutions, and investors want to see traction and results. Your real challenge as a business professional or an aspiring entrepreneur is to move from idea to action quickly.

The market and your competitors never stand still, so every moment you don’t execute on an innovation, you are losing ground, or losing an opportunity. Don’t let a few outdated and unproven innovation myths stop your career or prevent you from achieving the lasting legacy that you always dreamed about.

Marty Zwilling

*** First published on Inc.com on 05/17/2018 ***

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