Wednesday, October 31, 2018

Make Yourself A Key Sustainable Competitive Advantage

businessman-competitive-advantageThe most successful entrepreneurs and business owners I know are humble, and they don’t have an inflated sense of self. When you have some success behind you as a manager, executive, founder, or CEO, it’s easy to become less open to the advice and signals around you, and believe you should just continue doing what you are doing to keep climbing. It’s a recipe for disaster.

The only “sustainable competitive advantage” in business is self-awareness. I was struck by this assertion in a new book, “The Messy Middle,” by Scott Belsky, who has spent more than a decade leading in the worlds of technology, design, and startups. I come from the same world, with an additional decade advising entrepreneurs, and I enthusiastically confirm his view.

We both have found that the “messy middle,” with its ups and downs, is the hardest and most crucial part of any bold venture, and that’s where you need to come to grips with your true self. Here are some key points for benchmarking your own sense of self, and the self-awareness of those around you, with a bit of guidance on how to get to the next level and capitalize on it:

  1. At a peak or valley, you are not your greatest self. When things are going well, ego can get the best of you. When times are tough, insecurities normally run rampant. Maintaining a realistic perspective is your promise or peril. Effective advisors and boards are most helpful in these times, when the tough questions are less apparent but critical.

    Most successful business leaders, including Richard Branson and Bill Gates, regularly called on their mentors, Freddie Laker and Warren Buffett, to test their perception of the right questions to ask, and the right issues to tackle.

  2. Understand your feelings to recognize what bothers you. Whatever triggers your frustration or irritates you is rooted in the core value you haves, something you strongly stand for or against. For example, one of my core values is timeliness for completed work and meetings, so I may judge people and results harshly when they violate my limits.

    But now that I have made myself aware of this tendency, I can mitigate my quick judgment to recognize valid delays, and look at results for their real value.

  3. The less defensive you are, the more potential you have. Being open-minded while receiving constructive feedback is challenging. Do you immediately try to explain yourself, go on the offensive, or try to avoid conflict at all costs? Self-awareness helps you achieve balance between these tendencies, and be open to insights from others.

    For example, I once worked for a startup CEO who desperately needed money from a venture capitalist, but became totally defensive when the VC suggested that my CEO might be better in the chief marketing role, in favor of a more experienced CEO. The result was a broken deal, and ultimately a failed startup, instead of a win-win business.

  4. Understand the sources of your own negative tendencies. The leaders I admire most have invested a great deal of time understanding their own psychology and learning from their past patterns and difficulties. They don’t hesitate to get help from executive coaches, Meyers Briggs training, or other peer groups, such as the EO Network.

    Understanding the sources of your own negative tendencies also helps you make sense of others’ behavior, and support them to maximize their contribution and loyalty. Discussing your flaws openly invites others to do the same.

  5. Dispel your sense of superiority and primary contributor. With any success, we are liable to overestimate the role we played in it, and underestimate the role of other, and luck. This can alienate people around you who deserve credit, resulting in you becoming more isolated and paranoid, or starting to believe you are actually superior.

    The challenge is to integrate humility into your life. It could be a sense of greater good that keeps you humble, a partner who keeps you grounded, or an insatiable sense of curiosity that keeps you inquisitive. Always give credit for your wins to all those involved around you, and be the first to take responsibility for losses.

Ultimately, self-awareness is about being the best competitor and the best leader that you can be, always making sound judgments, and effectively engaging with your team, partners, and customers. In business, you are usually many decisions away from success, but always one decision away from failure. Make every one count.

Marty Zwilling

*** First published on Inc.com on 10/17/2018 ***

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Monday, October 29, 2018

Effective Marketing Today Begins With A Conversation

conversation-marketingAs a long-time advisor to small businesses and startups, I still find many who think marketing is still primarily broadcasting your message to as many customers as possible, hitting them again and again, until it sticks. They don’t realize that customers today are looking for relationships, meaning two-way conversations with your business. They ignore all else as just plain noise.

Customer conversations are easy today, through responding to customers on social media, web live chats, and interactive applications on mobile devices. In fact, your marketing costs using this approach may be far less than the traditional television, newspaper, and email campaigns. Yet even conversation marketing has to be done right to get customer attention and have an impact.

I found the rules and expectations nicely illustrated in a new book, “Conversation Marketing: How to Be Relevant and Engage Your Customer by Speaking Human,” by one of the experts in the new digital marketing strategies, Kevin Lund. He offers a wealth of examples that I second from my experience on how to get started and do it right, as well as real guidance on what NOT to do:

  1. Don’t pay attention to customer input. In great marketing, as in real life, starting the conversation is just the beginning. You have to focus and listen to what the potential customer is saying during the conversation to fully understand their message and needs. We all know people who don’t listen while we are talking. Don’t let your business be one.

    For example, it’s easy to get so focused on selling the product you have, that you miss the customer desire for free shipping, or personalization, or colors you don’t have. Instant empathy and positive responses will make new customers your best advocate, bringing customer friends and repeat business you can’t get with traditional marketing.

  2. Talk about your products, not your customer. Nobody wants to listen to someone drone on about how great they are. Yet, throughout the decades, common advertising copy has been a description of product features and benefits, with a nod to what it will do to enrich the customer’s life. Don’t let your conversation marketing do the same thing.

    A successful content marketing strategy turns traditional advertising on its head by first asking customers to tell you what they need, only then bringing up what your business offers to meet those exact needs. Pull in customers with questions, rather than pushing answers.

  3. Try to close on a sale transaction too early. As with all relationships that you want to last, preparing for a close must be done with patience and two-way conversations. Old-fashioned marketers feel the pressure to produce an immediate return on investment (ROI), and prefer the billboard approach to closing. Do less pitching and more teaching.

  4. Offend or talk down to your potential customers. The best content marketing is tuned carefully to the desired customer set or demographic. That means than one size probably doesn’t fit all – if your audience is millennials, the questions you ask and the language is different from what boomers expect. Be sensitive to geographic and cultural implications.

    What constitutes a ‘basic assumption’ depends on your audience. If, for example, you’re writing a blog post aimed at professional investors, you don’t need to stop and explain what an entrepreneur is to them. Don’t offend customers by getting too personal for certain cultures in your attempts to understand what it takes to be memorable.

  5. Don’t have credible data to support factual content. We have all had conversations with a know-it-all who makes questionable statements, causing us to lose trust now, and for the long term. Make sure your content can withstand even the most critical scrutiny, and doesn’t come across like marketing hype or unsubstantiated claims.

    For example, we have all seen weight loss and exercise products that claim to evaporate some number of pounds and inches in the first week, without any reference to a real study supporting these assertions. Credibility is key in relationships, so pick your influencers well. The safer way is to let your advocates and their friends share their facts.

Conversation marketing will help you connect your business to the hearts of your customers for the long term, not just to their minds for a single transaction. They want a sense of personal value and a relationship before they act. You can’t deliver that with a one-way monologue.

Marty Zwilling

*** First published on Inc.com on 10/15/2018 ***

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Sunday, October 28, 2018

7 Ways College Degrees Can Expedite Startup Success

Entrepreneurs_Event_at_College_of_DuPageA popular myth these days is that finishing college only dilutes your entrepreneurial instincts, and the best of the best, including Bill Gates, Steve Jobs and Mark Zuckerberg, dropped out early to hasten their success. I agree with Robert E. Litan, former VP of research at the Kauffman Foundation, that these are exceptions to the rule, rather than a model to emulate.

Some people even believe that entrepreneurs must be born with the right genes, and no element of education is relevant. While I do agree that many attributes of a good entrepreneur, such as curiosity, confidence and determination, are largely determined by early-life experiences, a good education is critical in understanding the elements of creating a business and wooing customers.

In my view, the most effective entrepreneurs are those with a background of an array of real-life experiences, both positive and negative, as well as good academic and coaching activities. In fact, failure has been shown to be a better teacher than success, so parents and schools who protect their charges from any failures may not doing them any favors in the long run.

While we all know a few good entrepreneurs who dropped out of school, the Internet is full of stories on many more who capitalized on at least four years of college, including Sergey Brin and Larry Page of Google, Chad Hurley of YouTube and Bob Parsons of GoDaddy.

A more important question, then, for an aspiring entrepreneur, should be what to study in college for maximum value, rather than whether to drop out or stay. Here are my thoughts on the right focus at a college or university:

  1. Take entrepreneurship courses, but major in a more specific discipline. Depth in a specific business area, such as marketing or accounting, is important in understanding the internal and external processes of a business. Entrepreneurship is more about pulling all the elements together, making change happen and building relationships.

  2. Practical business courses are better than an advanced degree or MBA. Starting a business is not rocket science. A breadth of understanding of common business principles, such as management, personnel and finance, is more important than a depth of knowledge in a technical area. Don’t forget business writing and communication.

  3. Get involved in startup-business incubator activities with peers at school. Most universities have formal incubator and business development organizations that focus on coaching, grant writing and technology licensing. These present a huge opportunity to take your first steps as an entrepreneur with minimal risk and maximal support.

  4. Produce a real business plan for critical feedback from outside investors. It’s important to go well beyond the passionate idea stage. Writing a business plan is the only way to determine if you even understand what your dream is all about. Once you graduate, the feedback will cost much more, and it’s too late to take one more course.

  5. Extend your networking into peer interest groups outside your school. Start with your school connections with peer universities around the world. Then branch out to local business groups. Peers won’t be able to help you much in finding external investors, co-founders with prior experience and industry connections for distribution and marketing.

  6. Find summer internships and part-time work in your field of interest. You can’t really learn all you need to succeed in any business domain from textbooks. The idiosyncrasies of supplier relationships, distribution and pricing are just as important as the generic elements of time and money management. Get real experience early.

  7. Incorporate your first business before you graduate. It’s never too early to stop studying and start doing it for real. You will learn the most by facing the tribulations of establishing an LLC and dealing with insurance, personnel and tax issues. Remember, it’s the learning that counts, not the size of the bet or the ultimate success of your first try.

The best thing you can learn in school is how to learn -- fast and effectively. In the real world, change occurs very rapidly, so all the specifics you memorized from textbooks will likely be obsolete by the time you need them. Your academic credentials will have very little value as well. The value is in your ability to get new credentials in your business faster than your competitors.

If you are already in Harvard, and have proven that you learn quickly, then feel free to drop out and change the world. For the rest of us, a bit more practice before jumping feels like a better bet. We need all of you at your best.

Marty Zwilling

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Saturday, October 27, 2018

5 Key Elements Of A Winning Business Strategy Today

idea-plan-strategy-successDoes your business have a visible positive strategy, or do your customers and employees still see your primary focus as closing more sales and killing competitors? Certainly that has been the strategy of many companies, and has worked in the past, but today’s customers and workers are looking for more. They want relationships, positive experiences, and a win-win for society.

With the pervasive and instant communication of social media and the Internet, businesses can no longer hide behind the mask of their own hype, either inside the company or outside. The right positive strategy is integral to claiming leadership as well as making it happen.

I just reviewed the classic book, “The Strategic Leader’s Roadmap,” by Harbir Singh and Michael Useem from the Wharton School, which provides some specific steps along the way. I believe these steps are especially critical to the success of entrepreneurs who are rolling out new businesses today. It all starts with setting the right company strategy, including these elements:

  1. Inspirational statement of purpose and direction. The old mission statements declaring your intent to be the “low-cost provider” is no longer a motivating vision for employees or customers. Engaging visions today include elements of social and environmental responsibilities, as well as economic returns to constituents.

  2. Market and customer positioning. Clearly focusing on the right market and customer profile sets your competitor differentiation. It starts with understanding the drivers of customer excitement in advocating your solution, and ways to strengthen relationships. When customers are excited, your team becomes more engaged and productive.

  3. Customer and employee value propositions. What are the company’s solutions and practices that will be seen as win-win value by all constituents? Your managers and everyone on your team needs to understand how their actions and leadership relate to value provided. The strategy must drive leadership so that leaders can drive the strategy.

  4. Competitive and leadership leverage. A good strategy provides opportunities for internal actions and leaders to optimize and extend a firm’s competitive advantage. This requires effective communication of intent, flexibility in implementation, and positive rewards for innovation and initiative in improving customer experience and quality.

  5. Constant restructuring for future advantage. A strategy that does not evolve as the market changes is a losing strategy. The internal team must see a reward in fostering change and leadership, and customers must be energized by new and improved processes, practices, and solutions. The best strategies are dynamic, rather than fixed.

A positive business strategy allows you to lead strategically by mastering the elements of both, separately and as an integrated whole. The authors argue that strategic leadership is an acquired capability that can and must be mastered by managers at all levels. It needs to extend to the firm’s directors, as well as investors. Everyone has to think and act strategically.

Another growing force for strategic leadership is the evolution to globalization. New companies are automatically global in reach and visibility, which makes a lack of strategy more impactful, since there is no move to an alternate environment for correction and restart. You need to get it right the first time, or there may not be a next time.

Above all, no company can afford to confuse strategy with tactics. Strategy is the “what” part of the equation, and tactics are the “how” activities. Every business, especially startups, have limited resources to implement tactics, so they need to be totally clear on the strategy first. Even if you could unleash unlimited tactics, the results would be confusing and non-productive to employees and customers alike.

Business success is an elusive target – with over fifty percent of new businesses continuing to fail in the first five years. We are also seeing an increasing number of former leading businesses disappear from the scene, including Blockbuster, Kodak, and Sharper Image. Start with a focus on strategy, and keep it there. Maybe it’s time to check yours with your employees and your customers, and see how positive it is today.

Marty Zwilling

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Friday, October 26, 2018

7 Strategies To Create Your Own Market And Win Bigger

Elon_Musk's_Tesla_Roadster_1New technology markets and paradigm shifts have traditionally been bad bets when seeking investors, since these were known to take decades to develop, and cost lots of money. For example, consider how many years it took for the market to move from radio to television, or fully accept personal computers on every desktop. The leading edge was too often the bleeding edge.

Yet now I believe the evidence is clear that the world has changed. Many customers now actively seek out new technologies, rather than wait for many others to try it first. Technology is changing faster than ever, and new things usually work when they are released. Steve Jobs proved it with the iPhone, and Elon Musk can’t produce his electric cars fast enough to keep up with demand.

Bold entrepreneurs now can credibly talk about entirely new markets, such as the Internet of Things (IoT), genetic modifications, and privatized space travel. However, such changes don’t yet happen automatically, so it still takes proactive strategies and key actions to create new demand where none exists. Here are the specifics that I recommend to improve your odds of success:

  1. Sell the market concept before building a product. Today, with instant and pervasive Internet communication, you can sell your vision via blogging, crowdfunding, and videos before you spend big money building prototypes and pivoting as you learn. This will prep and size the market, and greatly increase your chances of getting it right the first time.

  2. Highlight positive social and environmental impacts. For example, if your new product reduces pollution or world hunger, this adds immediate value and confirms a positive long-term strategy for customers today. Too many founders still focus their product design and selling efforts only on direct paybacks to the customer.

  3. Incent your team to continually think “outside-the-box.” You set the limits and the culture for your team, based on how you reward creative thinking, or penalize people for failed experiments. It starts with hiring the right people, and building relationships with the right experts, analysts, and investors. Then you really listen to what they have to say.

  4. Work to build a compelling story around your new idea. Customers need to see personal and social benefits around a new solution, not just a new technology. The change must also include long-term benefits, as well as short-term. A compelling story can make or break your ability to differentiate your solution from dozens of others.

  5. Use social media and the media to build demand for change. New markets don’t just happen, or create themselves. People need to be influenced and educated to change consumption habits, expectations, and buying patterns. Product messaging and branding need to follow later, after the initial demand has been built. Concept marketing is critical.

  6. Build momentum with an integrated marketing campaign. All the elements of change required for the new market must be addressed consistently, not just the product elements. A successful campaign must not only capture people’s imagination but must have the right integration to move people to a new frame of reference and new thinking.

  7. Acknowledge and position competitors around you. It may sound counterintuitive, but when you are creating a new market, competition helps legitimize it and increases the size of the pie. Position competitors positively around you, and continue to find ways to keep yourself ahead of the crowd, with both product offerings and thought leadership.

Elon Musk, for example, opened all his battery patents to competitors, with the expectation that this would expand the market as well as build the support infrastructure for his Tesla electric car market. He highlighted the positive environmental aspects, as well as the high performance remote maintenance elements of his new technology. New markets don’t have to be disruptive.

Thus new entrepreneurs have a new alternative to the tried and true approach of linear thinking, cost reduction, and more new features. Maybe it’s time for you to step out of your comfort zone, think more broadly, and pursue a new market legacy for maximum fun and profit.

Marty Zwilling

*** First published on CayenneConsulting on 10/10/2018 ***

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Wednesday, October 24, 2018

Even the Best Startup Solutions Need Modern Marketing

modern-marketingAs a long-time advisor to aspiring entrepreneurs, and a technology fan myself, I still meet dozens of techies with great solutions who assume they don’t need marketing to change the world. They subscribe to the myth that “if we build it, they will come.” In fact, with today’s information overload, modern marketing is the key to raising even the most innovative solution above the crowd.

Let me be clear – I’m not talking about the old-fashioned “push” marketing, where you broadcast your message louder and more incessantly than others to get above the din. I’m talking about using the new digital channels of blogging, social media, and influencers more creatively to “pull” people to your solution, and make them advocates. This is the new art and science of marketing.

In fact, you need to understand that marketing itself has changed, as much as all the other elements of business. I see these changes summarized well in a new book, “Marketing Flexology: How to Outsmart Change and Future-proof Your Career,” by Engelina Jaspers. She points out changes and new approaches, based on her thirty-year career in technology advertising.

She clarifies, for example, that one of the things that hasn’t changed in marketing is the need for a compelling call-to-action (CTA), but implementation alternatives can now be more creative. As an entrepreneur, your technology and your solution may be very impressive, but customers and partners won’t get your message unless they are presented with the following key elements:

  1. Documented tangible personal benefits from your solution. In my experience, the goals communicated by most change initiatives are either overly lofty, uninspiring, or nebulous. Don’t forget to add a call to action, such as buying the product or accepting a proposal, and emphasize the personal benefits acquired for taking the requested action.

    For example, the Square credit-card-reader technology business for smart phones touts the ability for almost anyone to accept credit cards transactions anywhere – something that was previously out of reach before Square came along. This can be easily quantified to show how any taxis and other vendors can increase their customer base and revenue.

  2. Clear direction and priority on how to achieve results. Talking about abstract issues, or listing dozens of new features is not effective today. On the contrary, limiting the number of options marketed and using direct, simple, and actionable language will make your message stand out, and increase the probability of real visibility and success.

    Take a look at the Vanguard investment management site, and you immediately see language like “See why Vanguard is right for you” and “See how a Vanguard advisor can help” to quickly prioritize customer needs. Another approach is a specific actionable statement, such as stop doing X, and start doing Y and Z. Be specific.

  3. A sense of urgency instilled to take action now. Deadlines and time limits make people act quickly rather than think too much, wait too long, or simply not respond. Scarcity also works to convey a sense of urgency. Another powerful motivation is the fear of missing out (or FOMO). Create a sense that you may be missing something exciting.

    A good example of this would be something like “call before December 1st to get a free 30-day trial!” Not only have you stated the action you want the user to take (call deadline), but you have also provided them with a reason why they should take that action (a free trial). Obviously this applies to technology and non-technology solutions.

  4. Creativity in making the communication memorable. Something could look great on paper, or may sound great, but the only way you’ll absolutely know for sure if something will work for your solution is if you test it out. I recommend trying different experiments, but being creative with them. Try to think outside the box on every marketing message.

    For example, Warby Parker eyeglasses cleverly uses an interactive quiz and gamification to guide people down the purchase funnel. The Missguided e-commerce site in the UK often uses hip language to appeal to a young, digitally-savvy and pop-culture-loving audience, to make their visit memorable and suggest a need to return again.

Every entrepreneur needs to realize that marketing is now key to success on every new venture, no matter how compelling the technology. In addition, you need to understand that modern marketing practices have changed, now requiring more creativity and agility, no matter what background and training you come from. Keeping up with this change is critical to your survival.

Marty Zwilling

*** First published on Inc.com on 10/10/2018 ***

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Sunday, October 21, 2018

7 Keys To Timely And Compelling New Venture Progress

business-accomplishmentsOne of the most important skills for every entrepreneur is timely and effective decision making. In a startup, any decision is better than no decision. One of the primary roles of every founder is to solve problems, make a decision, and manage the decision to results. The best entrepreneurs relish this role, while others struggle mightily and ultimately lose their health and their company.

In fact, there is much evidence that these same skills are a key to happiness and success in every area of your life and career. I found the book, “Master Your Time, Master Your Life,” by noted speaker and productivity expert Brian Tracy, who highlights decision making and problem solving as one of the most critical determinants of your success in everything you do.

Since I’m not a life coach, I can’t comment on the broader implications, but in my role as advisor to many startups, I do often find myself recommending a focus on many of his key points, which I will paraphrase here:

  1. Think in terms of action. Action starts with absolute clarity on the goals you want to achieve. Thus I always recommend that you document and clarify, first to yourself, the results you see in your vision of a new venture. Having a great idea is necessary, but not sufficient, to create a great business. Success in business is all about actions, not ideas.

  2. Assume there is always a solution. To solve problems, you need confidence that there is a solution and that you can find it. Without this confidence and determination to make a decision, you will likely fall victim to the malaise of excuses. Everyone needs the growing momentum of solving small problems to incent them to “change the world” with their idea.

  3. Expand your definition of the problem. In business, as in life, most problems have multiple dimensions. The more you understand the scope of a problem, the more likely you are to arrive at the right definition, which will lead to the correct solution. In fact, there are always multiple solutions, so a better definition always leads to a better decision.

  4. Separate symptoms from real constraints. In a new venture, much time can be wasted attacking symptoms rather that the real constraints holding your business back. The right first step is to go back to your goals to focus on the real limiting factors when you encounter problems with sales, growth, profitability, market share, or costs.

  5. Use brainstorming for a range of solutions. Harried entrepreneurs too often jump on the first solution that comes to mind, rather than looking for the best solution. Many techniques have been developed, such as brainstorming, to expand your thinking and identify up to twenty solutions for a given problem. The best will not be first on your list.

  6. Assign responsibility for results. It’s amazing how many business problem-solving meetings end with a clear, agreed-upon decision, but two weeks later the problem still exists. This represents a lack of responsibility assignment or acceptance, or lack of follow-up. Your job as entrepreneur or executive does not end with picking a solution.

  7. Work to enhance your problem-solving skills. Problem-solving skills need constant tuning as your position of responsibility improves, and your business becomes more successful and visible to competitors. Even the best entrepreneurs find more experienced and skillful mentors to help them improve, and explore new tools to conquer problems.

In all cases of business problem solving and making decisions, another important skill is your ability to think about priorities, both before you act and while you are acting. The best entrepreneurs have the ability to focus on the really important issues, and say no to all the other requests vying for their time. Thus they effectively accomplish vastly more than the others.

If you are looking to move up in your business career, or looking to adopt the lifestyle of an entrepreneur to take control of your time and your life, make sure that you follow the steps outlined here for success, self-esteem, and real happiness. Life is too short to be unhappy in your work.

Marty Zwilling

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Wednesday, October 17, 2018

8 Tips For Quantifying Traction In Your New Venture

Vehicles-Drag-Race-tractionWhat is the definition of traction for a business startup today? According to most investors I know, traction is some clear evidence that the “dogs are eating the dog food” – usually meaning that you have at least one customer paying full price for your solution. If your phone app or service is free, then the number of users or downloads better be impressive and growing exponentially.

Another term often mentioned is “momentum,” or growing visibility and advocacy within your customer set. This can happen through early marketing, independent of whether you have yet delivered a single product, proven your business model, or have any real customers. Most great crowdfunding campaigns, for example, are the result of momentum built through social media.

Unfortunately, your personal assessment that you have traction probably won’t be convincing to potential investors and partners, so it’s important that you create and track your progress against some metrics. Here are some of the key specifics for credibility and acceptance as you create and use these metrics:

  1. Itemize investment levels from you, insiders, and family. Professional investors expect traction discussions to begin with the size of your own investment, in money and time, plus support received from friends and family. Next would be the level of support from key insiders who would clearly benefit from the success of your solution.

  2. Define metrics on customer feedback and user counts. Early examples of traction for any solution, especially free ones, would include website traffic, number of blog comments, likes, downloads, and active user rates. Investors are wary of initial surges due to friends, family, and early adopters, so sustainable growth rates over time are key.

  3. Count connections with experts, media, and influencers. You need outside advocates who will back your assertions of traction and valid metrics. Relationships with recognized and influential bloggers, relevant media, and industry analysts are priceless. Traction with these people usually is indicative of later traction to come with customers.

  4. Assemble a credible inside advisory board and partners. Investors and potential partners measure your credibility by the quality of your advisors and peer partners. If Elon Musk is an advisor to your transportation startup, that is major traction, even without a product or revenue. Who you know is still often more important than what you know.

  5. Build an experienced technical and executive team. A sure sign of no traction is a lone inexperienced entrepreneur looking for an investor. You need a well-rounded team, including technical, financial, marketing, and operational experience, and your ability to attract the right people is a strong indication of fundability and traction.

  6. Demonstrate key customer prospect evidence of interest. If you don’t have revenue, it definitely is valuable to have orders, letter of intents, value testimonials, or even calls returned and email responses. While these may not be advertised publicly, they should be celebrated internally and highlighted informally to potential investors and partners.

  7. Show validation data for business model key elements. One important measure of traction would be a metric on how many of the key business model elements have been proven, with actual data or multiple experiments. These would include cost of customer acquisition, cost of leads, sales channel, cost of goods, and pricing strategy.

  8. Quantify progress against generic growth constraints. In every industry there are known barriers to traction, including regulatory approvals, safety standards, and clinical trials. These need to be listed as a metric, with breakthroughs counted and resolution times projected. Investors need to see your accomplishments, and the barriers ahead.

Without measures like these, you will likely hear the most common rejection from investors – “Come back when you have more traction.” Be aware that there is no magic threshold of user signups or customer revenue that will assure success. It all depends on the overall level of perceived risk, your credibility, and the size of the potential opportunity.

It’s up to you to define what traction means in your new venture, and then show your progress against these measures. Your level of passion is no substitute for some real data and analysis. In reality, all traction metrics are for you as the business owner, to measure your progress and growth in your new venture. Don’t be fooled by your own hype.

Marty Zwilling

*** First published on CayenneConsulting on 10/04/2018 ***

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Monday, October 15, 2018

6 Story Attributes Will Highlight Your Business Pitch

business-woman-telling-storyThe biggest challenge for every entrepreneur and every startup today is to get noticed and remembered in today’s information overload. The number of entrepreneurs worldwide is huge, starting an estimated 50 million new businesses per year, or 137,000 per day. Every one of these probably has a unique story, but in my years as a startup advisor I only remember hearing a few who capitalized on their story.

The impact of a memorable story was highlighted for me recently as I reviewed the classic book, “Sell With A Story,” by Paul Smith, who is an expert trainer on increasing business results through storytelling. His focus is primarily on improving the results for traditional sales professionals, but I’m convinced that the same principles are equally critical for entrepreneurs selling their startup to investors, strategic partners, and customers.

I say that because I’ve heard too many abstract pitches about the next paradigm-shifting technology, which I can’t relate to, and only a couple with stories that really grabbed me. The best story I remember related the family impact of devastation wrought by Alzheimer’s disease, leading to the development of a mitigation process, and I am now fully committed to this effort.

I learned from Smith that a memorable story doesn’t have to hit you personally, but it does have to include six key attributes to raise it above the standard sales pitch, or new venture problem statement, opportunity sizing, and value proposition. These attributes include the following:

  1. Specific moment-in-time indication. Most entrepreneurs were incented to start their venture at a specific moment they remember well, so telling the story of when and how this happened is a natural. The result will always have more impact than merely outlining a new technology, cutting costs, or tackling a known problem, such as world hunger.

  2. Place where it happened. A memorable story needs to start with location specifics to make it real. Stories relay events, and these events have to happen somewhere. The words can be simple, like “I was meeting with a customer in Boston,” or “When my home was devastated by a tornado.” It’s even acceptable to make up a place with a “what if.”

  3. Every story needs a main character. This should be obvious, but much of what passes for “a story” these days are things like elevator pitches or product descriptions that have no characters at all. In the context of new venture stories, the character would most likely be the entrepreneur, a potential customer, an investor, or all of the above.

  4. The obstacle or the painful need. This is the villain in the story, which should be the problem you are solving. If could be a disease you are designing medicine to combat, missing data that your solution provides, or a safety risk in a common process. The explanation of your solution, financial return, and the rollout comes later.

  5. A worthy goal. The main character in a story must have a specific goal, ideally one that is appreciated or even noble in the eyes of the listener. These days, it’s not cool to have a primary goal of making lots of money, but it is smart to include evidence that the new venture is sustainable as a business, and will provide a satisfying return to constituents.

  6. Something has to happen. Statements about your product’s amazing capabilities or your service commitment, or testimonials about how awesome your company is, are generally not stories because they don’t relay events. They are just someone’s opinion about impact which still belong in marketing collateral, but won’t make you memorable.

If possible, every entrepreneur should craft a unique story, or tune their story, for different audiences, such as investors and customers, to convey your values and your commitment in their specific context. Add emotion, surprise, dialogue, detail, data, and other elements to make your story fresh and effective. Always close stories with succinct lessons and recommended actions.

A compelling story is best used as a “grabber” to get people’s attention and make your venture and brand memorable, but it doesn’t replace any of the new venture basics, such as the business plan, investor deck, or financial model. It can be your competitive advantage over peers and existing players, and it is fun to do. How prepared are you to tell your best story?

Marty Zwilling

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Monday, October 8, 2018

7 Strategies To Avoid the Curse of Business-As-Usual

business-as-usual-oxymoronAs a long-time advisor to entrepreneurs and business owners, I rarely find someone who doesn’t proclaim that the business world is changing rapidly, with new technology, new customer expectations, and new cultures. Yet, I’m still frustrated by the number of business owners that haven’t updated their business-as-usual practices. In my mind, these are killing their businesses.

For example, I still find businesses asking you to print, sign, and return documents by mail in lieu of digital signatures or email. Others still routinely have phone hold queues for customer contact that can last up to an hour, with no alternative options. Yet in my talks with these executives, they are unaware of the issues, or have no idea how to change processes at the rate of change today.

If you are one of these owners who wants to do the right thing to survive and delight your customers, but doesn’t know where to start, I am here to recommend some best practices that I see successful companies, and many startups, who have focused on this issue. Here is my prioritized list of best practices that I recommend to get you back on track:

  1. Focus on building an engaged and empowered team. It takes a well-rounded and motivated team to run a competitive business today. These are your eyes and ears, in daily contact with customers, who are as committed to delighting customers as you are. They have to be energized and able to adapt as the market and competitors demand.

  2. Define stretch goals and challenge your team to deliver. Traditional mission statements are not enough. You need to communicate quantified and updates goals quarterly, including the metrics to assess progress and success. For buy-in and commitment, make sure the team has an integral role in setting goals and rewards.

  3. Optimize your customer feedback and listening channels. These days, customers expect to be able to build a relationship with a business through two-way communication. Make sure your channels are open and responsive, through social media, websites, and easy access to executives. Use experiments with them to evaluate potential changes.

  4. Track competitors and influencers for trends and ideas. Even if your performance has improved dramatically, other businesses may be moving faster or tracking closer to cultural changes and market trends. One of the biggest justifications for business-as-usual is ignoring competitors and not comparing your processes to industry best-of-breed.

  5. Foster a learning and change culture in employees. The best companies have found that it’s important to constantly prepare team members for moving to the next level, through mentoring and training, rather than trying to keep them in their current role. The alternative is that the best leave, and your average skill level and motivation go down.

  6. Plan to upgrade all processes without waiting for a crisis. Waiting for a crisis, like a revenue shortfall, or customer dissatisfaction, is a sure way to disaster. Competitors are looking for a soft spot to step in, and customers have instant access to better alternatives through friends and reviews on the Internet. Once gone, customers won’t be back.

  7. Disrupt your own solutions before someone else does. Too many businesses have their “cash cows,” which they refuse to touch with pricing or new features until it is too late to recover. Intel’s Andy Grove famously argued that chip technology doubled every 18 months, so he planned on replacing his products on that schedule, despite sales.

Business as usual is an easy habit to fall into, and a hard one to change once it is entrenched. If you establish these recommended best practices early, and apply the necessary discipline to keep them going, your chances of success are good. You will also find your business to be a lot more satisfying and self-sufficient. That’s a win-win for both you and your customers.

Marty Zwilling

*** First published on Inc.com on 09/25/2018 ***

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Sunday, October 7, 2018

6 Powerful Drivers Shared By Successful Entrepreneurs

Steve-Jobs-StanfordIn my experience mentoring new entrepreneurs and aspiring business leaders, I see far too many who seem to be driven by all the wrong reasons. Everyone seems to espouse extrinsic motivations, such as getting rich, having power, and fulfilling parent dreams, when in fact a focus on satisfying internal interests and desires will likely lead to more success, as well as satisfaction.

I’ve had the pleasure of working with a couple of the best-known entrepreneurs of our time, and read about many more in the updated version of the classic book, “Discover Your True North,” by Harvard leadership expert and best-selling author Bill George. He makes a convincing argument that the best leaders and entrepreneurs follow their intrinsic rather than extrinsic motivations.

He emphasizes the value of finding a way to align your strengths with your intrinsic motivations, which he calls the sweet spot. Some of the most effective sweet spots and intrinsic motivations for today’s entrepreneurs would include the following:

  1. Making a difference in the world. When Bill Gates acted on his dream of putting a computer in every home and on every desk, he had no idea of the fortune it would bring to him, since he wanted only to make a difference. Extrinsic motivations often work against entrepreneurs by leading them to set unrealistic and overwhelming goals.

  2. Find personal meaning from building a business. In his book, “The Art of The Start 2.0,” Guy Kawasaki exhorts entrepreneurs to focus on making meaning, not money. He has said many times that if your vision for your company is to grow it just to flip it to a large company or to take it public and cash out, "you're doomed.” Do it for meaning.

  3. Satisfaction of doing something great. Steve Jobs summarized his intrinsic motivation in 2005 at Stanford in a talk titled “How to Live Before You Die.” He said, “Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do.”

  4. Personal growth and accomplishment. To be a successful entrepreneur, one can never stand still. The best entrepreneurs enjoy the journey as much as the destination. They have a thirst for knowledge that helps them in their business, as well in their own personal growth. That synergy creates a sweet spot that maximizes their impact.

  5. Seeing the real value of one’s beliefs. When asked why he created Facebook, Mark Zuckerberg replied “It's not because of the amount of money. For me and my colleagues, the most important thing is that we create an open information flow for people. Having media corporations owned by conglomerates is just not an attractive idea to me."

  6. Helping others achieve their goals. If you want to achieve your goals, help others achieve theirs. Great entrepreneurs keep your eyes open for other businesses in a related space that can complement theirs. Elon Musk has opened up Tesla car battery patents for use by anyone, which obviously will benefit his business as well as theirs.

Most entrepreneurs will tell you that once they discovered the real purpose for their efforts, they found a new sense of commitment and leadership which allowed them to really inspire and empower others, as well as direct their own actions. At this point they can make the strategic decisions they need to really make a difference, enjoy satisfaction, and leave a lasting legacy.

Many have found that initial failure is one of the best teachers in this regard. I counsel new entrepreneurs to expect failure, and wear it as a badge of pride, rather than trying to hide it. In fact, most investors are wary of anyone who claims to have never failed, reading that claim as an indication of too much caution, or not able to face their own reality.

The primary message here is not to hide your real motivation from yourself, your team, or your investors. You can’t fool them all for very long, and you won’t be happy trying. If you can’t find any intrinsic motivations for what you are doing now, it’s probably time to take a hard look at your lifestyle and your future. Life is too short to be unhappy and unfulfilled for any part of it.

Marty Zwilling

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Friday, October 5, 2018

How to Have a Winning Career, Despite Constant Change

business-careerMost young people who are completing their educational degree today think they will have learned all they need for their career ahead. Unfortunately, based on my own extensive experience in business, I have to tell them in my talks that most of what they know now will be obsolete in a few years. The most important thing you can learn in college today is how to learn.

The rules of business and technology are changing rapidly, and the pace of change is only accelerating. The facts, as well as what motivates your peers, customers, and business leaders are changing daily. For example, no one learned a couple of decades ago that the biggest opportunities ahead would include social media, ecommerce, and computers on our wrists.

Only those of us who learn to practice continuous learning will survive and flourish as we move forward into an unknown business world where more and more intelligent machines and software will do most of the work we know in business today. The question is how we develop our future role and potential, while satisfying all the business and personal demands on our time today.

I saw some good insights on this challenge in a new book, “The Expertise Economy,” by Kelly Palmer and David Blake. Their focus is on how the smartest companies today already create and use learning to engage, compete, and succeed. I believe these insights can and must be extended to you and your career, in line with the following guiding principles:

  1. Make your interest in learning your competitive advantage. Keeping your priority on learning is a mindset that we all need to build. It’s obvious to peers and employers when you have it, from your questions, proactive actions, and interests in new challenges. Smart employers look for these as they contemplate your competitiveness for new roles.

  2. Define personalized learning goals with a timetable. For example, an aggressive career-minded professional today likely needs to set a goal of advancing to a new role or new job every two years, rather than traditionally staying in the same role for a lifetime. You need a plan on how to train yourself, or be mentored, for each step along the way.

  3. Proactively prepare for your desired future roles. None of us can keep up on every new thing in this knowledge abundant world. Don’t wait for someone else to send you back to class, or push you to change. Only you know your strengths and learning preferences, from jobs, conferences, books, websites, and videos. Make the investment.

  4. Learn from peer relationships, examples, and feedback. Most people learn best from other people, yet we don’t always focus on how we can learn from our peers and tap into the knowledge and experience of those who have already mastered a skill we need. The key is active listening to others, asking questions, and acting on constructive feedback.

  5. Explore new technologies and innovative new approaches. Technology is making new things possible in learning and skill building. I understand that change can be difficult, because not everything works, but you never get anywhere unless you take a chance. Adopt the mindset of your children who have their most fun learning new things.

  6. Evaluate your skills regularly and update your inventory. Keep your skills inventory visible to yourself and everyone around you through modern online profiles, including LinkedIn and Facebook. If you haven’t updated your online profiles and resume for a year, you are definitely falling behind your peers and your future career aspirations.

  7. Constantly market your skills and expertise to employers. It’s always positive to document your expertise and accomplishments, in the context of needs that you see in your current company and position. Build a relationship with a career advisor or recruiter to check your fit for other alternatives. Don’t hide or wait to be found and appreciated.

If you are the employer, you need to realize that there are more tools, content, and technologies today than ever before to help your team members become the experts you need. You also need to change your company mindset, from always looking outside for change, to developing a culture of learning and career development for current employees. It’s a win-win situation for success.

Marty Zwilling

*** First published on Inc.com on 09/20/2018 ***

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Wednesday, October 3, 2018

7 Steps To A Memorable New Venture Marketing Rollout

digital-marketing-rolloutEven with instant two-way communication via the Internet and mobile phones, your greatest new solution or service won’t found or properly recognized without marketing. The challenge is to rise above the clutter, and stand out in the rush of over 500,000 other new businesses that get started in the U.S. every month. I find that digital marketing is the most visible and effective place to start.

Even within the digital marketing arena, there are a thousand alternatives, vying for your limited budget. Should you be buying key words from search engines, building fabulous web content, blasting out e-mail campaigns, or putting all your efforts into viral videos or social media? In fact, the first challenge is to build a strategy, put together a budget, and define measurement metrics.

As an advisor to many entrepreneurs and small businesses, I often get asked where to start, and how to proceed. In that context I offer the following practical steps and priorities:

  1. Focus on a unique selling point (USP) for your offering. Digital marketing is all about establishing a voice and sending a message that customers can relate too, and makes you stand out. My advice is to keep it simple but memorable, and pick something you can highlight with pictures and videos. Put your customer at the top, rather than technology.

  2. Research the top digital channels for your business today. There is no one best channel for all businesses. For young consumers today, it may be Instagram or Snapchat, while B2B offerings should take a hard look at LinkedIn and other business forums. Prioritize the list by customer reach, effort required by you, as well as cost.

  3. Select no more than three that match your needs initially. You can’t do everything that you would like, even if you had the money. Resist the urge to try the latest “hot new channel,” just because all your friends are talking about it. Set specific objectives, budgets, and metrics for each one. Pick a theme and a team for each and get started.

  4. Start creating content to get visibility and build a following. Here is where you may need outside expert help to be effective. Traditional marketing hype won’t get you the attention you need. Today’s audience is looking for something more creative, more visual, engaging, and interactive. Here is where you have to think outside the box.

  5. Concentrate on building your brand image and message. Now is the time to integrate and solidify your brand across all the channels and platforms you have selected. You need to hone your design and tone, taking a strategic approach to establish brand recognition in your marketplace, all while keeping your target audience on top of mind.

  6. Expand marketing in channels that work and add others. Based on metrics, revenue growth, and customer feedback, it’s now time to prune digital channels that don’t work for you, experiment with new ones, and expand your efforts where you see success. Content that works should be relentlessly repurposed, from web site to social media, events, etc.

  7. Add elements of traditional marketing to maximize visibility. While non-digital marketing typically costs more money, it may be required to reach all elements of your audience. There are still customers who won’t give your brand total credibility until it appears on television ads, in newspapers, direct marketing, and at trade shows.

In every case, I have found that marketing is more important than ever for the growth and visibility of a new brand, and digital marketing is the most effective and the least expensive way to start. Yet it shouldn’t be done without careful planning and effort. Entrepreneurs who strike out randomly on every digital channel they know, using family and interns, are wasting their efforts.

Even less effective are those who still believe that “if we build it, they will come.” It’s time to be proactive in finding customers, engaging them in two-way conversations, and listening carefully to their message, as well as projecting yours. It’s not the size of your budget that makes you memorable – it’s the size of your connection with real customers who can multiply your efforts.

Marty Zwilling

*** First published on CayenneConsulting on 09/18/2018 ***

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Monday, October 1, 2018

5 Steps To Strategy Tuning Through Machine Learning

artificial-intelligence-machine-learningConventional thinking in business has long been that strategy decisions are made by humans, while the focus of automation and machine learning should be on execution. With the speed of change and volume of market feedback today, as well as the advances in machine learning, Amazon, Alibaba, and others have proven the value of software driven strategy decisions.

For example, most e-commerce platforms today offer millions of products, with a changing mix daily and a changing market, such that it’s virtually impossible to manually predict a strategy for mapping customer demographics to products displayed online. Only smart software can plow through the volume of live data, recognizing trends, customers, and match offerings to reality.

Alibaba, today the counterpart in China to Amazon, Ebay, and Google here, has demonstrated leadership in this area, and provides guidance for all of us to learn from in a new book, “Smart Business,” by Ming Zeng. Ming is the former chief of staff and strategy advisor to co-founder Jack Ma for over a decade, and outlines five key steps for automating decisions today as follows:

  1. Log and use consumer behavior and product transaction data. In my work with small businesses and startups, I routinely find owners who rely on guessing at key customer drivers, and let their passion drive product focus, rather than data. They think they are saving costs by not using the latest technology to capture data, and minimizing storage.

    In China, even tiny bike sharing companies now have to digitally track every bike through GPS, and every mobile interaction between a bike and a rider to compete. No human or paper tracking systems are a competitive alternative. The days of manual reservations and receipts are behind us, whether it be with rides, clothing, meals, or entertainment.

  2. Configure every decision step into real-time software. Businesses must capture every business decision activity, including customer relations, in digital software so that decisions affecting the activities can be automated and optimized through machine learning. This is a new class of software that can adapt in real time to market changes.

    In the bike rental business, all operations and rental decisions are made completely by software, with no human intervention. The efficiency gain is tremendous. The software directs humans and trucks to balance the tide of idle bicycles to other areas of a city where the demand is higher at the moment, rather than humans directing software.

  3. Get data flowing, and machines talking to each other. With today’s technology, data flow and coordination are readily achieved through common Internet protocols and application programming interfaces (APIs). These allow applications to communicate automatically and almost instantly, even over long distances, to mobile and IoT devices.

    Way back in 2002, Jeff Bezos at Amazon issued an ultimatum to completely institute internal APIs within the company, and later to their millions of suppliers. Through this focus, Amazon has become one of the first trillion dollar companies, and continues to expand its reach beyond books, e-commerce, and now into groceries with Whole Foods.

  4. Record live data in full for all internal business elements. The opposite of live data is static data that is sampled or profiled for analysis at a later date. Live data also requires metrics and infrastructure that can interpret and evaluate the data, and smart businesses must develop these in the algorithms they use in their data-intelligence engines.

  5. Apply machine-learning for real-time software decisions. Intelligent real-time software decisions are quickly replacing after-the-fact analytics. Only with full live data, built-in metrics, and artificial intelligence to iteratively improve the decision process, can your business keep up with the pace of change, and unique markets around the world.

Uber’s algorithms match car and driver, minimizing wait times and making mapping calculations in ways that no human dispatcher could match. Google search rankings are updated many times a second, based on new info and your profile changes. If your business is not powered by an algorithm, you don’t have a competitive business today.

These steps lead to what Zeng defines as a customer-to-business (C2B) model, where every direct interaction with customers sets into motion a striking reorientation of all business activities, and builds a feedback loop from customers. This allows businesses to automate all decisions productively, to scale and compete effectively, in tune with trends and new marketplaces.

Marty Zwilling

*** First published on Inc.com on 09/17/2018 ***

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