Wednesday, January 30, 2019

It Takes Courage In Business To Change The Status Quo

According to recent articles, more than half of the businesses that once appeared on the Fortune 500 list have disappeared in the last twenty years, and the rate of departure is increasing. I’m convinced this is happening because most companies don’t have the courage to keep up with the escalating rate of change in the market today. Business as usual is no longer good enough.

From my years of experience in big companies, as well as startups, I can attest that the courage to promote change is not something often seen, or even encouraged, in most employees or executives. Rather, the opposite is usually true; it’s better to play it safe, rather than risk being wrong.

The problem is that most business people associate the word “courage” with excessive risk, to be left for individuals who are impulsive, foolhardy, or even crazy. I like the more appropriate definition of courage, and how to use it in business, in a new book, “Return On Courage,” by Ryan Berman, whose leadership consultancy has trained many brands how to do it right.

He outlines a five-step process which I recommend for every business leader who wishes to train himself, his team, and his organization to take thoughtful, calculated risks, whether it’s about developing a new product, implementing an innovative strategy, or simply voicing an opinion that upsets the status quo:

  1. Utilize your core values as decision-making filters. To survive these tumultuous times, you must first look deep within to find your guiding principles. These will help steer you away from decisions that might look attractive for short-term success, but detrimental for the long term. Courage is being able to live these values, and stick with them.

    For example, if you and your company profess and live a commitment to environmental sustainability, like Patagonia, you will only add products that won’t harm the environment, even if other options appear to be available for a lower cost or quick availability.

  2. Use your leadership to create and rally believers. Every strong company has leaders who create believers, by setting the vision, garnering trust, and speaking the truth on all issues. You need to make believers out of your board, employees, prospects, as well as customers. These people will then solidify your courage and support needed changes.

    The alternative is fake believers, who may appear to support you in good times, but will challenge every change decision, or work against you behind your back. Fake believers will erode the motivation and productivity of all teams, to the detriment of your company.

  3. Transform business fears into courageous solutions. Proactively seek out product, service, industry, and customer perception fears rather than suppressing them. This will allow your company to conquer the most complicated change requirements in a timely fashion with solutions that eliminate many of the difficult progress-halting hurdles.

    For example, most experts believe that Blockbuster knew and feared the movement to streaming movies, but suppressed it. They marched firmly ahead with their existing model, rather than reinvent themselves in the face of customers demanding change.

  4. Commit to an authentic and memorable purpose. Showing a commitment to a unique rallying cry, such as SpaceX with Elon Musk “putting a man on Mars,” will make your company memorable and increase acceptance, both inside and outside the company, of courageous changes and innovations that seem to be consistent with this purpose.

  5. Demonstrate a consistent propensity toward action. There is no stronger element of leadership than demonstrating the courage to take consistent and regular action on your ideas and innovations. Some people and companies are prone to extended studies and slow implementations of change. Time is of the essence in the business world today.

From aspiring entrepreneurs, I often hear lengthy dissertations on a “great idea,” and how much this idea could be worth. I have to remind them that investors see ideas as worth very little – the value is all in the implementation and delivery. The same is true of required innovations as the market evolves.

With the steps outlined here, you too can build and lead a culture of courage in your organization and your company. It will allow you keep up with a dynamic market, and stay ahead of the host of competitors that are less courageous, more risk averse, and prefer a “play it safe” strategy. That’s the real definition of courage in business.

Marty Zwilling

*** First published on Inc.com on 01-15-2019 ***

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Monday, January 28, 2019

10 Collaboration Myths No Entrepreneur Should Believe

If you listen primarily to the popular press, you could easily be convinced that all successful startup businesses are built by one smart person, such as Mark Zuckerberg at Facebook, or Jeff Bezos at Amazon. In reality, it takes a collaboration of many good people to build and run a business, even though the original idea probably did come from that innovative entrepreneur.

Thus a key skill and focus for every aspiring entrepreneur is the ability to collaborate with others who have the complementary skills in delivering the many decisions required in business, including marketing, financial, operations, and support. Solo or autocratic entrepreneurs usually don’t survive, due to required skills and a workload far beyond the capacity of a single human.

Yet there are many myths around collaboration that convince some to distrust or discount its value, or use it ineffectively. Here are some of the common ones I hear, with my view on the truth and the myth antidote:

  1. Collaboration implies consensus and compromise. In reality, collaboration with team members who have different expertise or come from different cultures opens more possibilities for making the best decision in a world of unknowns. It also leaves everyone with buy-in, while consensus and compromise imply win-lose or less than optimal results.

  2. Open-plan offices are required to facilitate collaboration. Open office plans simply squeeze more employees in less space, and often reduce productivity and collaboration, due to noise, distractions, and constant interruptions. The best collaboration is done in a structured team environment, usually a meeting room, and managed by a team leader.

  3. Solutions through collaboration take too much time. Quick decisions may be better than no decision, but arbitrary or autocratic decisions based on no data or no insights may actually cause more damage than no decision. Collaborative good decisions recommended by a well-rounded team can be made quickly and effectively.

  4. Company founders can edict collaboration in teams. Collaboration has to start at the top. The actions of a founder, more than words or policies, set the culture. This has to start with good communication and participation from all executives, as well as listening and providing constructive feedback. Effective collaboration requires trust at all levels.

  5. Technology startups need experts more than collaboration. Technology alone doesn’t make a business. It has to be easily used, personalized, marketed, and supported. This requires innovative thinking outside the box, from a variety of disciplines, all working as peers. Experts working alone often fall victim to myopia and technical bias.

  6. The best new ideas come from leaders and executives. Good ideas come from everywhere, so the more voices and collaboration, the better. Often the lowest level customer-facing team members have a better idea of trends and competitive alternatives in the marketplace. Top management can then manage resources and implementation.

  7. Communications training is required before collaboration. A collaborative culture facilitates improved communication skills, as team members play to their strengths, and learn to be authentic and genuine. The best training is always learning by doing, with mentoring, for understanding alternatives and the ability to reach agreement faster.

  8. Collaboration mutes the ability to recognize and reward individuals. In fact, if you participate in a collaborative process, it become more obvious which individuals are most often suggesting innovative approaches, or make the best arguments for a successful solution. Thus collaborative environments often highlight rewardable individuals.

  9. Deploy the right tools and collaboration will happen naturally. Good tools can facilitate the collaborative process, but won’t create the culture and trust necessary for effective results. Deploying collaboration tools and platforms, such as Slack or Workplace by Facebook, are certainly a part of the solution but they are by no means the solution.

  10. Team members instinctively know how to collaborate. Everyone’s interpretation of what it means to work collaboratively is different, so every organization needs to provide a clear set of guidelines on how people should interact. This should include a clarification of attitude required, cultural guidelines, tools, and abilities and skills to master.

Building a collaborative culture is not an easy evolution from a long-established authoritarian environment, so it pays to get it right the first time in your new business. It also may be a hard concept to accept if you are a fiercely independent entrepreneur driving an innovative vision. Yet in my experience, it’s a required step today for transforming an idea into a sustainable business.

Marty Zwilling

*** First published on CayenneConsulting on 01/09/2019 ***

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Sunday, January 27, 2019

7 Recommendations For Building Your Brand With A Blog

Blogging has come a long way in the past few years, from a social release for narcissists, to today’s required vehicle for promoting your consulting business and gaining valuable online exposure. Even with product businesses, it’s the ultimate way to build your brand credibility, bring in customer leads, and get feedback from your target market.

Let me be clear – a product or consulting startup today without a blog, even with a static website, risks not being competitive in cost and time to reach and hold that critical mass of online customers. If you can’t justify both a web site and a blog, skip the old-fashioned web site, and make your blog do double duty as described below.

The challenge, as with all new technologies, is to make it work effectively, and avoid wasted effort and expensive mistakes. Here are some tips I’ve gleaned from experience:

  1. Lead with your blog. You should start blogging about your business before you have a product, to test interest and establish your credibility. Several free blog platforms, like WordPress, are so flexible that you can configure them as a website, as well as your blog, without separate hosting.

  2. Add content regularly. Every business wants their web site to appear on the first page of search engine results from a relevant search (Search Engine Optimization). Blogs help because sites that update data frequently get higher SEO rankings. When you post to a blog multiple times each week, you content is constantly changing and growing.

  3. Anchor the blog in your domain name. If you do have a separate web domain name, like ‘www.domainname.com’, then your blog name should be the domain name suffix ‘/blog’ or ‘blog.domainname.com’. Otherwise, your blog content will be indexed separately from your web site content, resulting in a lower overall Google rank.

  4. Conversational style. Search the Internet for blogs in your industry and do a little research before you start. Studying other people’s blogs will help you identify what you like and don’t like, and how you want yours to look and feel. An informal writing style is generally recommended.

  5. Add outgoing links. For example, if you mention an article you read in XYZ magazine, make sure to include a hyperlink to the article. Your readers will appreciate the option to view the sites you reference, and having links pointing to other sites will further improve your search engine rankings.

  6. Create incoming links. Promote your blog by including your blog link in your e-mail signature, on your website, in social networking profiles, and by providing signed comments to other blogs on a daily basis. You should also submit your blog name to directories such as BlogCatalog and Best of the Web Blogs.

  7. Leverage blog content. It doesn’t take long to build up a sizable amount of blog content. You can repurpose your posts into articles, books and reports. Many bloggers have found publishing success and Google ads revenue from the blog to be a substantial source of revenue to bolster their mainline business.

Finally, if you don’t have the time, energy, or skills to write a blog, it may be a good investment to hire a ghost writer, or hand the job over to your marketing executive. Don’t be shy, I don’t know many CEOs today that write their own speeches and marketing materials. Focus on what you do best, and let professionals do the rest for you.

To be successful, you have to get your message out there, and make your company stand out above all the clutter. Use the social networks, like Twitter, to ‘pull’ in the business. Be a blogger today, and trump your competitors tomorrow.

Marty Zwilling

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Saturday, January 26, 2019

8 Keys That Separate Lifestyle From Growth Startups

Until the recession a few years ago, market research indicated that as many as 90 percent of the roughly 20 million American small business owners were motivated more by lifestyle than growth and money. More recently, the desire for extra income has become the key driver in new startups, according to the popular press. It seems that more people are focused on money today.

Being called a lifestyle entrepreneur should be a point of pride, not an insult. The term applies to anyone who places passion before profit, and intends to combine personal interests and talent with the ability to earn a living. This usually means not taking money from equity investors, since investors want fast growth, high profits, and an exit event, to allow investments to be recouped.

Of course, even lifestyle entrepreneurs want to be happy, and want their business to be “successful.” According to William R. Cobb and M. L. Johnson in their classic book, “Business Alchemy: Turning Ideas Into Gold,” these different success expectations are what separates a lifestyle entrepreneur from a growth entrepreneur:

  1. Owner is the only one “in charge.” Every lifestyle entrepreneur starts their business to be their own boss and follow their passion, so they don’t even think about having investors, a board of directors, or going public. If you think corporate bosses are tough, wait till you start spending investor money, or try satisfying Wall Street and stockholders.

  2. Insist on being engaged at the transaction level. If you are living your passion, you want to interact with customers, and “touch and feel” the product every day. Growth entrepreneurs find that this fun world quickly changes to managing personnel problems, tuning organizational structures, and dealing with testy investors.

  3. Income generated is part of the owner’s personal income. The legal structure of these startups is usually a sole proprietorship, a Limited Liability Corporation (LLC), or a sub-chapter “S” Corporation. Under all of these, net income flows easily into your personal income. Corporate versus personal growth really becomes a lifestyle decision.

  4. Startup funding comes from personal savings and family. There is no free lunch for money. Non-equity funding has to come from personal sources, or government grants, or bank loans. Of course, that doesn’t dilute the owner’s equity, but it may well limit you to organic growth, versus international rollouts and acquisition options.

  5. Business model to maintain lifestyle is the primary driver. The lifestyle entrepreneur chooses a business model to make a long-term, sustainable and viable living, working in a field where they have a particular interest, passion, and talent. They operate the business to sustain a minimal level of cash flow necessary to support the lifestyle.

  6. Maximizes owner personal tax privileges. This means that owners can look for every opportunity to get a personal tax advantage from the business, like charging vehicle operating costs to the business, renting facilities from themselves, or managing business and personal travel.

  7. Enjoy being visible and active in the local community. Lifestyle business owners usually benefit and enjoy being a part of the local Chamber of Commerce, Rotary, and other civic organizations. These can become part of balancing your lifestyle, rather than part of the stress of business-driven networking.

  8. No exit planned until retirement. A lifestyle business becomes an integral part of an entrepreneur’s identity and their life. If, and when, the time should come to “exit” from the business, they will often seek to transfer it to a family member, or simply close it down.

In my view, lifestyle entrepreneurship should be growing in popularity, rather than shrinking, as technology provides startups with the cheap digital platforms needed to reach a large global market. Also, more women have been jumping into entrepreneurship, and they have long wanted to make their business and personal lives and aspirations work more in harmony.

Younger Gen-Y entrepreneurs also tend to be more passionate, idealistic and not driven by money, so I would expect to see them trend up in lifestyle entrepreneurship. I’m told that Mark Zuckerberg of Facebook started out as a lifestyle entrepreneur. I wonder if his billions today have changed his mind?

Marty Zwilling

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Friday, January 25, 2019

How To Boost Your Selling Skills And Win In Business

Image via Flickr by Alan
Most of you who start new ventures don’t think of yourselves as sales experts. In fact, you may feel on the opposite end of the spectrum, more focused on delivering the perfect solution and managing the finances to grow the business. Yet in today’s competitive and rapidly changing world, top notch sales and marketing skills are critical to the success of every business.

As an advisor to technical entrepreneurs, the most common mistake I see is the “If we build it, they will come” approach with no sales plan, under the assumption that the technology is so spectacular that customers will buy the product. In todays’ rapidly changing world, there are over 30,000 new products introduced every year, so it’s easy to slip into that unseen majority and fail.

Thus, in my view, it’s never too early to brush up on your selling and marketing skills. Here are the key steps I have found to work from my own experience in large companies, as well as startups:
  1. Practice showing some passion in every conversation. Being positive and excited about what you offer should not be reserved for stand-up pitches and closing large deals. Everyone inside your company, as well as potential customers, needs to be inspired by your message before they believe it. Stand tall - keep your fears and doubts to yourself.

    It always helps to ask questions first, and keying off an element of passion in the other person’s perspective. For example, if they show a passion for fitness and life balance, highlight how your solution shortens the time and pain of solving their business problems.

  2. Work hard on perfecting your value proposition. The value of your solution may be self-evident to you, but everyone has a different perspective. Make sure you engage fully and often with your ideal customer, to understand what will appeal most to their heart, mind, and pocketbook. Then craft an irresistible pitch, and iterate often to keep tuning it.

    Effective value propositions are quantified and personalized for each customer or target segment. For example, “reduces your cost per application by 30 percent” is far better than “easier and faster to apply.” Eliminate the fuzzy hype words from your message.

  3. Hone in and capitalize on your best assets. Your strongest asset may be your personality, expertise, location, or your solution. Highlight what you do best, unique benefits to your customers, and an honest statement of why you do what you do. Make it real for your customers with professionally prepared collateral based on these assets.

    Dale Carnegie, for example, was recently ranked as one of the ten greatest salespeople of all time, by virtue of his presence and conviction, even though his courses on public speaking contained no great innovations or breakthroughs. He was the asset he sold.

  4. Build real relationships with people who can help. Starting and growing a business is not a solo operation. You need all the help you can get, and people will help you if they know and trust you. These may be partners who can complement your skills, mentors who can show you what you need, or customers who can be your best sales people.

    Even the most successful business executives have mentoring relationships with helpful peers. Bill Gates has a long-standing mentor relationship with Warren Buffett, and Mark Zuckerberg openly acknowledges that he was mentored in the early days by Steve Jobs.

  5. Don’t forget to ask for the close with confidence. You can’t win if you don’t ask, and confidently asking a customer for their decision shows leadership on your part. The best sales people look for ways to inspire a customer's emotional involvement, create the urgency to take ownership, and then ask for the decision. Don’t be shy on this point.

    Five basic rules for closing include treating closing as a process, setting a closing objective, waiting for the right moment, wrapping a conversation around it, and then celebrating every victory. If you can’t close deals, you don’t have a business, no matter how great the product.
I’m not suggesting that you as the business founder has to do all the selling, but you do have to be the role model that the rest of team follows. You also have to deeply understand what sells to your customers, or you can’t properly lead the other key business areas of development, finance, and operations. In reality, leadership requires first selling yourself, so these same steps apply.

Marty Zwilling

*** First published on Inc.com on 01-11-2019 ***
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Wednesday, January 23, 2019

How To Take Your Business Idea From Dream To Reality

Image via Pixabay
In my role as a new business advisor and occasional investor, I hear lots of people talking about their dreams of “someday” starting and running a new venture. They can talk with passion about their innovative new idea, and ask lots of questions, but never seem to really get started. The challenge we all have as business founders is to move from the idea stage to a real business.

The solution I recommend is to move forward with a few quantifiable steps, to turn your dreams into specific goals and milestones, and then measure your progress and celebrate each small success in achieving these goals and milestones. I found these bite-sized chunks to be far more achievable and satisfying than making that one big step from your dream to a success business:
  1. Get the idea out of your head and onto paper. Even if it’s only a few PowerPoint slides or typed paragraphs, writing something down is the first step toward making it real. The process will force you solidify the specifics, and mentally commit to them. Always write in the future tense, what you will do, and name yourself as the key person responsible.

    Before you know it, you will have a ten-slide pitch that you can use to gauge interest from potential customers, as well as friends, family, and early investors. Suddenly you will find that writing a ten-to-twenty page business plan with details is easy rather than daunting.

  2. Create a specific plan to network to get the help you need. If you need funding, make a list of people you know who might help, and plan to attend specific business events where you can use your pitch and written plan. Do the same for partners and co-founders that will buttress your strengths. Consult with business peers to learn what you need.

    Take the initiative to join recognized new business support groups and the local chapter of relevant industry associations to meet people you can help, as well as people who can help you. Don’t forget the local Chamber of Commerce and local business executives.

  3. Set target date milestones and metrics to gauge progress. Pick a reasonable desired business rollout date, and work backward, assigning completion dates to all the interim tasks required. Quantify expected results, and the measurements you will use. Your goal should be smaller chunks and more milestones, allowing regular celebration of progress.

    For example, every business needs a company name and logo, incorporation, an Internet domain name and website, social media accounts, prototypes, intellectual property, and key executive positions filled. Set milestones for each and measure progress to success.

  4. Take action on your plan, and finish something every day. You need to build momentum, and every milestone completion builds momentum. Celebrate each step forward, and check off completions to keep the team motivated and moving forward. Don’t get caught up in the crisis of the day, or be satisfied with just working hard.

    Now is the time to build your company culture, and make it one with a can-do attitude, team collaboration, and empowered people with a constant focus on the customer. Also, your culture must be not afraid to pivot and to adapt your plan as things change.

  5. Narrow your focus daily to the key things that really matter. Dilution of focus kills too many small businesses, as they try to attract more customers and counter more competitors. The best are determined to do one thing well, rather than many things poorly, with limited resources. Time is also of the essence, so make your impact early.

    I once worked in a software startup that continually delayed initial shipment to add new features, based on feedback from early adopters and competitor concerns. The result was a product that was bloated and late to market. I recommend the minimum viable product (MVP) strategy.
For aspiring entrepreneurs and business owners, ideas will not turn into businesses, no matter how long you wait, or how hard you work, until someone builds and executes a plan with specific milestones and expected results. If your dream is to change the world in your lifetime, now is the time to stop dreaming and start executing.

Marty Zwilling

*** First published on Inc.com on 01-09-2019 ***
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Monday, January 21, 2019

5 Keys To Starting A New Venture In Your Local Town

Image via Wikipedia
From the advice I hear these days, if you want to be a successful entrepreneur, you need to be in Silicon Valley, Boston, New York, or one of the few other financial hubs around the world. What does that mean for the rest of us, who reside or grew up in the thousands of small towns that cover most of the landscape? Is entrepreneurship ever viable or recommended in a small town?

I was pleased to see these questions addressed in a new book, “Small Town Big Money,” by Colby Williams, focused on entrepreneurship and opportunity in today’s small towns. Colby is a living example of how it works there, starting with his Parengo Coffee Shop in Sikeston, Missouri. He offers some practical entrepreneurship lessons I most often see talking about Silicon Valley:
  1. You still need a good business plan to start. As an advisor to aspiring entrepreneurs, I’m still surprised at how many people believe the myth that business plans are only required to appease big investors. In reality, a business plan has real value for every entrepreneur, since most people can’t build and retain a complete plan in their head.

    Especially in a small town, for credibility, you need to quantify your plan consistently to local leaders and organizations, as well as bankers and customers. Sizing the market, projecting revenue, and calculating break-even points are critical, even for a coffee shop.

  2. Don’t get too comfortable – take comfort in fear. Don’t expect any entrepreneurship venture to be comfortable. There are too many unknowns, whether it’s a building a coffee shop or producing electric cars. If you are looking for comfort, stick to that nine-to-five job. Being an entrepreneur anywhere without fear likely means your business is at risk.

    For example, in a small town with no other hardware store, you may be lulled into complacency as customers flock in at any price, but soon a competitor will pounce. Work to build memorable customer experiences today, or the store may be empty tomorrow.

  3. It still takes collaboration to build a business. No matter how hard you are willing to work inside the business, you still need external relationships with suppliers, people in your business network, and your community. In small towns, this may mean sponsoring local events, supporting complementary businesses, and community involvement.

    In any business, collaboration is really your ability to move people from customers to fans to friends. This is often more important than your product or service, and it requires letting the “real you” show, really listening, and responding. All businesses require collaboration.

  4. Brands are all about a story and selling an experience. More than a product or service, you are founding a brand when you start a new venture, large or small. You are selling an experience. In today’s world of social media and the Internet, people want to know who you are, what makes you outstanding in your field, and relate to your vision.

    We all know the fate of too many small town restaurants, started by someone who loves to cook and expects the food to do the talking. Every ad, every review, or lack of one, tells a story about how much you care, and what customer experience one might expect.

  5. Don’t forget to stay a step ahead of the market. Businesses that never change are now forgotten. I still remember when every small town I knew had a Sears store and a JCPenny. Even if your town never seems to change, there are always changes in trends, people, and technology. Entrepreneurs not innovating are actually losing ground.

    High-tech ventures in Silicon Valley know they have to constantly innovate, but small town coffee shops can easily forget. Yet the best are always offering new flavors, new specials, new decors, and ways to reach new customers. People flock to the new.
I came away from this book with two takeaways for every entrepreneur: 1) The opportunities are more abundant in a million small towns than in a few sacred hubs like Silicon Valley; and 2) The ingredients for success are the same all around, with a healthy dose of localized flavor.

So for those of you want to be entrepreneurs, but don’t relish the thought of leaving the community that you know and love, now is the time to get started. Small things can easily grow to be the empire and legacy you always dreamed about.

Marty Zwilling

*** First published on Inc.com on 01-07-2019 ***
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Sunday, January 20, 2019

10 Scams To Avoid While Seeking New Venture Funding

Image via Flickr by ivanpw
Some aspiring entrepreneurs are so desperate for funding, or naïve, that they ignore the obvious signs of scams and rip-offs on the Internet, praying for a windfall. One would think that with all the sad stories and tools published over the past twenty years, this problem would be behind us. But people are still begging for more technology or laws, often to protect them from themselves.

As examples, I present my list of ten of the most common ways entrepreneurs can be victimized by ignorance or greed, based on questions and stories I get from entrepreneurs and associates. Most of these are easy to avoid if you do your homework up front, but can cost you dearly if you get sucked in. Use the common sense suggestions to avoid the pain:
  1. Decoy investor scam. Here someone who is not a registered financial broker contacts you on the Internet, tells you about all the people they know with money, then turns around to ask for a “retainer” or fee to cover their time and efforts. No real investor or venture capital firm asks for money from the company they are intending to invest in.

  2. Off-shore unsolicited investor offers. Unsolicited foreign investors that contact you on the Internet need extra scrutiny. If you feel confused by conflicting time zones, differing currencies, and up-front costs, it’s time to run the other way. The SEC and local law enforcement agencies can’t help you much with foreign scams.

  3. Deposit required to hold your terms. In this scam, you are offered a very attractive term sheet due to close in 90 days or so, with a deposit required to hold your position while due diligence is being conducted. Don’t count on ever passing due diligence, or even getting that deposit back. Professional investors don’t work this way.

  4. Loan offer in lieu of investment. Watch out for unsolicited loan offers via the phone or Internet that seem to offer quick approval, but require mandatory “premium fees” or “processing fees” up front, payable by money order or electronic transfer. Even if you pay the fees, you probably won’t see the money and won’t find the lender.

  5. Phantom fund investors. These solicitations, usually via the Internet, claim to represent a large fund that they can’t disclose, until you have been “qualified” for the investment. They promise to provide all the info at the time of close, after you sign a non-disclosure agreement. The close will never happen, but you will be stuck with large services fees.

  6. Pump and dump stock schemes. Don’t fall for claims from “insiders” who offer stock that you can turn around quickly. It’s usually stock that has been artificially pumped up by their big buy, who take their gain when you buy, and leave you with a big loss on their dump. A variation is “short and distort”, where their profit comes from short selling.

  7. Work at home to fund your startup. Beware of any offer that asks you to spend money before you can make money, to buy a starter kit, education, or tools. For more details, see this recent article from the The Penny Hoarder outlining the most common pitches to avoid.

  8. Cash transfer assistance funding. I continue to be amazed that some government agency reportedly still gets 100 calls per day from victims of the Nigerian unclaimed cash scam alone. People who fall for this one must be really greedy. The best answer is the age-old wisdom that if it sounds too good to be true, it’s not true. Delete the message.

  9. Chain emails leading to a windfall. This is the classic pyramid scheme where you get an email with a list of names, asked to send a few dollars to the person at the top of the list, add your own name, and forward the updated list to a number of other people, resulting in a huge return to you. You risk being charged with fraud if you participate.

  10. Won the lottery. How can you win a lottery you never entered, usually in another country? A simple inquiry or response to one of these emails will get you permanently tagged as a prime scam candidate, meaning a flood of new deals. Delete these quickly.
Beyond the cases mentioned here, if the message or approach sounds suspicious, I recommend you visit Snopes.com, a website detailing thousands of known scams and hoaxes. With this website, and about 75 others like it, I find it hard to believe that user naïveté is the problem.

If people could get past their greed, hubris, sense of entitlement, and use common sense on the Internet, these problems would fade away due to lack of return. I’d much rather see your entrepreneur resources and energy focused on real opportunities to improve the world we live in.

Marty Zwilling
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Saturday, January 19, 2019

6 Communication Elements Required For Every Business

Image via Wikipedia
Effective communication is an absolute requirement for successfully starting a business, but it doesn’t come naturally to many entrepreneurs. Communication is considered a social skill, and inventors and engineers, for example, are not known to be social butterflies.

Founders have to communicate their ideas and products to investors, business partners, and the rest of the team. Then, hopefully, come customers, distribution channels, and going public or merging with an attractive buy-out candidate. Communication is not just talking, but also writing, body language, and “actions speak louder than words.”

John Spence, in his classic book “Awesomely Simple” says that the single biggest problem he has to deal with in client companies worldwide is the lack of open, honest, robust, and courageous communication. He narrows down the problem to the following six aspects of communication, and I agree:
  1. Honesty. This element is without question the most important in building strong communication in a startup. The implementation is simple – just tell the truth all the time, every time. It’s a lot easier than trying to remember what you said the last time, and people notice quickly. Build a culture of truth, and others will follow your lead.

  2. Empathy. It is one thing to be honest; it is another thing to be brutally honest. Tell the truth in a frank and direct, yet respectful and empathetic, way. Shoot straight with people, but don’t shoot them between the eyes. Body language and sincerity are important here.

  3. Courage. You need the courage to put even the most difficult and challenging subjects on the table and lead the discussion. Don’t wait until tomorrow, hoping the problem will go away. Courageous means that team members have the nerve and confidence to question authority, rather than dutifully fall in line behind a bad direction.

  4. Safety. If you want people to tell the truth, you have to make it safe for them. Here is where your actions speak louder than your words, and louder than any written policies. If you obliterate someone for telling you the truth, you will never hear the truth again. If you are caught in a lie once, you will never be believed again.

  5. Intellectual rigor. Although people should be safe, ideas should not be. In an intellectually rigorous culture, theories are tested, and people welcome, even encourage, critical examination of ideas and information, regardless of the source. The goal is for only the strongest ideas to survive.

  6. Transparency. The hallmark of great leaders and organizations is that they share as much information with all of their stakeholders as often as they possibly can, in multiple contexts. Yet many leaders will tell me that they are continually amazed to hear the common complaint “why didn’t anybody tell me this was happening”.
Spence says that the best way to improve your organizational communication levels is to improve your own interpersonal communication skills. Luckily, these are skills that can be taught and learned. It takes practice and hard work, but with time, it is possible to greatly improve.

The key skills for superior interpersonal communications are effective use of body language, focused listening, expert questioning, using multiple sensory modes, providing both logical and emotional arguments, and listening for ambiguous or emotionally loaded words. But these are subjects for another day.

If you are one of those entrepreneurs who struggles with every email you write, take heed of the importance of the basic principles above, and take inspiration from the fact that you can and will improve your skills, if you are willing to work at it. But make no mistake about it, being an entrepreneur who does not communicate is not an option. Start today, and do it every day.

Marty Zwilling
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Friday, January 18, 2019

10 Tips For Rising Above The Crowd In Your Business

Image via Pixabay
Everyone knows that that startups are risky, but they also expect that the job will be exciting and potentially very lucrative (think early employees at Facebook and Google). Yet we have all heard stories about the high turnover, unstructured work environment, lower base pay, and unpredictable expectations from the top.
Assuming you are lucky enough to get hired, what can you do to survive, and even stand out above the rest in this environment? Here are some tips from a classic book by Harvey Mackay, “Use Your Head to Get Your Foot in the Door,” which work even better in a startup than they do in a bigger company:
  1. Make yourself indispensable. The truly indispensable person in a startup is a problem solver, because every startup has plenty of problems. Very few people are willing and able to take on any challenge, and make it work. You can’t outsource that one.

  2. Volunteer. This is related to the first item, but more specifically means the willingness to take on tasks that others could and should do, but hate to do. There will always be a place in this world for the person who says, “I’ll take care of it.” And then does it.

  3. Stick out and shine. Many employees like to keep a low profile, thinking that will minimize their workload, but it also maximizes their risk. It pays to be visible in any way that’s positive for the company. It could be managing the company picnic, or being the office “go-to” person for computer questions.

  4. Don’t hang out with gloom and doom. Some people love to gripe about management, the pay scale, and career opportunities. Even if you never utter a negative word, don’t tag along with this bunch, or you will be written off as a silent sympathizer.

  5. Be a builder … and a rebuilder. When the organization changes, be the first to help the new organization work, even when it costs extra hours and sweat. If you see a customer service problem hurting the company, step up proactively with a proposal to fix it.

  6. Always position yourself as number two to your next career opportunity. Initiate activities that improve your chances of being the chief’s backup. Then focus on ideas that will likely get your boss promoted. You will likely be the dark horse that fills the slot.

  7. Persevere. In a struggling economy, it’s so easy to throw in the towel. Executives always have their eye out for people who do the opposite and engage in tough challenges. These are the ones who stick with finding a solution even after many reversals.

  8. Educate yourself one notch up. Study the resumes of managers on the next level and do your best to match or even surpass their career credentials. Not just degrees, but loading up on books, business journals, and blogs that your top executive favors.

  9. Pay attention to your image. You attitude and the clothes you wear assert your authority to subordinates, peers, the media, and customers. Your company is spending real money on its image, so make your own personal “brand” an asset to the company.

  10. Think big picture. Some issues aren’t worth winning. You can win the battle and lose the war. If your boss takes credit for one of your ideas, use it as an opportunity to point out how you think alike, rather than berating him in public for the lack of attribution.
In the real big picture, if your prime focus is keeping your current job, you are already in trouble. You should be thinking about your promotion to the next level in this company, the next level in the next company, and then on to starting your own company. The satisfaction of creating jobs is a lot greater than keeping this one.
Marty Zwilling
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Wednesday, January 16, 2019

Creating the Next Big Startup Takes More Than Passion

next-big-thingEvery aspiring entrepreneur I know is convinced that his or her idea could be the next big startup, blossoming into a billion dollar unicorn. Yet I find that only a few are able to put their passion aside for a moment, and compare their solution to the attributes that really attract a large market of new customers. Investors, on the other hand, make it their business to look for these attributes.

For example, it’s always smart to start by making your entrance into a hot sector. According to Inc data analysis from industry experts and investors, this coming year offers large opportunities in digital therapeutics and personalized nutrition. Most trend watchers agree that it is time for a revolutionary new category of medicine treatment devices and customized healthcare solutions.

Thus if you need funding to support your efforts, it’s well worth your time to take a hard look at how your offering might fit one of these sectors to appeal today to this new era of customers, as well as investors. In my experience the key attributes in any sector would include the following:

  1. A product or service with depth and a robust set of features. As an investor, I always look for a singular focus to start, but a depth of follow-on that precludes you from being a “one-trick pony.” Customers will remember you and your brand for starting with a point of excellence, but they expect that to broaden as their needs and confidence in you grows.

    Amazon exemplified this approach by first becoming the premier source of books online, and then expanding their scope to having the greatest depth of all e-commerce offerings and features, while still maintaining their lead in online purchasing and delivery services.

  2. Solves a real problem for customers in intelligent new ways. Smart solutions provide benefits that can be quantified, not simply cool or easier to use. Customers don’t want to read instruction manuals these days, or attend a class to learn about features. The best solutions look obvious in retrospect, and you wonder how you ever lived without them.

    For example, the IPhone from Apple, although an integration of complex computer services with telephony and photography, is so easy to use that preschoolers catch on immediately, and most of us can’t imagine surviving without a mobile link to friends.

  3. Provides a complete and memorable customer experience. Customers today are looking for an engaging total customer experience, including shopping, reviews from peers, speed of delivery, and follow-on options, as well as support and service. They expect to be wowed by the product as well as the relationship with you and your team.

    In fact, customer experience can be a greater competitive advantage than your product. Zappos, the popular online shoe store, creates such strong emotional connections with customers through personalized service that people rarely compare their shoe features.

  4. Increase customer confidence and ability to control their life. Both business and consumer customers expect products to empower them to make better decisions, and have more control over their life. If your solution simply reduces the cost of a necessity, or makes things happen faster, it may not be enough to attract a dedicated following.

    In the healthcare arena, as mentioned earlier, people now are looking for new offerings that can be customized per their own unique needs and desires, to extend their lives and maintain healthy lifestyles. More diagnostic tools to fix problems may not be competitive.

  5. Satisfy a “higher purpose” as well as a current need. Customers these days seek out companies that are socially and environmentally conscious, as well as responsive to customer needs. This should be something that matches your values, and can benefit from your strengths, to increase engagement and energy for all stakeholders.

    Chipotle is an example of a company that has capitalized on the benefits of supporting a higher purpose, enhancing their fast food brand reputation at the same time. Their focus on healthy foods and sustainable agriculture motivates employees and customers alike.

In summary, the best product or service is a deep-featured one that innovatively meets customer needs, comes with a great total customer experience, puts customers in the driver’s seat, and has a positive societal impact. Then just build a solid plan, find a great team to implement, and execute well to build the next big startup, have fun, and leave a great legacy.

Marty Zwilling

*** First published on Inc.com on 01-02-2019 ***

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Monday, January 14, 2019

6 Leadership Insights To Inspire New Venture Founders

business-inspired-leadershipStarting and building a company is all about leadership – formulating an idea, building a unique plan based on vision and experience, and forging a path over and through all obstacles. Yet the image of leadership in business is at an all-time low, according to national leadership experts, considering the political debacles, record business bankruptcies, and executive fraud cases.

If the country is to recover financially and politically, new leaders will have to emerge to fill the leadership deficit – new leaders who understand that leadership is a privilege, not an entitlement, according to executive coach Michael Schutzler in his classic book “Inspiring Excellence – A Path to Exceptional Leadership.

Entrepreneurs are well positioned to become the new leaders, because they perceive problems as opportunities, and have the mental mindset to innovate and execute. They have the required passion, perseverance, and work ethic. What they don’t have by default are the skills required, or the relationships. These don’t come automatically with the CEO title.

Schutzler’s view of leadership is different than many academics and executive coaches, who feel that leadership is an innate character trait. He urges people to focus on developing a few key relationship skills, and I agree. Here are some key conclusions:

  1. See leadership is a learned behavior, not a character trait. Good judgment, for example, is certainly a hallmark of exceptional leadership, but it isn’t something you are born with. “More than anything, good judgment comes from listening,” he says. It also comes from paying very close attention to every situation, and learning from it.

  2. Listening is the most important skill for a leader. We need to pay attention to the words and actions of others while suspending judgment long enough to allow your intellect to catch up with your instincts. Why? Because as leaders, if we speak too soon, we shut off creation. We shut off contribution. We force the adoption of our ideas.

  3. Communicating and storytelling. This is not a skill everyone is born with, but it’s a skill we can all develop. People on your team want to believe! They want to believe you know where we are going, or you will get us there even if you aren’t sure of the exact path at this moment. They want stories that compare what they are doing with others.

  4. Acknowledging contribution. This is necessary to sustain motivation during the hard times. It’s not hard to do and doesn’t require a lot of effort or expensive gifts. A thank-you note or peer recognition is enough most of the time.

  5. Negotiation is a practical skill for every leader. Negotiation is often misunderstood to be the domain of clever deal makers. It’s actually really simple. Make very clear requests for a promise. Understand exactly what the promise is - what is being done, when, and what the standard of excellence is, and then check up on the status to make it happen.

  6. Inspire others rather than focus on personal ambition. He believes that we need leaders who use power as a tool for inspiring others to create a better future, not as a tool for retaining their position or perks.

The middle four points are the essential skills for great leadership, inspiring excellence, and building a successful business. They are easily practiced, and serve as the foundation for successfully attracting talent, reaching consensus, making tough choices, and harnessing ambition.

In this fashion the general leadership deficit is really an “opportunity” for new aspiring entrepreneurs in business. So practice the leadership skills needed, and step in when you are ready. Now is your golden opportunity – let’s see how many of you are up to the challenge. We need you all.

Marty Zwilling

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Sunday, January 13, 2019

Your Passion Can Breed Biases That Kill New Ventures

icarus-qualities-businessI’m sure we have all seen entrepreneurs with high levels of passion and confidence touting an idea that seems to make very little sense to us. Of course, we never see ourselves in this mode, yet we need to recognize that all humans see reality differently through a built-in set of “cognitive biases,” based on their own unique background of experiences, training, and mental state.

These biases are good, in that they allow us to quickly filter and make decisions in the constant barrage of information we face each day, but bad because they often lead to errors in reasoning and emotional choices. The worst case is called the “passion trap,” where a pattern of beliefs, choices, and behaviors feels good and becomes self-reinforcing, but leads to disaster.

John Bradberry, in his classic book “6 Secrets to Startup Success,” identifies five key biases that sabotage many passionate entrepreneurs in their startup decision making. I challenge any entrepreneur to honestly tell me they have never fallen victim to any of these in making startup decisions:

  1. Confirmation bias. This refers to the human tendency to select and interpret available information in a way that confirms pre-existing hopes and beliefs. The antidote is to look for dissenting views that seem to form a pattern of concern. Then what you perceive as isolated exceptions, might indeed appear as a clear majority.

  2. Representativeness (belief in the law of small numbers). Many entrepreneurs tend to settle on conclusions they like, based on only a small number of observations or a few pieces of data. The new founder who hears positive reviews from three out of four friends may assume that 75 percent of the general population will react similarly.

  3. Overconfidence or illusion of control. Overconfidence leads founders to treat their assumptions as facts and see less uncertainty and risk than actually exists. The illusion of control causes startup founders to overrate their abilities and skills in controlling future events and outcomes. Both result is “rose-colored” plans, rather than realistic ones.

  4. Anchoring. This refers to our mind’s tendency to give excessive weight to the first information we receive about a topic or the first idea we think of. It encourages founders to cling to an original idea or, if pressed, to consider only slight deviations from the idea instead of more radical alternatives. The ability to pivot sharply and timely is at risk here.

  5. Escalation of commitment (“sunk cost” fallacy). Startup founders often refuse to abandon a losing strategy in an attempt to preserve whatever value has been created up to that point. They feel that they have put so much money, time, and energy into an idea or plan, that it must be the idea. Investing more into a bad idea doesn’t make it good.

Optimism, for example, is a typical entrepreneurial trait that improves performance, but only up to a point. In fact, according to a recent article, too much optimism (optimism bias) is responsible for many failures in business. There are a number of similar entrepreneurial characteristics that are recognized as good, but can be amplified to unhealthy levels, resulting in passion traps, or so-called “Icarus qualities.”

Every entrepreneur needs to be on the lookout for early warning signs of biases and passion traps that signal that you are in danger of undercutting your odds of startup success. Obvious ones are founders who are thinking or saying, “This is a sure thing,” or executives losing patience with advisors who point out risks or shortcomings in your plan.

In my experience, a great startup is more about great execution, rather than a great idea. It’s about converting your passion into economic value. To counter-balance the biases in your passion, the best approach is to look beyond your own mind and actively listen to your customers, your advisors and your team. When was the last time you really listened?

Marty Zwilling

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Saturday, January 12, 2019

The Average Startup Overnight Success Takes Six Years

overnight-successEvery startup founder knows implicitly that startup success is a long hard road. Yet we always dream that we are the exception to the rule. So once in a while it’s good to look at some facts to temper our imagination.

I was reading an old article written by marketing guru Seth Godin a while back where he mentions that “it takes about six years of hard work to become an overnight success”. Based on a small sample of household names from Bill Gates to Mark Zuckerberg, he is an optimist. Here is some data from Wikipedia:

  • Microsoft – Bill Gates founded Microsoft in 1975, to develop and sell BASIC interpreters for the Altair 8800. Six years later, he managed to land a contract with IBM to provide their IBM PC base operating system. Even still, it was another five years before Microsoft went public in 1986, making him an overnight success worth $350 million.
  • Apple - It took Steve Jobs two decades to become an overnight dot-com billionaire. Established in Cupertino, California in 1976, Apple really didn’t get on the map until the advent of the Macintosh in 1984, eight years later. Even then, it struggled through the 80’s and 90’s, until the advent of the iMac and consumer products.
  • Yahoo! - This company was founded by Jerry Yang and David Filo in January 1994. In April, 1996, Yahoo! had its initial public offering, raising $33.8 million, by selling 2.6 million shares at $13 each. Amazon.com and Yahoo! are the benchmarks in the industry for overnight success, but still required two to three years to really get going.
  • Google - Larry Page and Sergey Brin started working on Google in 1996 – but three years later in 1999, few people had even heard of it yet. But add another five years, and Google had made it, going public in 2004 with a market capitalization of $23B.
  • Facebook - Mark Zuckerberg, while attending Harvard as a sophomore, concocted “Facemash” in 2003 to get a lost girlfriend off his mind. He later changed the name to Facebook. In 2005, Facebook still showed a yearly net loss of $3.63 million. But within five years it became an overnight success, and now has nearly 2 billion users worldwide.
  • Amazon.com - Jeff Bezos founded Amazon.com in 1994 and took it public three years later, making him a multibillionaire. Amazon's initial business plan was unusual: the company did not expect a profit for four to five years; the strategy was actually more effective than his business plan predicted. Very rare case.

Take heed. These examples are generally recognized as the fastest growing companies in recent times, so your odds of matching their speed are not good. Investors will always look askance these days at a business plan which projects Amazon.com results.

With most businesses you rarely hear about the months and years of hard work behind the scenes. You rarely hear about the major catastrophes followed by major miracles that brought the businesses back from the brink. You rarely hear about the owners who took out second mortgages to make payroll or to hire a salesperson.

If you don’t have realistic expectations, you can quickly get into the wrong state of mind. You’ll be thinking that to be a success your business has to make you a billionaire in three years. Then you’ll give up way too soon.

This notion of overnight success is an urban legend, and very misleading. If you're starting something new, expect a long and challenging journey. But that's no excuse to move slowly. Many entrepreneurs think they are running, but find themselves falling farther and farther behind a rapidly moving target. Time passes quickly in this mode.

Marty Zwilling

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Friday, January 11, 2019

Your New Venture IP Portfolio Sets Investment Value

intellectual-property-portfolioA large portion of your competitive advantage and your potential value to investors is the size of your intellectual property portfolio. When someone says Intellectual Property (IP), most entrepreneurs think only of patents. In reality, patents are only one of at least eight items that should be in your IP portfolio. You need all these before you start looking for funding.

Some of the other items may cost a lot less, and may be worth far more in the long run. Here are the key elements:

  1. Company name. The company name becomes your intellectual property at the moment you incorporate your startup as an LLC or a Corporation. Sole proprietorships need to trademark the name to protect it. Select it well – marketers will tell you that you will be selling your name, more than your products. Actual incorporation fees in many states are below $100, if you do it yourself. Don’t pick a company name until you are certain that you can get the comparable domain name, so Internet brokers won’t hold you hostage.

  2. Internet domain name. This name (www.domainname.com) is just as critical as the company name, and the two should match as nearly as possible. Significant differences will confuse your customers, and open the door to imitators and scam artists. Internet domain names can be acquired from most hosting providers or Network Solutions, for as little as $10/year each.

  3. Social media accounts. Immediately go to relevant social media sites and grab the same name, even if you never plan to use the accounts. Many companies like Sears, Coca-Cola, and Twitter have already been hurt by people using company names they don’t own on social sites. These days, every business needs a blog, so sign up your domain names accounts on TypePad, Wordpress, and Blogger, or all of the above, before someone starts blogging in your name.

  4. Patents. Remember that ideas cannot be patented, only novel implementations. But the application or provisional application has to be registered before you disclose the details to investors or consumers, or the implementation will be deemed un-patentable. Attorney fees start at around $5K, but provisional patents can be filed yourself for about $300.

  5. Trademarks. A trademark is a name, phrase or logo that tells the consumer the origin of the goods and distinguishes your goods from those of your competitor. Trademarks require a federal trademark registration from the United States Patent and Trademark Office. The cost for a single trademark is less than $300.

  6. Copyrights. No registration and no cost is required to secure a copyright on written, audio, or video material that you create to be attributed to your company. Still, it is recommended that you add the familiar ©Copyright 2019 symbol at the beginning or end of each media and document segment.

  7. Trade secrets with employment agreement. Companies often use non-patentable but important trade secrets to run their business. These trade secrets need to be documented and coupled with an employment agreement, to keep them from migrating to your competitors when employees move on.

  8. Business Plan. Your business plan holds the keys to your kingdom, so you don’t want it in the hands of competitors. If you need early reviews or assistance by people you don’t know well, get them to sign a Non-Disclosure Agreement first. A sample agreement is available for free download from my website.

In cost, all of these elements of intellectual property may be acquired for a few hundred dollars (or a few thousand with an attorney), if you act early and quickly. Later, good intellectual property can be worth millions when your company valuation is set for investment purposes, or when the company is acquired or sold. In between, you need it to survive.

Marty Zwilling

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Wednesday, January 9, 2019

10 Ways To Build Trust And Loyalty In Your Business

TrustBusiness trust seems to be in short supply these days. Perhaps it’s because we are reminded daily of scams on the Internet that result from unscrupulous businesses and people. Yet if you run a business, you know things won’t get done, and most customers won’t buy, unless they trust you. Thus, it’s critical to your success that you build a culture of trust in you and your business.

It can be done, as proven by the market leaders, including Google and Amazon. According to current reports, both your employees and your customers have to feel they know you, and you know them, before levels of trust can accrue. In other words, it’s all about perceived relationships and actions. In my role as a business advisor and investor, I see this proven over and over again.

Most business leaders intuitively understand this, but many are not so clear on the specific actions and programs they need to initiate to build a trust culture in their business, and have it projected outward to potential customers. Thus I offer the following prioritized initiatives from my own experience to get you started:

  1. Make sure everyone knows the business, good and bad. As I said in the beginning, people don’t trust what they don’t know, so make sure you communicate personally to the whole team, and to customers, your companies’ vision, goals, and challenges. Hiding in the corner office, or sharing only good news, does not build a culture of trust and support.

  2. Be the role model for trust and consistency in your actions. The most effective business leaders today build trusting cultures by being visible, competent, and approachable, in the office and in the community. They are clearly in charge, but they don’t hide challenges, and are honest and vulnerable when dealing with all constituents.

  3. Commit to a “higher purpose” that everyone can relate too. Find a social or environmental issue where you, your team, and your customers can make an impact as part of your business. Keys to this would be something that matches your values, and could benefit from your strengths. Make sure your team and your customers have a role.

  4. Set high but rational team expectations, and follow through. People respond best when they know what needs to be done, and feel challenged, but not broken, by delivery expectations. Follow-through means paying attention to who is contributing, and fixing problems in a timely fashion when expectations are not being met.

  5. Build real relationships with employees and customers. For employees, showing empathy and respect for their ideas and challenges is key. For customers that you encounter, it means listening to their needs, and being supportive of special needs and situations, exceeding their expectations, and showing appreciation for their business.

  6. Empower teams to build their own work processes. Key to any trust culture is a feeling of control of your own destiny. That means providing the tools and resources to do the job, without defining and micro-managing the exact process. Your role is to provide mentoring and support as required. It also means listening and following-up on feedback.

  7. Recognize and reward individual key contributions. The most effective individual recognition is timely positive feedback from you to them, in front of their peers, for going beyond the call and excellence. Annual bonuses tied to production metrics are nice, but these will not generate the long-term trust and loyalty you need to set the culture.

  8. Provide training and mentoring directed at career growth. Employees need to see career growth and investment in the people around them, and feel all have access to the training and guidance to get the same opportunities. Everyone prefers informal feedback on their own performance daily, rather than be dependent only on a formal annual review.

  9. Focus on the whole employee and customer experience. With employees, the whole experience might include providing access to food and relaxation at work, or the opportunity to work from home. For customers, the buying experience goes well beyond support after the sale, to include product selection, web site layout, and feedback.

  10. Enable employee or customer shared ownership. Several reliable reports indicate that, on average, employee-owned firms perform substantially better, and have a stronger trust culture. The same is true of consumer co-operatives, owned by customers and managed democratically with trust, aimed at fulfilling the needs of their members.

With these initiatives, you too can build a culture of trust with your employees, and with your customers. But be aware - trust is like the stock market. It’s hard work to get it to go up, and it can come down overnight if you make one wrong step. Thus, I recommend that you seek to get it right the first time and keep it there. Very few businesses get a second chance to be trusted.

Marty Zwilling

*** First published on CayenneConsulting on 12/27/2018 ***

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Monday, January 7, 2019

Baby Boomers May Be Your Biggest Startup Competitors

baby-boomers-havenContrary to what you might guess, the highest rate of entrepreneurial growth over the last few years is not Gen-Y upstarts, but Boomers over the age of 50, now called encore entrepreneurs. In fact, according to the latest Index of Startup Activity by the Kauffman Foundation and recent press reports, these Baby Boomers are actually driving a new entrepreneurship boom.

Some people are calling entrepreneurship the ‘new mid-life crisis’ for the 77 million-strong demographic once thought to be over the hill. Partially due to the economy, but also due to longer, healthier lives and changes in job tenure, Boomers are now expected to stay in the labor force longer, and according to a USNews article, will likely dominate the labor market by 2024.

Here are some indicative entrepreneurial facts from recent Kauffman studies and others. These could convince you that the correct icon for an entrepreneur may now have gray hair, rather than the warm glow of youth:

  • The percent of entrepreneurs who are Baby Boomer starting a business since 1996 has grown from 14.3 percent to 24.3 percent last year.
  • In every one of the last 15 years, Boomers between the ages of 55 and 64 have had a higher rate of entrepreneurial growth than Gen-Y, aged 20–34.
  • These trends seem likely to persist. In the Kauffman Foundation Survey of nearly 5,000 companies that began in 2004, nearly two-thirds of the founders are now between the ages of 35 and 54.
  • Additionally, Kauffman research has revealed that the average age of the founders of technology companies in the United States is a surprisingly high 39 - with twice as many over age 50 as under age 25.
  • While people under 30 have historically jumped from job to job, another striking development has been a deep drop in the incidence of ‘lifetime’ jobs among men over age 50.
  • With longer life expectancies and greater health in later life, older generations are moving to start new firms -- and mentor young entrepreneurs. One new incentive is the falling transaction costs and barriers to entry for entrepreneurs of every age.
  • 65 percent of online users aged 50-64 use social media now, and the growth rate continues to increase. Social networking penetration by Boomers has now caught up with the other age groups, reaching about 80% across the board.
  • The immigrant rate of entrepreneurial activity seems to be declining each year (now about .5%), but still remains higher than the native-born rate. Business-startup rates in America increased the most in the Midwest and South.

In addition, the Boomer demographic is also creating a slew of new market opportunities, including improved healthcare facilities, construction of senior-friendly facilities, and technical support for seniors, by seniors. What all of this means is that boomers will have more impact and power in the marketplace for a lot longer than most people expected.

Since entrepreneurship is a key driver of economic growth, this should bode well for America, and for world economic growth as well. In terms of job creation, innovation, and productivity, entrepreneurs drive growth. Many Boomers have the purchasing power and become enthusiastic early adopters who help lead the way. They are becoming the new early adopters.

Of course no one has any idea what the next big thing will be, but more often than not innovation comes from entrepreneurs. If you are one of the Baby Boomers who wants to redefine retirement, now is your chance for real impact. Find an opportunity you understand, follow your passion, and join the entrepreneurial majority.

Marty Zwilling

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Sunday, January 6, 2019

5 Startup Intangibles That Can Energize Your Business

relevancy-in-businessSome investors seem to focus wholly on the strengths of the management team, or a sustainable competitive advantage, and in reality these are the core attributes for every funding equation. While these may be necessary for funding, they may not be sufficient to make your startup the great success embodied in your vision.

In the last few years, perhaps in reaction to the business integrity issues leading to the recession way back in 2008, I am seeing a renewed focus on other less tangible attributes which can set your startup apart. Examples include the Conscious Capitalism® movement, founded by John Mackey of Whole Foods, the B Team, founded by serial entrepreneur Sir Richard Branson, and the Benefit Corporation (B Corp) form of business now available in 33 states.

I have always struggled to communicate the multiple other relevant priorities, and the other intangibles required for a great execution. I found many of these in the classic book “Great From The Start: How Conscious Corporations Attract Success ,” by John B. Montgomery, which does a great job of laying out specifics.

It also starts with a good summary of the intangibles, summarized as the five rules of relevancy, by Mark Zawacki:

  1. A startup needs to be relevant and stay relevant. Relevancy for an early-stage company is the discovery and understanding of the real addressable market for a product or service. This is not the total opportunity out there, and not the total target market, but the subset of customers who have and will spend the money you need to cure their pain.

  2. A startup needs to find a voice relevant to its ecosystem. These days, you have to foster a community of support for your business. That means educating targeted supporters is key, even before you start to sell. Selling too early triggers customer defenses and drives them away. Everyone hates being sold to; we all prefer to buy.

  3. A startup must gain balanced traction. This is not just sales traction, but a proper balance between resources, product, and customers. It means building a viable and desirable product before selling, assembling the right team with funding, and recruiting and educating enthusiastic customers who will be your best advocates.

  4. A startup must form partnerships and alliances within its ecosystem. Today’s ultracompetitive global environment demands that you make alliances early. Startups often pay lip service to strategic partnerships, but they schedule these efforts far down the road. The right partnership strategy can make a company relevant.

  5. A startup must maintain a relevant laser focus. Too many early-stage companies are so desperate for customers that they operate in a frantic and random sales mode. They sell into multiple verticals, or pursue multiple revenue streams, such that they can’t develop a repeatable, scalable sales process, and don’t do anything well.

Of course, relevancy doesn’t work if you don’t have a winning business model. In the traditional business environment, this means the priority is an adequate return for your stakeholders, but today it also means your company should provide a material positive impact on society and the environment.

Great companies recognize that there are now multiple interdependent stakeholders, including customers, business partners, and social groups, who need to be part of your equation since they can drive or limit your success, in addition to management and stockholders.

In other words, your startup needs to be a “conscious” entity, constantly aware of the complex eco-system around it, and the factors driving change and evolution. This requires conscious leaders who are passionately committed to personal and professional growth, as well as the greater good of society. These leaders then cultivate the consciousness of their team members.

In reality, your people are the consciousness and relevance of your startup, and your customers judge your startup as they would judge a person. No relevant company can afford to focus on short-term wins over the long-term effects of its behavior on other stakeholders. How much time and how many measures has your startup applied regularly to the relevance issues above?

Marty Zwilling

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Saturday, January 5, 2019

7 Success Principles To Drive Your Next New Venture

Mark_Cuban,_Vivian_Schiller,_Bob_GarfieldMany aspiring entrepreneurs are looking to the Internet as an opportunity to get rich quick, instead of a place where you can start a business you love, for very little capital and minimal technical expertise. The reality is that if you build a business you love, you may in fact make big money, but if you start a business to get rich, you will probably fail.

In my experience, there are good reasons for starting a business, and good ways to go about it in the new online world, but even entrepreneurs with good intentions often don’t have a clue on key principles to follow for this rapidly changing platform.

The best place to learn is by scouting around the Internet today. See what other people are offering, and think about a niche where you could be unique, and have some fun at the same time. There are also many other good sources of guidance, including the classic book “Click Millionaires” by Scott Fox.

He addresses the dream of many to be a dot.com billionaire, but emphasizes the need to start with an assessment of your own goals and interests. Starting an Internet business is a new lifestyle, so you need to understand the implications. On the business side, I am adapting here his seven success principles, too often overlooked by people who leap before they look:

  1. Find a niche to help real people. Look for real problems to solve, like losing weight, staying healthy, or gaps in a popular product line. “Nice to have” sites like Facebook and Twitter look attractive, but they are much higher risk, and a thousand fail for every one that succeeds.

  2. Position yourself as an expert. People tend to buy from people they perceive as “experts.” Expert status is no longer a formal degree or certification. Today it more often means a “trusted friend” who seems real, visible, and doesn’t “push” products. Don’t hide behind a website with no address, picture, or direct contact information.

  3. Automate to the max. Take advantage of software tools to automate routine business functions, like taking and delivering orders. Provide website forums to help customers solve their own problems. Use free e-commerce software and services like PayPal before building an expensive customized solution. Generate revenue around the clock.

  4. Use the Internet to outsource staff. Hiring virtual assistants for each specific project can be a lot more efficient and cheaper than hiring and managing employees. Start with sites like Elance.com and Guru.com for specialized tasks you can’t do yourself. Pay others to handle small stuff, and keep your time available for bigger priorities.

  5. Let your audience help with content creation. Audience contributions, like product reviews, discussion board conversations, and comments on your blog are invaluable because they create more credible content and attract more money from advertisers. Even more valuable are success case studies and testimonials.

  6. Define a business that is scalable. First, pick an opportunity that has a worldwide appeal, like eco-friendly products. Then implement automation on production and tracking so you don’t need hours of manual work on each order. Finally, use customer feedback or promotions to attract more and more customers with less and less effort.

  7. Focus on recurring revenues. A great way to make more money more easily online is to replace one-time sales with automatically renewing subscriptions. With a stable base of subscribers, this can mean a continuing revenue stream from newsletters, support, or advice on demand.

Even with all this, don’t expect it to be easy. Unreasonable expectations lead to frustration and giving up too soon. Remember, being an entrepreneur is a lifestyle, one that requires constant learning and problem solving, and that’s half the fun. The other half is doing what you love to do, and possibly even making lots of money.

There are more and more Internet billionaires out there every day. Most are not as visible and well-known as Mark Cuban, but their money spends the same way. Can you be the next one?

Marty Zwilling

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