Wednesday, February 27, 2019

8 Strategies For Winning As A Freelancer Or Employee

freelance-employee-winA big trend in business these days is hiring freelancers or contract personnel for the duration of a project, rather than permanent staff. According to a recent poll, contractors and freelancers could make up half of the American workforce within a decade. Yet I find that few of today’s workers realize that succeeding as a freelancer requires a whole new focus on “marketing” yourself.

In essence, as a contractor, you are a consultant who is competing regularly for new work, and you constantly have to differentiate your offering from other candidates, including price. In addition, like an entrepreneur with a new business, you have to factor in all the indirect costs previously covered by employers, including training, health care, and time off for vacations.

In fact, thinking like an entrepreneur is a good strategy today for success, even if you are currently in a long-term employment situation. As you know, things can change quickly, as businesses try to survive and adapt to an evolving market, so it’s better to be prepared than caught off guard. Here are some key strategies that I recommend to every worker today:

  1. Develop and highlight your competitive differentiation. Every entrepreneur and every startup needs to have a clear “elevator pitch,” which identifies a unique strength and value they bring to the table. Internally in a career, you need to do the same thing to solidify your position among peers, and prepare for either promotion or freelancing.

  2. Drive your role and direction, rather than let the job drive you. You can’t win doing something you don’t like to do, or don’t know how to do, so focus on your passion and strengths today, and make that come alive in the delivery of everything you do. Pick your niche, and continually invest in improving your expertise and keeping up with trends.

  3. Build relationships to attract future business or roles. Too many employees count on their managers to get them promotions, or count on a resume to get the next job. Today, customers and future managers put a higher value on relationships, and expect to know you from industry conferences, social media, or recommendations from peers.

  4. Market yourself both inside and outside your current job. Use blogging, outside publication, and speaking or mentoring opportunities to establish credibility and stand out above peers. The days of being somehow found as a hardworking introvert in the back room are gone. It’s time to learn how to do marketing, and apply it to yourself.

  5. Start today thinking at least one job ahead. As a business, you should always be looking for your next customer, as well as satisfying your current one. That means regularly scanning LinkedIn and job sites for roles and opportunities that you may quality for, and honing your skills and connections to be sure you are competitive.

  6. Be an advocate for change in your current role. Keeping a low profile, or fighting change, will not serve you well as a freelancer or an employee. Focus on the ultimate customer, and find a way to improve satisfaction, grow revenue, or cut costs. If you find yourself playing it safe, or not willing to take a risk, it’s time to think again.

  7. Walk away from a bad role or customer. You can’t please everyone all the time, so don’t kill yourself trying to satisfy a bad boss or an overly demanding customer. Real entrepreneurs are quick to make the tough decisions, with proper respect, to minimize frustration, resource drain, and reputation loss. Develop the courage to move on.

  8. Write down some target objectives and milestones. Every employee and certainly every freelancer needs to have a clear set of objectives as a “business plan,” just like every startup. If these aren’t written down, reviewed regularly, and measured, then your career sounds more like a hobby than a serious commitment.

With these strategies, I believe you will be well prepared for the new age of freelancers and contractors, and you will be a more successful employee in your current job. I have found that the delivery of my special expertise in professional services is one of the most satisfying and fulfilling roles I have ever experienced.

It’s great fun to build relationships with clients, see directly your impact on the world, and get paid for your real value. That’s the definition of success in any business or career.

Marty Zwilling

*** First published on Inc.com on 02/12/2019 ***

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Monday, February 25, 2019

If Your Passion Is Saving The Environment, Start Here

saving-the-environmentAlthough I hear more and more about “global warming,” and the many ways we are destroying our environment, I still don’t see many global business winners in this space, comparable to Facebook and Amazon. Al Gore, by just talking about it, still seems to be leading the way in monetization, having amassed an estimated net worth reported recently as around $300 million.

The ideas are endless, but we need more smart entrepreneurs to implement them. There are plenty of smaller success examples, including Impossible Foods, Inc., Choose Energy, and others highlighted in this recent Investopedia article. I still see a big opportunity to capitalize on sustainability, attract investors, be the next unicorn, and leave a legacy you can be proud of.

Based on my experience with founders in the “cleantech” and “green” space, I sense that many others are interested, but may be missing the best targets. Thus I offer some practical strategies if you are looking for direction or the best place to start:

  1. Look for opportunities to increase recycling and reuse. The EPA estimates that 75 percent of the American waste stream is recyclable, but we only recycle about 30 percent of it. The percentage is even lower in many other countries. It’s also time to make more products recyclable, by designing them as a natural loop from creation to reuse.

    Another approach is simply repurposing used items, or simply passing them down to less demanding users, like the ecoATM story with used cell phones, tablets and MP3 players. This approach is more valuable than just reusing a chip, or extracting the gold and silver.

  2. Reduce waste from new production automation. Entrepreneurs with an eye on the environment can readily spot examples of inefficient material, water, or energy usage. This starts with closed loop manufacturing systems, but extends into efficient inventory management, avoiding hazardous materials, and reducing packaging materials.

    Rework is another common form of waste, when something goes wrong, and you have to discard partial products, and do the work again. It’s a problem that can be minimized with better automation, training, and the use of machine learning on the factory floor.

  3. Find alternate components for limited natural resources. In this new technology age, smart entrepreneurs are starting to be able to deliver higher-performance components at lower cost, such as composites in lieu of aluminum or steel. Many of these provide the opportunity to save energy and weight, as well as improve the environment.

    From a different angle, solar and other alternative power generation companies, such as BrightSource Energy, have been able reduce environmental impact by capitalizing on the wealth of non-polluting natural resources, including sunlight, wind, and thermal vents.

  4. Improve current product utilization, efficiency, and sharing. Today, statistics find that big trucks are sitting idle or deadheading empty as much as 50 percent of the time. Auto utilization is even lower. Uber and Lyft have jumped into the gap, but there is still plenty of opportunity for digital tracking, sharing, and scheduling to improve the situation.

    This new sharing economy is still picking up steam, with other winners already including Airbnb (rooms), Mobike (bicycles), and Chegg (books). If you are an aspiring entrepreneur, it’s easy to see a wealth of additional opportunities in this space.

  5. Replace physical products with energy-saving digital ones. Whole products and industries have already been replaced, including film cameras by digital ones, and movie DVDs and packaging by streaming digital downloads. This not only reduces pollution, but it makes things much better in the process, and adds value to every customer.

    For example, internet digital sensors and devices, now called the Internet of Things (IoT), are already appearing to enhance common physical devices, including appliances, vehicles, and homes to help us manage the environment. The potential here is still huge.

Overall, despite all these opportunities, the environment that I’m most concerned about is the entrepreneurial one. We need change, and passionate and educated entrepreneurs are still one of the most critical “natural resources” in the world today. Thus I’m committed to helping where I can on both the idea and execution sides of the new venture equation. But it all starts with you.

Marty Zwilling

*** First published on CayenneConsulting on 02/07/2019 ***

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Sunday, February 24, 2019

Viral Marketing And Word-of-Mouth Require Investment

monopoly-money-marketingEvery time I challenge a business plan with little or no budget for marketing, I get the answer that they will be using “viral” marketing, which costs nothing. The founder explains that the product is so “buzz-worthy” that usage will spread rapidly through word-of-mouth only, meaning people loving it and recommending it to their friends.

First of all, Seth Godin pointed out a long time ago that viral marketing does not equal word-of-mouth. His view is that word-of-mouth is an unsolicited consumer action, positive or negative, which usually fades quickly, like a good or bad restaurant review.

Viral marketing is a deliberate marketing action, designed to grow attention at a compound rate, without further stimulus, by word-of-mouth. It usually implies an opportunity to win big, like a lottery, or experience something sensational, like an incredible video or free product.

At any rate, “buzz-worthy” and “viral” are marketing illusions that cost big money to create, and these are only the beginning. In a business plan these are only one of the many marketing campaigns which continue to rise in cost. Here are three key cost elements of just the viral marketing campaigns:

  1. Hire brand evangelists. Think of a brand evangelist team online as people blogging about your product, or posting links to it in every forum. Brand evangelists offline talk up your product lines at cocktail parties or recommend your services to friends while watching their kids' soccer game.

  2. Develop viral content. Someone has to design and create those entertaining or informative messages that are designed to be passed along in an exponential fashion, often electronically or by e-mail. It’s harder than it looks to exploit people’s propensity to share humorous, enjoyable or useful information - jokes, special offers, and games.

  3. Seed viral activity. People are more demanding and have more choices than ever before. This means spending more money on search marketing (SEM) to make it look like the buzz is working. It also means making the content appear omnipresent on the Web and in the marketplace, including dedicated video sites and blogs. In addition, special offers and competition prizes may be required.

As a result of the rising popularity of viral campaigns, the cost of developing one has increased significantly, and the increased ‘viral clutter’ has made it more difficult to stand out from the crowd. However, despite this, viral marketing can indeed be more cost effective than traditional marketing when done well.

Seeding is the most expensive aspect of a viral marketing campaign, with some video sites charging in excess of $10,000 to be featured on their home page for one week. Only a few years ago a humorous video or unique toy could be seeded into a couple of relevant online communities, and it would be hugely popular. However, the cost of entry has gone up as the concept of viral marketing has become pervasive.

In general a well-executed viral marketing campaign can cost anywhere from $100K to many millions. There is a reason that sites like Priceline.com Europe and Facebook, which everyone believes were made popular by viral marketing, have spent at least $50 million each becoming a household name.

Some startups not only ignore this and don’t budget for it, but they actually plan on the free viral marketing to generate enough revenue from click-through advertising to fund operations and future growth. That’s a double death wish.

We have all heard of a few cases where viral marketing resulted in a message “spread through the Internet like a cold in a kindergarten,” but counting on this can just as quickly lead to the death of your startup. Unless you have very deep pockets, plan for some very significant marketing costs to kick-start your dream.

Marty Zwilling

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Saturday, February 23, 2019

6 Misconceptions Plague True Social Entrepreneurship

social-entrepreneurship-communityAn entrepreneur lifestyle that continues to gain in popularity these days is being a “social entrepreneur.” In the simplest of terms, these are people who seek to generate “social value”, rather than profits, and use traditional business principles to provide solutions to social issues

On the surface, this sounds like entrepreneurs who want to build a non-profit organization. Yet the term seems to be more often associated with people who intend to make a profit, but whose work is targeted toward long-term socio-economic change. Think Bill Gates, with his current investments, or Blake Mycoskie with Toms Shoes, as opposed to the leaders of the American Cancer Society or Goodwill Industries.

Whether the objective is to generate profits or social capital, the common element for all entrepreneurs is the recognition that there is a problem which needs solving, or there is an opportunity to improve the status quo.

The vision is always to be a change agent, to invent and popularize new approaches, and to persuade people to take a leap forward. In every case this requires a committed ultimate realist with the determination to persist in the face of daunting odds.

Another way to distinguish between the two types of entrepreneurship is by identifying what social entrepreneurship is not:

  1. Not a fundraising strategy for nonprofits. A social enterprise may actually be profitable, or it may be non-profitable, but the generation of funds is deemed secondary to success on the environmental or social issues in the vision. Generating funds should not be the highest priority.

  2. Not about profit before social impact. A social enterprise must be financially sustainable only as a means to the end, which is its social or environmental impact and rate of change. The business entrepreneur mission is profit always, social impact maybe.

  3. Not a new definition for the nonprofit sector. The evident and real purpose of the social enterprise must be to make the world a better place, through the operation of the business. This certainly also has potential for enhancing the vitality of the nonprofit sector, but it doesn’t move it to a higher moral plane.

  4. Not an investment opportunity for business investors. I still get inquiries about how to find angel investors and venture capitalist to kick-start a social enterprise. Funding such an enterprise is more likely philanthropists, government grants, or bootstrapping. Business investors are looking for a high financial return, not social capital.

  5. Not about entrepreneurship in the government sector. So far, the largest source of services and funding for social enterprises and social entrepreneurs has been federal, state, and local governments. Yet the enterprises are not government enterprises, and the process for success makes them good business enterprises.

  6. Social entrepreneurship is not socialism. The socialist doctrine dictates compulsory taxpayer contributions to finance social initiatives, while the social entrepreneur uses the standard business model and innovative approaches to attract customers, fund activities, and accomplish social change.

In all types of entrepreneurship, an entrepreneur rather than an administrator is required. This is someone who is willing and able to create a new enterprise, based on an innovative idea, and is willing to assume total accountability for the inherent risks and outcome.

So, if you are an entrepreneur at heart, but you are driven by a higher cause than making a profit, social entrepreneurship may be for you. It is an emerging field with diverse and shifting interpretations, but most agree it’s really about making the world a better place. There is certainly plenty of opportunity in that space.

Marty Zwilling

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Friday, February 22, 2019

7 Job Qualifications For Intrapreneurs In Any Company

Intrapreneurship-qualificationsEvery mature company I know is looking for more innovation from within. They are painfully aware that tenure on the list of S&P companies is shrinking – from thirty-three years back in 1964, down to twenty-four in 2016, and predicted to be just twelve by 2027. They need inside intrapreneurs who think and act like the outside entrepreneurs who are disrupting their business.

I have seen this happening firsthand from my years of experience in several big-name companies, including IBM and Fujitsu. In my view, success starts with nurturing and bringing in the right people to make it happen, or being one of the right people from within if you want your career to blossom.

I just completed a new book on this challenge, “Disrupt-It-Yourself,” by Simone Bhan Ahuja, which includes a great summary of the required attributes to maximize your success potential in this area. I don’t believe that any of these requires a birthright, and all can be adopted or learned by anyone, so I encourage you to take a hard look at your own interests and key team members:

  1. Action trumps ideas and more analysis every time. Real change comes from people who are obsessed with action, not ideas. Thinking and analysis without execution feels like zero cost to existing organizations, but it actually ignores the opportunity cost lost. If you act, you learn from other people, especially customers, and you build momentum.

  2. Focused on progress rather than process. Most entrepreneurs realize that for early stage startups, process is the enemy of progress, slowing you down when you're trying to move forward. But more mature companies have learned that scaling a business requires process, so the focus changes. Intrapreneurs have to always think like entrepreneurs.

  3. Relishes the opportunity to learn from problems. Corporate environments tend to treat problems as failures, rather than opportunities. People are trained to avoid change, and stick with the safer status quo. True entrepreneurs, like Thomas Edison, realize that the biggest innovations come from solving problems, such as failing light bulb filaments.

  4. Loves to “hack” new outcomes from existing systems. In software, hackers love the intellectual challenge of confronting a system designed to do one thing and cleverly exploit it to achieve something different. That’s the essence of innovation, and good intrapreneurs need to find new opportunities by bending existing strengths in new ways.

  5. Reach out across the aisle for complementary talent. Smart intrapreneurs know they can’t do it alone, and know how to enlist the help they need by making it clear “what’s in it” for others. They enjoy engaging in informal partnering and co-design solutions with other stakeholders, while making the total opportunity as much possible about others.

  6. Married to a mission, but not just to one way to do it. The people you desire know the “what” and the “why,” but don’t want to be told “how.” They are always looking for gaps and misalignments, and thrive on changes, even radical changes, so the organization performs better. In this context, strategy deviations can keep the company on track.

  7. Frugal by nature, and don’t ask for much to proceed. Even though they see huge budgets all around, they prefer to start on the cheap (like an entrepreneur), reusing existing resources, working on the side, and employing messy, make-do methods over expensive sanctioned systems that have long approval cycles and much oversight.

Because fostering entrepreneurship internally is hard, many companies have now shifted their innovation focus to acquisitions and partnerships. All have found that this approach can be equally difficult, due to the integration of multiple corporate cultures, processes, supplier dependencies, and management styles.

Thus, I continue to assert that effectively harnessing and building of internal talent to drive innovation from within will continue to be one of the single most important factors for your company’s long-term success. It starts with a mindset that disrupting your business regularly is necessary, before your competition and new startups do it to you. Start your tenure from today.

Marty Zwilling

*** First published on Inc.com on 02-07-2019 ***

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Wednesday, February 20, 2019

10 Ways To Highlight The Credibility Of Your Website

website-trustSmart people only visit and buy from credible and memorable websites. In the past, if your startup had a website presence, the company was credible by definition. In today’s world, a website is necessary but not sufficient for credibility. Dreamers and gamblers have found out that if the website isn’t validated as credible, it’s probably a scam, and everyone loses.

Yet most startups I know experience the same shock of disappointment when they first open up their website to offer their “million dollar idea” product, and nobody comes. What validates credibility and makes your site memorable in the minds of consumers, and how much does it cost?

  1. Put yourself on the site. People buy from people. Until the company name is a famous brand, you are the brand. No name, picture, address, or business history only convinces customers that you are hiding, located in an un-trustable country, or don’t have a clue. They will exit quickly.

  2. Show evidence of your expertise. Publish a regular blog, contribute to relevant social networks, and highlight several videos, podcasts, or eBooks of you and your technology. People respect people with relevant experience, so highlight your accomplishments, and the credentials you have.

  3. Highlight personal presence and testimonials. Third parties are always more credible sources than you are. Highlight interviews and reviews from recognized industry sources, and news sources. Include links to your profiles on LinkedIn, Facebook, and Twitter.

  4. Create a positive online image. Show your visitors some evidence of community involvement and charity efforts. Offer something that is really free – with no strings attached to cause them to lose their trust. Set up an award, and show winners.

  5. Link to recognized brands. If you can have an affiliate relationship with any recognized brand names, or any connection to publicly recognized experts, highlight these and provide links to their websites.

  6. Add a modest advertising presence. The presence of a few related advertisements can actually improve your site credibility, since most credible sites have them. Of course, too many or obnoxious advertisements are especially harmful to a site’s credibility.

  7. Join relevant business associations. Most will give you a membership graphic for your website, and an association link to give your business extra credibility. Don’t forget the local Chamber of Commerce and Better Business Bureau.

  8. Provide a privacy and security statement. Display a logo like McAfee Secure or Trust Guard, in addition to specific policy statements on these subjects, to persuade your visitors and prospects to trust you.

  9. Offer support assistance and guarantee. Publish the terms of your support, return, and replacement policies. Be consistent is their application, and provide contact information for both phone and email access. Follow-up for customer satisfaction.

  10. Professional user-friendly site design. Studies have shown that consumers gauge credibility in large part based on the appeal of the overall visual design, including layout, typography, font size, color schemes, no broken links, and correct language usage. Don’t forget basic Search Engine Optimization (SEO) so search engines improve your ranking.

These are all minimal-cost survival marketing efforts. Beyond these, you will likely need to budget time and dollars (up to $50,000 is not unusual) for real marketing efforts to enhance your visibility and credibility, which include branding, promotions, give-aways, and free services.

In summary, a startup with no website, or a website with no credibility will kill your business. Use the tips outlined above during the first three months to get in the game, and count on much more time and money if you intend to stand above the rest. Make your website not only credible, but incredible!

Marty Zwilling

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Monday, February 18, 2019

5 Indications That Your Work Culture Needs Attention

toxic-office-environmentWhether your company is a startup or a mature business, the last thing you need in the office is a toxic work culture. Yet, according to a recent study, more than half of tech employees see their current office culture as toxic. That can’t possibly be healthy for employee morale, productivity, or customer focus. The sad part is that many executives still don’t know how to recognize the signs.

I saw some excellent guidance for all of us along these lines in a new book, “Cultural Brilliance,” by Claudette Rowley, who has been helping both big and small companies recognize and fix their cultural problems for almost 20 years. In my own consulting career, I have observed examples of each of her five key signs that your business work culture is not operating in a state of brilliance:

  1. People are punished for telling the truth. In broken cultures, people are marginalized and ignored when they tell the truth, or get passed over for a well-deserved promotion, when they try to point out flaws in the current system. In a healthy work culture, telling the truth is encouraged, and new ideas are considered vital to the success of the business.

    As an executive, I found that the first step toward fixing this is actively listening to people, and not being defensive in responses. It’s fair to ask for positive suggestions and actions to fix problems, as well as more details to get to the source of the problem.

  2. Leaders ask for data and do nothing about the problem. When leaders ask for more data, and don’t respond with a credible action plan, they are communicating a lack of courage, or are unwilling to confront reality. They may be more concerned with their own power or comfort than they are with positively impacting the culture around them.

    Even healthy organizations face regular problems, so if you aren’t hearing anything, it probably means that people have given up, or are afraid to bring up issues. Maybe it’s time to leave your office door open, or follow-up and communicate more regularly.

  3. Your culture generates a high turnover rate. You may have a revolving door as people recognize the truth, burn out, and depart. If you find yourself losing your best people, then it’s certainly time to take a hard look at the culture. Healthy cultures thrive on career development and promotions, and don’t wait for people to leave due to frustration.

    If you don’t regularly invest in employees through training and mentoring, they won’t invest in you by stretching themselves, and tackling risky but critical business change challenges. They need to trust and respect you, as well as peer team members.

  4. People are jammed into open spaces or crowded offices. This may not sound like a cultural issue, but people won’t collaborate or focus well in crowded, hectic, and noisy environments. You may be saving money on facilities, but losing more in productivity and lack of commitment. Friendly and comfortable work places lead to positive cultures.

    One of the reasons that Google has consistently been ranked as one of the best company cultures is that they customize their office environments to the people and the role, to make them enjoyable and comfortable, rather than regimented and cold.

  5. Your culture tolerates unacceptable behaviors. Too many organizations tolerate anti-social or even bullying activities from a few employees, under the false notion that these people or so valuable or hard to replace that the cost is a net positive. It’s time to look at the indirect costs, including lost clients, other worker turnover, and overall productivity.

    Remember also that your employees expect the same professionalism and respect from you that you expect from them. I’ve personally been in more than one organization where the manager is more the problem than the solution. A great culture must extend all the way to the top.

Remember, you can’t fix something that you don’t recognize as broken, or don’t know how it’s supposed to work. Since change is always hard, it’s also smart to work on getting your culture right the first time as you build your startup, rather than trying to recover later after it turns toxic. A great culture can save your business, but don’t wait for success to save your culture.

Marty Zwilling

*** First published on Inc.com on 02-04-2019 ***

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Sunday, February 17, 2019

7 Strategies To Accelerate Creativity In Your Company

accelerate-creativityWithin the startup realm, there is a big difference between having an innovative product versus an innovative business. Some startups have a new technology, but stick to a tried-and-true business model. Others take an existing product, and give it new life with a creative business model. The most competitive startups do both, all the time and every time.

In today’s competitive world, with its accelerating rate of change, no competitive advantage lasts long. According to Josh Linkner, in his classic book “Disciplined Dreaming,” we have entered the Age of Creativity, in which each incremental gain is zeroed out as global competitors quickly copy and adapt. The only sustainable competitive advantage is creativity.

He makes the case, and I agree, that creativity in a company, large or small, doesn’t just happen – it requires a culture. If you want to build and maintain a creative culture in your organization, you need to make sure your operation is guided by these seven critical strategies:

  1. Fuel passion. Every great invention, every medical breakthrough, every advance of humankind began with passion: a passion for change and for making a difference. With a team full of passion, you can accomplish just about anything. To promote passion, you need to develop a sense of purpose, promote collaboration, and have fun.

  2. Celebrate ideas. Many businesses give lip service to their celebration of innovation, but punish, rather than reward, risk-taking and creativity. In a creative culture, rewards come in many forms: money, yes, but great businesses also celebrate creativity through praise (both public and private), career opportunities, and perks.

  3. Foster autonomy. People and teams that can call their own shots are better able to produce valuable creative output, since requiring approval at every step kills the creative process. Granting of autonomy first requires extending trust. The key is to provide a clear message of what you are looking for, and then get out of the way.

  4. Encourage courage. Netflix, which is known for its creative culture, tells employees to “Say what you think, even if it is controversial. Make tough decisions without excessive agonizing. Take smart risks. Question actions inconsistent with our values.” Encourage team members to take creative risks without fear.

  5. Fail forward. Rather than characterizing something that doesn’t work immediately as a “failure,” position it as an experiment. These experiments can be called “failing forward,” because each one leads you one step closer to the perfect solution. The key is to fail quickly. Flush out ideas and let go of the ones that fail.

  6. Think small. When you want to foster big ideas, it’s important to have a strong sense of urgency, be nimble, and not afraid to embrace change. It’s easier to accomplish this in a small team, in a small local environment, before you try to extend it a much larger infrastructure. You will see results sooner, and be more able to overcome opposition.

  7. Maximize diversity. A diversity of thought and perspective fuels creativity and builds creative cultures. To connect with customers, for example, you need to understand the world from their perspective, not yours – this is one area where a diverse culture can make a huge difference.

Fostering creativity doesn’t mean that you don’t need a business plan, or must forgo all discipline in running your business. A successful business is still all about execution, so you still need clear milestones, checkpoints, and metrics to keep you on track.

Creativity is the ultimate competitive advantage. Not just one innovation, but a culture that assures that you are never standing still on the technology or the business model. Make it the priority we are all looking for. No investor wants to bet on a “one-trick pony.”

Marty Zwilling

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Saturday, February 16, 2019

10 Clues That A New Business May Not Be Your Passion

Stressed-businessmanPeople who get stressed managing their own lives don’t make good entrepreneurs. Small businesses require multi-tasking, work prioritization, and decision-making, with no assistants or help from specialists. That’s why Fortune 500 executives usually don’t survive as startup CEOs.

First you have to learn to accept total responsibility for things that happen to your business, just like you are responsible for everything in your personal life. Maybe you are comfortable with having a spouse in control of your personal life, but couples running a business are high risk.

If you recognize yourself in these clues below, you probably won’t have as much fun running a startup as Sir Richard Branson always seems to be having. You don’t even have to try the entrepreneur lifestyle to know if these points are likely to be a problem for you:

  1. You often feel overwhelmed and out of control. There is always more to do than time to do it. Usually the stress people feel does not really come from having too much to do, but from having to make decisions on what to do first, and not setting reasonable targets.

  2. Starting many things, but completing few. Productivity is all about the ability to complete tasks. It requires tradeoffs and decisions, to declare that something is finished. Get in the habit of finishing what you start. Perfectionists need not apply.

  3. You like to defer big things until later. If you catch yourself deferring important tasks, in favor of smaller easy things, that’s a management problem. Adopt a “do it now” motto, and tackle your to-do list in priority order, rather than crisis order.

  4. Over-thinking and second-guessing yourself. If you spend more time thinking and worrying about a task, than doing the task, then you are not managing yourself. Don’t waste your precious creative energy. Finish items, and get them off your mind.

  5. You get defensive at the slightest criticism. Some people feel pain and high stress with any negative feedback or suggestions for improvement. They react quickly and emotionally with rationalizations and justifications for their actions, and find active listening very difficult. You need a thick skin to be an entrepreneur.

  6. Avoiding new opportunities due to fear of failure. Real entrepreneurs look at every new opportunity as an exciting and new-life experience. They are energized by the risk, and learn from every failure.

  7. Always counting your weaknesses. Good business leaders never criticize themselves for their weaknesses. Smart ones recognize their undeveloped skills and higher potential, but they are confident that they can change, and constantly work at it.

  8. Lack of confidence and enthusiasm. If you have a “downer” day at least once a week, and can’t remember the last time you were truly enthusiastic about something in your life or work, you are not ready to manage a business. Self-confidence is key to success.

  9. You like to work alone. Every business and every relationship is a team effort. Loners hide from others because they don’t want anyone to see that they are not in control. Make an effort to network with others to stay informed and contribute, but not dominate.

  10. Admit to being a control freak. Believe it or not, many people who don’t manage themselves very well are control freaks, when it comes to their business and other people. Practice the art of delegating and the joy of being spontaneous.

Managing yourself effectively is the best preparation for managing a new business. It means you understand yourself, and are likely able to read other people and understand them, leading to a trusting relationship with your team and your customers.

More importantly, managing yourself gives you a deeper understanding of what you value and how you define success. It means that you can make the hard choices about your real goals in business, and help you reach those goals. Above all, you will be able to truly enjoy your successes.

Marty Zwilling

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Friday, February 15, 2019

Businesses Without A Website Are The “Walking Dead”

Halloween-walking-deadThese days, if your startup does not have an Internet home base up and running, you are not ready for business or potential investors. Customers go there to check on the details of your offerings and verify that you are not a scam, investors look there to check out your management and sales approach, and suppliers expect to find contact information.

There should be no doubt that an Internet presence is as basic to success in business today, as brick and mortar was a hundred years ago. Yet I am amazed to see from recent data that nearly 36 percent of small businesses today still have no web presence at all. These are soon to be the walking dead, and the competitors you can beat today.

In fact, you need to have at least a prototype web site published several weeks before you expect anyone to find yours, since it takes that amount of time for the web search engine “spiders” to find you and index your content. I still remember my disappointment the first time I published my website, did an immediate Google search on the name, and it said my company didn’t exist.

There are many practical reasons for going to work early on your web site. Here are a few:

  1. Register domain name and set up hosting. I’ve said many times that the Internet domain name should be reserved at the same time you incorporate your company name – they need to be the same, or highly related. Yet I still hear stories of companies being well down the road on products and collateral with a given name, only to find out that everything has to be changed because of a domain name conflict or availability problem.

  2. Websites do take time to get done right. I’ve also known startups who have worked for months on the infrastructure of their business – front office, manufacturing, product design, marketing, personnel, and sales – then started work on a web site in parallel with their “grand opening.” Two months later they still didn’t have a web site, and didn’t have a customer. You should allow three months for the design, building, and rollout of your first site, and you can actually build it yourself these days.

  3. Finalizing the web site validates your product plan and sales strategy. Many founders find that building the web site forced them to commit on the product design, set final pricing, define ordering and delivery procedures, and actually schedule and staff the marketing events that they had in mind.

  4. Viral marketing needs a website. Everyone knows that word-of-mouth advertising is an effective and important part of any small business. But word-of-mouth and viral marketing doesn’t work without a web site. On the other hand, don’t assume that viral marketing is the only marketing you will need.

  5. The website can be a source of revenue. If your business and product are as attractive as you believe, the traffic to your web site will build quickly. Now you should monetize that aspect of your business through the use of Google AdSense to display ads for related products and businesses, and get paid for the “click-throughs.”

  6. Your web site will promote your business 24 hours a day, 7 days a week. Like you probably do, many people search for products and services on the weekends and in the evening. They are busy business people and very often this is the best time for them to concentrate on researching a new product or service. As a business owner, there is nothing more satisfying than having several orders and email inquiries waiting for you when you get up in the morning!

In fact, you can set up a web presence these days on social media alone, by creating a company page on Facebook, company profile on LinkedIn, or a free blog with static pages on WordPress. These may not have the globally recognized www.companyname.com domain name, but will certainly put you in touch with the new Internet generation.

I’ve heard all the excuses for not stepping up to this requirement - like I don’t have the time, skills, or money. But believe me, the costs these days are trivial, compared to the benefits. For the first time you have at your disposal the whole world market for whatever product or service you happen to provide. It’s time to turn the light on, and let the world know you exist.

Marty Zwilling

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Wednesday, February 13, 2019

Do You Know A “Downer” Who Is Killing Your Business?

stress-downer-depressionA “downer” is defined here as someone who seems to dwell on the negatives of every business challenge, and loves to highlight bad news or potential problems. No matter how smart or experienced this person may otherwise be, things must change or they will kill your startup.

I’m not talking about someone who has an occasional bad day, but rather people who when asked, “How are things?” will proceed to give you a 20-minute dissertation on their latest health symptoms, the latest company problem, and the sad state of the world in general.

This brings down the mood of everyone around them, and often leads to a self-fulfilling prophecy. We all know this kind of person, but they never seem to recognize themselves. So here are a few clues that you can look for in yourself, to see if you slipping into this abyss:

  • “It’s just another long day at work.” You can’t remember the last time you were positively excited by something you did at work, or even in your personal life. Your brain has leveled all events and activities into a desert of sand dunes, where just getting from one to another is a struggle, and there is nothing new to see over the next hill.
  • “I’m always tired or stressed out.” You may know this, but you assume that it’s not obvious to anyone else. Yet, think of your own office, you noticed on the first day those people that speak slowly in a low monotone, walk or sit with their head down most of the time, and rarely contribute anything without being asked.
  • “If it’s not broken, don’t fix it.” This can happen to business executives, once able leaders, who have spent too many years doing the same job. They know their processes and team aren’t perfect, but they no longer notice these imperfections. They are bored, or no longer interested in improvement opportunities.

If you recognize yourself in these points, or you feel yourself slipping in that direction, what can you do to turn yourself around before the company pushes you out, or a competitor pushes your company out? Here are a few suggestions:

  • Get a medical checkup. You may be fighting a health problem that can be easily solved by proper treatment or medication. Even more severe medical problems, like chronic depression, can be mitigated once they are recognized and understood.
  • Change your environment. Ask for a new assignment at work, or look for a new job before you are fired from this one. Make a concerted effort to wake yourself up to the positives, and re-engage in processes that once excited you. Start a log on your efforts and progress. Measurable progress is itself exciting.
  • Ask a mentor for support. Choose a friend or mentor (not your spouse) whom you trust to tell you the truth, and ask for help. Then listen to the recommendations. These people can’t change you, but you can change yourself. Focus on identifying strengths, and capitalizing on them.

Let me assure you, every startup faces more challenges than any other business – unproven product, new processes, new management, and unpredictable customers. This is not the place for downers. If you are a downer, find a new place to work. If you run the startup, and you don’t deal with this issue quickly, your fledgling business is in jeopardy.

As I’m writing this, I’m thinking that these points are so obvious that they don’t need to be reiterated here. Yet I still find this to be one of the most common drags on startup productivity, as well as employee satisfaction. Remember that being a downer is not something that someone did to you; it’s something that you did to yourself. Therefore, it’s up to you to fix it.

Marty Zwilling

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Monday, February 11, 2019

7 Action Items Build A Sustainable Innovation Culture

culture-of-innovationEvery business founder knows the need for a culture that promotes continuous innovation, an entrepreneurial spirit, and one that creates sustainable value across all functions in the business. Yet most don’t really know how to create that environment, or assess when they have achieved it. They only know in retrospect too late when they don’t have it, and the business is in crisis mode.

This topic was well addressed in the classic book, “The Invisible Advantage: How to Create a Culture of Innovation,” by Soren Kaplan, who lays out the key steps to assess, disrupt, and reshape the existing culture of a company to get more innovation. Kaplan is a leading expert in building innovation cultures, and speaks from his real-world experience with many companies, as well as academic study.

In my own work as an advisor to many entrepreneurs and startups, I see many who are focused on that single big disruptive innovation that will change the world. It’s a good start, but that’s not the continuous flow of smaller innovations required to survive, thrive, and win in today’s rapidly changing world. Thus I recommend Kaplan’s steps, which I will paraphrase here:

  1. Make your innovation marching orders clear. Frame the way you want to change the world, and make it about the customer. Start with defining and publishing innovation goals at the company level, and then ask for specific objectives from every organization. Ask teams for a breakdown into incremental, sustaining, and disruptive innovations.

  2. Take time to create a structure for innovation. If you don’t take time early to set the culture, you will get a crisis when you need innovation. It can start by setting aside twenty minutes in a weekly meeting to explore new ideas for making things better, and then following through. Carve out unstructured time for team members to focus on ideas.

  3. Decide what to measure and create metrics. You only get what you measure. Ideas are the beginning. Make sure your measurements are customer-oriented, as well as focused on internal processes. What you measure must reinforce your goals, values, and best practices around innovation. Promote very specific actions and behaviors.

  4. Reward with recognition over financial incentives. An annual bonus or award is just not enough to catalyze a culture of innovation. Frequent and informal recognition with peers is the most powerful incentive to innovate and change the culture. Symbols that reinforce your desired intent can make innovation a reality that becomes everyone’s job.

  5. Practice leadership actions that shape the culture. Little things can have a big impact when it comes to creating a culture of innovation. Avoid comments like “We can’t do anything until we have more data,” or “We tried that before and it failed.” Watch the unintended facial expressions, practices that get rewarded, and how failures are handled.

  6. Assess your innovation culture regularly. In a large organization, online surveys and questionnaires are helpful. It’s always valuable and symbolic to take the time to speak with real live people, both informally and in executive interviews. Count the innovation success stories published internally, or visibly rewarded in each organization.

  7. Design your invisible competitive advantage. Your culture of innovation should be largely invisible to competitors, but it better be clear to all your teams. Every company has different strengths and goals, yet each can publish internally their innovation canvas of technology, leadership, people, structure, rewards, and metrics that sets them apart.

The most important step is simply to get started. You can use the toolkit provided by Kaplan, or assemble your leadership team and make sure they understand that a culture of innovation is a strategic imperative. Then create an action plan to implement the required steps, follow-up on assessment, and iterate on a regular basis to sustain that invisible advantage.

Remember that every specific competitive advantage is temporary – every product or service becomes a commodity over time. The only sustainable advantage is a culture that results in continuous reinvention, providing ongoing memorable customer experiences. What has your business done lately to excite your existing customers and keep them loyal?

Marty Zwilling

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Sunday, February 10, 2019

Do’s and Don’ts For Entrepreneur Business Networking

know-the-rulesI often recommend business networking as the most effective way for a startup founder to find investors, advisors, and even key executive candidates. But what if you are an introvert, or new to this game, and don’t know where or how to start?

The answer is still the same, but I have learned over the years that there is an etiquette to this process, just like there is for social networking. Here are a few of the “do’s”:

  • Post your profile on LinkedIn and Twitter, and join in startup discussions. There are other social networks in the list of 200 “major sites” recognized by Wikipedia that entrepreneurs use for networking, depending on where you are in the world, like Orkut, Viadeo, and Sina Weibo, but talking to friends on Facebook probably won’t help you.
  • Join and actively participate in local business organizations. Business groups like TiE-The Indus Entrepreneurs and EO-Entrepreneurs Organization are places to meet people you can help, as well as people who can help you. Remember it helps to give a little to get something back. Another place to start is the local Chamber of Commerce.
  • Get introductions from existing business contacts. Start with the people you know, who know your work, and would recommend you to others. It isn't always the first introduction, but the friend of a friend that may be the one that pays dividends.
  • Volunteer to help out with entrepreneur activities at your local university. All universities love and need to get help from people in the “real world” for coaching and judging activities in their Entrepreneurship and MBA programs. In return, you will meet or be connected to many people who can help you.
  • Attend an investment conference. These events are swarming with potential investors, and this is the forum where they are actively soliciting new opportunities, so don’t be shy about handing out your business card at breaks, lunch, mixers, or scheduled activities.

Join a local investment group. If you can meet the SEC “accredited investor” criteria ($1M net worth or $200K annual income), this is a great way to be seen by potential investors as peers before you need money. Plus you will see how the process really works from the other side of the table – the best preparation you could have for your own approach later. In most cases, these groups don’t require that you invest in others, as a condition of membership.

If all of these are obvious to you, then you are already on the right track, and you probably wouldn’t consider doing any of the “don’ts.”

  • Don’t do cold calls or email blasts of your resume and business plan to potential investors.
  • Don’t corner and barrage that heavy hitter you heard about with your life history at a social gathering.
  • Don’t send your unfinished business plan unsolicited to every VC or investment group you can find on the Internet, just to see if they like the concept.
  • Don’t hand out your business cards to everyone in the room, in hopes that one will be impressed with how unique and expensive it looks.
  • On LinkedIn, don’t complain to everyone that you are limited to only 3000 invitations, and request them to send you an invitation to become friends.

Back on the positive side, I like to say, especially for us introverts, that networking is more about listening that it is about talking. Believe it or not, most successful investors have big egos, and will probably remember you better if they do most of the talking at first.

Nevertheless, have your elevator pitch honed, and don’t be shy about giving it. Don’t forget your enthusiasm, and have fun, but remember your manners!

Marty Zwilling

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Saturday, February 9, 2019

10 Ways To Improvise, Thrive And Survive In A Startup

Logo_improvisation_theatraleAs an entrepreneur, you have to improvise and adapt quickly to survive and thrive in the face of the unpredictable challenges of the market. But this improvisation a not a comedy, although there are some distinct correlations, in relation to reacting, adapting, and communicating. In business and in comedy, you win most often with “Yes, and …” instead of “Yes, but ….”

I definitely learned a few things about how to improvise effectively in business from the classic book, “Getting to ‘Yes And’: The Art of Business Improv,” by Bob Kulhan, who is a master of the art in both comedy and business. Kulhan is a professor at the Duke University School of Business, but was trained in improvisation by some comedy greats, including Tina Fey and Amy Poehler.

He draws on cognitive and social psychology as well as behavioral economics to show the rest of us in business how to think on our feet, and approach business challenges with fresh eyes and mental agility. From my own perspective of many years as an executive and startup advisor, I recommend his improvisational keys to improving the culture of your business:

  1. Don’t be afraid to try, and fail, before you succeed. You can’t learn and adapt quickly to the changing needs of your customers and the marketplace if you are afraid of failure. As in comedy, you have to take risks, think outside the box, and be willing to face some brutal feedback, to find the path that works, all with a smile on your face.

  2. Tell you team what you want, plus why and how. Be explicit on your intent. Team members can’t help you change if they don’t clearly understand where they need to go and how to get there. There is no set formula for change in business, so you need to improvise with a positive message. Everyone is turned off by a “Yes, but …” response.

  3. Always acknowledge ideas and add to them. This “Yes, and …” phrase is an improvisational technique long used to move people forward. Make sure everyone understands the power of this phrase when sharing opinions and suggestions, and in holding people accountable. Teach them how to actively observe and listen to input.

  4. Get buy-in through participation and feedback. By openly requesting and rewarding feedback, you are demonstrating that you value employee input and you want to include everyone in the decision process. Team involvement encourages everyone to buy-in, in spite of the work it entails, because they feel personal ownership in the business.

  5. Build team trust through shared experiences. Teams need to bond, and that can start with an off-site structured event. The key is not only to have everyone in the same place, but to have them share a memorable experience in a place that will connect them further in the future. Bonding is always enhanced through team recognition and awards.

  6. Routinely schedule team exercises and challenges. The message here is that practice makes perfect. We see this in the Olympics and professional sports. You and your team need to be well-oiled, and able to work together automatically, before you can hope to react quickly to changes in the marketplace. Improvisation does require training.

  7. Leaders must be the example. Entrepreneurs need to walk the talk, be consistent, passionate, and accountable for their actions. No matter what happens, you must be the model of the “Yes, and …” approach – always communicating the need for change, and leading the charge to listen, learn, and adapt. Business culture is set by leader actions.

  8. Empower your team to initiate the change process. Ownership is essential in creating an inclusive environment. Empower your team to help you create and protect this culture. Don’t let blame rear its ugly head. Make sure they have the resources and the education to get change done with you, or without you. They need a level of comfort to improvise.

  9. Remove those who refuse, or undermine the team. A smaller team working well together is much more effective than a larger dysfunctional team, just as it would be in a comedy troupe. Often, it’s in the best interest of the team, the company, and certainly the employee to part ways or move to a new team before permanent damage is done.

  10. Be tenacious to make required change happen. The leader who is a tenacious implementer of change will always follow-up on the initiatives started. You can cause “change fatigue” by jumping randomly from one idea to another, with no follow-through. All change needs to tie back to basic principles, values, and objectives of the business.

Who would have guessed that the techniques practiced by comedy troupes would have such applicability to businesses? It’s just another example of the value of thinking outside the box, and reframing of disciplines from one domain to another. Are you using that level of thinking in your business? The future of your business may depend on it.

Marty Zwilling

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Friday, February 8, 2019

5 Keys To Mitigating New Venture Tax And Legal Issues

tax-lawA frequent concern I hear from aspiring entrepreneurs is “I have invented a great product, but I have no idea where to start in setting up a company, to avoid all the tax and legal problems I hear about on the news.” In fact, this is a complex question, with answers that are different all around the world, but I have some general rules of thumb that apply here in the USA to get you started:

  1. Create a business entity early to encapsulate your venture. To avoid the tax implications of co-mingling personal and business funds and assets, create your business entity before you hire anyone or spend money building the product. Don’t wait for that first investor or prototype. The primary business entity options include a sole proprietorship, Limited Liability Company (LLC), or a Corporation (B-Corp, C-Corp, or S-Corp). I recommend starting with the simplest, quickest, and the least expensive – the LLC. It can be done online, without a lawyer, often for less than $100.

    Worried you won’t choose the right business structure? Since you can upgrade your business entity later as required, and you can’t foresee where your business is headed, don’t worry about whether you’re choosing the perfect structure today. Just focus on protecting yourself now by selecting the structure that makes the most sense for your present circumstances.

  2. File founder stock election so no taxes are due until exit. File an 83(b) election with the IRS within 30 days of founding the company, while the market value of your startup is essentially zero. Failing to file or waiting to incorporate until a first investor arrives could lead to a nasty tax bill in the middle of startup rollout when you can least afford it.

    Even though the initial stock has no value or market, it is imperative that you document the division of ownership immediately between co-founders commensurate with their investment, contribution, and role. Proper documentation will minimize later legal claims and issues.

  3. Set up a separate records system for your new business. Many entrepreneurs follow old shoebox habits in managing expenses until the company launches. For legal and tax purposes, I recommend a formal system, like Intuit or FreshBooks, for the new venture. You’ll also need to save tax records, bank statements, canceled checks, and contracts.

    Proper record keeping is especially important if you have employees and contractors, as you’ll need to manage W-2s, Form 1099s, employment agreements, attendance records, termination letters, and any settlement or ownership documents with former employees.

  4. Don’t overlook business tax filing requirements and dates. For corporations in the US, the annual tax return due date is a month earlier than for individual tax filings, so be prepared. In addition, many corporations have quarterly filing requirements, or even monthly ones if you have payroll taxes, sales taxes, or state filing requirements.

    Also remember that your tax entity election doesn’t have to match the legal entity. For example, any LLC or S-Corp can elect to be treated for tax purposes as a sole proprietorship (Schedule C), partnership (Schedule K), or as an S-Corp (Form 2553).

  5. Upgrade your legal business entity to meet growth needs. You may start as an LLC but find that a potentially high-value investor insists on having preferred stock, which is only available with a C-Corp. Also, mergers, acquisitions, and alliances with other companies almost always drive the need to modify your organizational entity for legal or operational purposes.

    Additionally, I recommend that you review and update co-founder ownership agreements annually. In these cases, you will typically use a business attorney to upgrade your corporate platform or modify contracts, as appropriate. You’ll likely need a business attorney on a regular basis. Consider vetting attorneys early on before you need one to find counsel that understands your type of business. This way you will have an established relationship with an attorney you trust when the time comes to get help.

If you need help in the beginning or along the way, I recommend a visit to your nearest Small Business Development Center (SBDC), your local SCORE office, or your local attorney. In addition, you can find a wealth of information online via the Internet, from tax experts and industry associations. But remember that the responsibility for legal and tax considerations is all yours.

All these organizational and operational considerations are one of the main reasons that an innovative solution alone does not assure a successful business. If you don’t feel that you have the ability to address them, I recommend that you find a co-founder who can complement your skills and balance the equation, as it frequently takes a well-rounded team rather than a solo owner to run a great business.

Marty Zwilling

*** First published on CayenneConsulting on 01/20/2019 ***

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Wednesday, February 6, 2019

10 Areas Where You Can Win With Predictive Analytics

internet-predictive-analyticsTraditional business intelligence (and data mining) software does a very good job of showing you where you’ve been. By contrast, predictive analytics uses data patterns to make forward-looking predictions that guide you to where you should go next. This is a whole new world for small businesses seeking enterprise application opportunities, as well social media trend challenges.

According to Eric Siegel in the updated version of his classic book “Predictive Analytics,” it’s the power to predict who will click, buy, lie, or die. He calls his book a primer, but his real-life examples illustrate well how predictive analytics unleashes the power of data, and how “big data” embodies an extraordinary wealth of experience from which to learn.

Eric provides many examples of potential and real application areas that are ripe for predictive analytics, but my view is that smart entrepreneurs can extrapolate these to hundreds more, just waiting to be tapped. Here are ten examples to get your creative juices flowing:

  1. Targeted direct marketing. The challenge is to increase response rates and propagate a single view of the customer, by integrating customer data from multiple Web and social media interactions. Then companies can determine promotional effectiveness by narrowly defined customer segments, by location, or by delivery channel.

  2. Predictive advertisement targeting. Online, everyone wants to know which ad each customer is most likely to click. Then they can display the best ad, based on the likelihood of a click, as well as the bounty paid by its sponsor. Everyone wins, since consumers hate being presented with ads that are irrelevant to them.

  3. Fraud detection. We all want to know which transactions or applications for credit, benefits, reimbursements, refunds, and so on, are fraudulent. On the other side of the table, businesses need to minimize false insurance claims, inaccurate credit applications, and false identities.

  4. Investment risk management. Whether you are contemplating an investment in your favorite startup, or a little-known stock on a public exchange, there is “big data” out there that can’t possibly be evaluated by you without predictive analytics. Companies need the same service on partner and acquisition candidates, even vendors.

  5. Customer retention with churn modeling. Every business wants to predict which customers are about to leave, and for what reasons, so they can target their retention efforts. New one-time customers may be incented to return. Without predictive targeting, a retention campaign may cost more than it gains.

  6. Movie recommendations. Movies are selected, or recommended to customers, based on past reviews, related interests, or analysis of Twitter comments. On the movie production side, it’s time to start doing analyses on movie scripts, based on reaction to similar movies, to predict box office revenue and cities to hit.

  7. Education – guided studying for targeted learning. Every quiz show aficionado would like some guidance on which question areas need more study, and every student needs help on how to spend his limited study hours more effectively. Schools need the same analysis to provide more effective teaching media and techniques.

  8. Political campaigning with voter persuasion modeling. I’m sure every campaign would love to know which voters will be positively persuaded by specific contacts, such as a phone call, door knock, flier, or TV ad. The rest of us would rather not be annoyed by the multiple contacts of the wrong type.

  9. Clinical decision support systems. With costs escalating in healthcare today, it’s more important than ever to determine which patients are at risk of developing certain conditions, like diabetes, asthma, heart disease, and other lifetime illnesses. Additionally, predictive analytics can help make the best medical decision at the point of care.

  10. Insurance and mortgage underwriting. Predictive analytics will allow auto insurance companies to accurately determine a reasonable premium to cover each automobile and driver, which helps their bottom line, as well as ours. A financial entity needs the same ability to more accurately assess a borrower's ability to pay before granting a mortgage.

Some experts group predictive analytics in the new term “business analytics” intending to define an umbrella group including data warehousing, business intelligence, enterprise information management, enterprise performance management, and analytic applications. But whatever the name, the opportunity is still there, and it’s large.

According to a recent Markets and Markets report, the predictive analytics market is growing at a compound rate of 22.1%, and is expected to reach $12.41 billion by 2022. Despite all this, the best opportunity for you is still the one you love and know the best, and one that no one else has recognized. The possibilities are endless, so why haven’t you started yet?

Marty Zwilling

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Monday, February 4, 2019

5 Unique Elements Make A Winning Selling Proposition

If you are looking for funding and customers for your new business, you need to identify your “unique selling proposition” (USP) right up front, in 30 seconds or less, to differentiate yourself in today’s information overload. That may sound obvious, but as a new venture investor, I rarely see it happening. Investor and customer attention spans are short, and both will write you off quickly.

A winning USP example is the FedEx lead “When it absolutely, positively has to be there overnight.” This statement leaves no confusion in the minds of investors, or customers, of what the company does and how it is different (and better) than the competition. Now we are ready to listen longer to hear all the details and decide if the potential sounds real and doable to anyone.

Of course, now that you have investor attention, the devil is in the details. Every investor and banker I know looks for a few more key elements in the plan and pitch that will ultimately make or break the deal, including the following:

  1. The target customer segment definition and size. Will you be selling to businesses or consumers, or both? Investors realize that the resources and risk required to hit both markets concurrently are great, so they will likely look for focus, or a staged approach. Of course, we all prefer billion dollar opportunities, with double-digit growth rates.

    A niche market sizing or a shrinking opportunity may make a good family business, but is likely not of interest to investors. Even large opportunities may already be highly saturated (more than 10 existing players), making another “me too” player not exciting.

  2. Problem or need uniquely addressed by your solution. Great products solve painful real problems, and are not just “nice to have” or “easier to use.” Ideally the solution embodies intellectual property that you own, giving you a sustainable competitive advantage. You need evidence or a prototype to prove feasibility with credibility.

    For example, everyone would agree that a cure for cancer is a worthy solution, if you can show evidence that it works, and can be replicated and sold for a rational cost and price in the market today. A new easier to use social network may not get anyone excited.

  3. Educated customers ready and able to pay for the solution. Truly disruptive technology solutions are suspect, since many fear change and are not motivated to move away from current approaches. Investors know that extra time and money are required to educate the market to whole new things, like the move from horses to automobiles.

    Witness the difficulty even today to find success with alternative transportation platforms, including Segway, electric bicycles, automobiles that fly, and even electric cars. Another investment barrier is good social solutions which appeal only to people with little money.

  4. The net value of this solution from the customer’s perspective. Value is perceived only in the eyes of the customer. If you see the solution as very valuable, but the target customer doesn’t, there is no foundation for investing. Also, the benefit of the solution must be offset against the cost of all other options available to the customer.

    Even if your USP is a cost reduction (10 percent) for an existing commodity, success is not assured. In my experience, existing customer habits and loyalty will minimize customer movement to a new offering which offers a net savings of 20 percent or less.

  5. The qualifications of you and your team to build a business. Building a product is not the same as building a business. Investors look for new venture founders who have strong business skills or experience within their team, as well as expertise in the product or business domain. I recommend a co-founder or team to complement your strengths.

    For example, I had the pleasure of working with Bill Gates and Steve Ballmer, when Microsoft was just a startup. These two were perfect co-founders, with Bill having the technical expertise, and Steve bringing business experience from Procter and Gamble.

In reality, these five elements constitute your unique selling proposition to investors, after they hear and believe your USP for customers. Even if you don’t need external investors, and intend to bootstrap the new venture yourself, you may use the points here to assess your own investment. Life is too short to endure the pain of starting any business with the odds stacked against you.

Marty Zwilling

*** First published on Inc.com on 01-22-2019 ***

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Sunday, February 3, 2019

10 Thinking Methods That Foster Business Innovation

Innovation is the key to long-term business success, both in startups as well as established organizations. Yet every business and every entrepreneur I know struggles with this challenge, focused on hiring the right people and implementing the right process. Yet, in my experience the key seems to be more a discipline of innovative thinking from everyone, driven from the top.

I was happy to see my own view reinforced in the classic book, “Innovation Thinking Methods for the Modern Entrepreneur,” by long-time entrepreneur and innovation expert Osama A. Hashmi. He provides dozens of ideas and examples to illustrate how this discipline can work, and the power it brings to any organization. Here are ten key lessons from his book that we can all learn from:

  1. Utilize first principles thinking. The idea is to seek fundamental truths that will always remain true, after you remove all the things that don’t necessarily have to remain true. Then, when you are unable to remove more layers, you can build up to the fastest and most efficient way of getting that base thing done. Elon Musk recommends this approach.

  2. Practice the one-sentence method. Distilling a field of work down to a single sentence describing the core elements helps to innovate and keep ahead of the curve. If you keep fixated on that core essence, and figure out the rest along the way, you have a better chance of innovating and trying out new things. That’s how an industry reinvents itself.

  3. The future history assessment approach. Start the product design process by thinking about what a historian in the future would look back on as the one big thing that changed everything. This idea helps to distill down the most important things to make or sell in a product. Amazon uses this technique internally for all new product design efforts.

  4. Challenge the fundamental assumption. Ferret out the fundamental assumptions that everyone keeps making whenever they make a product of this type. Brainstorm with the intent of changing these assumptions, and radical innovation will follow. An example is the evolution of computer control to screen touches and gestures, versus keys and mice.

  5. Outsource services back to the customer. Pervasive access to the Internet and social media have allowed customers to take an active role in helping other customers, with customer support, requirements definition, and open source development. This has facilitated innovation in responsiveness, as well as profitability. The trend has only begun.

  6. Re-analyze the context of the last change. We tend to view present and future solutions in today’s context, rather than the context of the last change. Market dynamics change rapidly, so thinking back to why things changed in a previous time can generate new and innovative approaches, based on the new market context and technologies.

  7. Force original intent thinking. When people live in a certain status quo long enough, they start to forget what they originally set out to do. “It has always been this way” becomes the way of thinking and stalls innovation. When you provide a solution that gets customers closer to their original intent, they’ll be quick to drop current lessor solutions.

  8. Force the innovator’s dilemma on competitors. This is the concept that successful competitors have a hard time investing in new products that will cannibalize their existing core business. Focus thinking on what you can innovate, and how you can position it in the market to make it impossible for incumbents to follow without killing themselves.

  9. Explore the negative space of possibility. For innovation-thinking, what people are doing today or even wanting today may not be an interesting-enough question. What’s more interesting is what people are not doing today, or what they should be using to make their lives drastically better. Don’t just chase the space that already exists.

  10. Pick an impossible target and get mad about it. The obsession of solving a problem once and for all frames a certain type of thinking – one where you start to feel that no other product or company in that market gets it, and no one else has been able to crack it because all the solutions are awful. Now you have the right mindset to break barriers.

There are many more existing innovation-thinking methods, and more to be discovered, but this selection should be adequate to get you started. As an entrepreneur, it’s your responsibility and your challenge to be the leader and role model in fostering and rewarding innovation-thinking in your business. Your long-term survival and satisfaction depend on it.

Marty Zwilling

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Saturday, February 2, 2019

The Sharing Economy Is Changing The Rules Of Business

The pervasive ability and need to communicate constantly and globally through the Internet and smartphones is incenting everyone to get more out of their own assets and time, and capitalize on the idle resources of others. This sharing economy is rapidly becoming the new business of sharing, with major winners already including Airbnb (rooms), Uber (rides), and Chegg (books).

If you are an aspiring entrepreneur, or an existing business, and haven’t yet sized any of these opportunities, you may be already late to the game. Until I read the classic book “The Business of Sharing,” by Alex Stephany, who founded JustPark (current valuation estimated at £33M), I too had no idea of the scope of opportunities, and the 350 or more players already out there.

The business tenants of the sharing economy, with alternative names including collaborative consumption, peer-to-peer economy, or “we-conomy,” always imply these five basic principles and assumptions:

  1. Sharing economy platforms create reciprocal economic value. Usually these are revenue-generating e-commerce sites, or have the potential to be revenue-generating. Even if the goods and services are changing hands as gifts, or the revenue motive exists only to make services sustainable, the economic value is evident.

  2. There is value in the “idling capacity” of all assets. Idling capacity is a notion that was first systematically studied and measured in the context of industrial processes. The sharing economy applies the same ruthless logic of how best fully utilize our clothes, bicycles, driveways, computers, pets, and free time.

  3. For utilization to increase, assets need to be made accessible. These days, accessible starts with being visibly listed online, in lieu of the now old-fashioned rental sites and swap-meets. It can mean selling through peer-to-peer e-commerce (eBay), renting (HomeAway), gifting (yerdle), or even swapping (Swapz).

  4. Assets need to move in a community of engaged users. Community means more than supply and demand. Often these communities are built around special interest groups, where the members interact through social media, help each other, and trust each other, and the relationships go well beyond the transactions.

  5. Access to assets in a community leads to a reduced need to own. One consequence of the new sharing business model is that goods become services. The Zipcar sharing service is said to take 17 other cars off the road, as opposed to Hertz car rental, which only adds more vehicles into every community.

Where and when is all this leading? I believe that we have only seen the beginning. Certainly change happens more slowly in areas encumbered by political systems, long-standing cultures, and large dominant brands. Although the sharing economy isn’t really new, here are a few of the arenas that Stephany and I believe are still ripe for disruption:

  • Education. With US student debt at over one trillion dollars, startups like Skillshare and Udemy provide top-class vocational training for the price of a Harvard hoodie.

  • Insurance. An example is Berlin-based startup Friendsurance connecting people to create a private insurance pool for payout on household and consumer electronic claims.

  • Healthcare. Cohealo is now allowing hospitals to share medical equipment. Fertility can be helped by less restrictive ways for people to share their sperm and eggs.

  • Restaurants. In Cuba today, there are over 1,000 restaurants in people’s homes, known as paladares. Chefs are beginning to offer peer-to-peer dining platforms or cooperatives.

  • Financing. With crowdfunding, entrepreneurs and artists no longer need to wait for family money or venture capital. In the US, we are still waiting for equity crowdfunding, but the rewards, donation, pre-order, and debt-funding models are already working.

Yes, the sharing economy is changing the rules of business, and opening a wealth of opportunity for innovative entrepreneurs around the world. Those that recognize it early still have time to ride the wave, and those that don’t will lose out on a lucrative way of doing business. It’s time to start caring about sharing.

Marty Zwilling

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