Wednesday, April 29, 2020

10 Keys To Limiting Your Startup Story To Ten Minutes

ten-minute-startup-pitchThe average length of a funding pitch to angel investors is ten minutes. Even if you have booked an hour with a VC, you should plan to talk only for the first fifteen minutes. The biggest complaint I hear from fellow investors is that startup founders often talk way too long, and neglect to cover the most relevant points. Or they get sidetracked by a technical glitch due to poor preparation.

If you start by pitching your extended life story, that’s the wrong point. Equally bad is a full tutorial on your new disruptive technology. Investors are more interested in your solution and your business, rather than your technology. Here are some tips on the right approach and the right points to hit:

  1. Match your material to the time allotted. If you have ten minutes, that means no more than ten slides. Then match your pace to cover all the material. I’ve seen several presentations that never moved past the first slide before running out of time. An obvious effort to keep talking after the time limit won’t save your day with investors.
  1. Remember you are pitching to investors, not customers. Some entrepreneurs seem to think that their product pitch is also their investor pitch. I outlined what investors expect to see in an old article “Adding Slides Does Not Enhance Your Investor Pitch.” These are tuned to the ten-minute limit, but are just as adequate if the investor gives you an hour.
  1. Check the setup and set the stage. If the projector doesn’t work, or won’t connect to your laptop, you are the one that loses. Have at least one backup plan, such as copies of your slides to hand out and discuss, in case all else fails. The first words out of your mouth should be “Can everyone hear me, and read the screen?”
  1. Research your audience before presenting. The most respected presenters are the ones who have done the research before-hand to know who is in the audience, and have tailored their message to these interests. If you know only a few people in the audience, acknowledge them, and convince the others that this is not a random cold call for you.
  1. Dress appropriately and professionally. It’s always better to be over-dressed than under-dressed. Business casual is the standard. Remember that most investors are from a generation where faded and torn jeans were on the wrong side of success in business.
  1. Let the top person do all the talking. Tag team shows don’t work in short venues. More importantly, investors want to see and hear the top guy – typically the founder or CEO. They will be judging his aptitude, his character, and his passion. Others can be present for effect, but deferrals to team members for answers are a sign of weakness.
  1. First, get their attention with your elevator pitch. Start with the problem and your solution. These are your hooks, and they better be covered in the first 30 seconds. State your value proposition, and what specifically you are offering to whom. Skip the acronyms, history of the company, and the colorful autobiography.
  1. Lead with facts, but skip the details. Skip the generic marketing phrases like more user friendly, massive opportunity, and paradigm shifting. “According to Gartner, the opportunity is 100 million by 2019, with 12% compounded growth.” Investors don’t need to know the implementation details of your patent or customer support plan.
  1. Don’t forget to ask for the order. How much money do you need, and what percent of your company are you willing give up for that amount? If you want investor interest, the business parameters of a deal should be presented as clearly as the product parameters.
  1. Close by asking for questions and promising follow-up. Acknowledging feedback and actually listening for ways to improve will always lead to a positive impression. You should answer questions with data if you have it, but avoid defensive responses in favor of a promise to follow-up after the meeting.

Most importantly, don’t forget to practice, practice, practice. Just because you have given a thousand pitches in your life, don’t assume you can finesse this one by reading the bullet points in real time from the slides that your team put together for you. You need to be totally familiar and comfortable with your pitch to give it effectively.

Forget the theory that you can “rise to the occasion” and impress everyone with your dynamic speaking ability. If you are pitching the wrong point in the wrong way, the occasion will be more your demise rather than the rise of your dream.

Marty Zwilling

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Monday, April 27, 2020

5 Tips To Keep Your Startup Productive, Not Just Busy

busy-business-executiveIf you want to make a great first impression on a startup investor or an advisor like me, don’t try to convince me or show me how busy you are. For some reason, too many aspiring entrepreneurs I know seem to focus on “actions” rather than “results.” Based on my experience, survival and success are both about doing the right things, and not about doing everything.

I’m sure you all know someone who always seems to be overworked, but often comes up short on the delivery side. These are not the entrepreneurs that I want to support, since I’m well aware that running a startup is far more complex, albeit more satisfying, than most conventional roles in established enterprises.

Here are some key principles that I recommend to keep you on a track to maximum business results in the shortest period of time, in the unstructured world of startups:

  1. Don’t do “easy” tasks before “challenging” ones. You may see this as a quick way to shorten your task list, but it usually means that important things don’t get done on time. Good entrepreneurs learn to delegate the easy tasks, and spend their time on critical ones, including honing your business plan, strategic direction, and growth initiatives.

    For example, you may feel you are saving money by doing all your own administrative work and monitoring social media feedback. Yet if that leaves you with no documented business plan or unclear strategy, most investors and even customers will walk away.

  2. Prioritize your tasks ahead of helping others with theirs. I’m a total believer in servant leadership and mentoring others, but nobody wins when you are in charge as an entrepreneur, and the business fails because you didn’t do your job. Most often, smart scheduling and delegation is more effective help than instantly dropping your own work.<

    I once worked with a cohort who prided himself on his effectiveness in helping other members of the team, even though his efforts often led to late or non-delivery on his own assignments. As a result, he missed opportunities, and the whole organization suffered.

  3. Use technology and tools, but don’t let them sink you. As an entrepreneur starting a new business, you have a lot to learn. There are complex processes, like filing a patent, and financial tools that may be new to you, including Excel and Quickbooks. It’s important to get help with these tools, rather than struggle for days using them the wrong way.<

    These days, it’s easy to find comprehensive videos and online courses on the Internet to get you up to speed, but I find many entrepreneurs who are too independent and proud to look or ask for help. Don’t forget the wealth of “gig” experts for outsourcing at a low cost.

  4. Commit to business excellence, but reject perfectionism. Building an innovative startup is normally an iterative process, so don’t plan on making everything perfect the first time. Remember the concept of minimum viable product (MVP), which is designed to test viability and interest before you burn through too much of your energy and resources.

    I find that many of the most passionate and committed entrepreneurs are also perfectionists, and they often hurt their own case by being unduly focused on detailed product plans, long presentations, and covering every possible contingency.

  5. Take care of your health, and keep your life in balance. I understand that every entrepreneur is highly motivated, but passion alone isn’t a substitute for proper eating, sleeping, and change-of-pace activities. Your productivity can be severely compromised by lack of balance, making you ineffective in managing key tasks and people around you.

    In my experience as an angel investor, it was an accepted axiom that we invested in people, even more than the product. I can remember several pitches where the entrepreneur looked and acted out of balance, thus terminating their funding opportunity.

Remember, as an entrepreneur you don’t get paid (or funded) by how many hours you work. The reality is often the opposite. If you can convince an investor, and customers, that your value proposition is intuitively obvious, and your justification work was easy, then people will be quick to support you and get on your bandwagon.

That’s why successful entrepreneurs, including Richard Branson and Elon Musk always look and act like they are having fun, and always talk about their accomplishments rather than all the painful work. But behind the scenes, you can bet they know and use the techniques listed here for getting maximum results in record time.

Marty Zwilling

*** First published on Inc.com on 04/13/2020 ***

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Sunday, April 26, 2020

6 Leadership Requirements For Every Startup Business

startup-leadership-requirementsAlmost every entrepreneur starts their journey by developing a solution, based on their idea of a new technology or required service. These idea and developer skills are necessary, but not sufficient, to build a business. A real business requires leadership – thought leadership to attract customers and mind share, as well as people leadership around a team, partners, and investors.

One answer is for the developer to find a partner, like Steve Jobs, who is a leader to build and run the business, and two heads in a startup are almost always better than one. But in my experience as a startup mentor, I find that the happiest and most successful entrepreneurs in the long-term are those that continually stretch themselves to get comfortable in the leadership role.

In fact, being a leader is often outside the experience and training domains of both experienced developers and experienced business professionals. As pointed out in a classic book by leadership expert Herminia Ibarra, very few people are born knowing how to “Act Like A Leader, Think Like A Leader.” But we can all learn and step up if we get the right guidance.

I really related to Ibarra’s direction on how to build your leadership skills by learning to complement your insights with outsights, defined as the valuable perspectives you gain from external experiences and experimentation. Every entrepreneur already knows that building a startup is all about experimentation, new experiences, and problem solving.

To get you started, here is my summary of a half dozen of her key tips, re-focused to the leadership success elements for entrepreneurs, even though the same principles apply to business professionals in larger companies, and even non-business domains:

  1. Don’t be afraid to challenge your own identity. Because doing things that don’t come naturally can make you feel like an imposter, authenticity becomes an excuse for staying in your comfort zone. The trick is to work toward a future version of your authentic self by doing just the opposite, stretching way outside the boundaries of who you are today. Emulate the leadership attributes of entrepreneurs you admire, such as Richard Branson.
  1. Let go of performance goals that limit new learning. We all like to do what we already do well, so it’s easy to focus on achieving higher performance in that domain. Take the risk of setting goals in the leadership domain that will force non-linear learning. This is called avoiding the competency trap, and lets you bridge to new competencies.
  1. Manage the stepping up process. Let the gap between where you are and what you want to achieve be the spark that motivates you to action. Stepping up to play a bigger leadership role is not an event; it’s a process that takes time before it pays off. It is a transition built from small changes. Map out the steps, and celebrate each success.
  1. Practice your new learning in extracurricular activities. Professional roles outside your startup can be invaluable and less risky for learning, practicing new ways of operating, raising your profile, revising your limited view of yourself, and improving your leadership capabilities. It can then be exhilarating to bring these outsights back home.
  1. Create and use new networks to tap new ideas. When you connect to people in different worlds, you will access different perspectives to broaden your own. Avoid the network trap of sticking to the same old players for insight, motivation, and advice. Leaders need at least three different networks – operational, strategic, and personal.
  1. Start acting and thinking like a leader now. Stretch yourself to take action now, and recognize that you may not see at first how all the dots connect as you start branching out beyond your comfort work zone, habitual networks, and historical ways of defining yourself. Slowly but surely a more central and enduring leader identity will take root.

Thus if you have mastered the art of developing solutions, but struggle with building a business, it’s time to focus on your critically important leadership skills. Stop hiding in your comfort zone, and branch out for some new outsights. You too can find an entrepreneur identity in yourself that you never thought possible, and business success that you once only dreamed about.

Marty Zwilling

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Saturday, April 25, 2020

10 Strategies To Make You A Lucky Winner In Business

lucky-winner-in-businessDid you ever wonder why some entrepreneurs always seem to have all the luck and success, while others never seem to catch a break? As an angel investor, I quickly learned that luck has very little to do with it, and I now look for some personal characteristics and leadership styles that separate the potential winners from the losers.

These differences are the reason that investors say that they invest in people, rather than ideas. As I was reminded again by the classic book from Dennis Perkins, “Leading at the Edge,” this isn’t a new concept. He illustrates this by comparing the acts of numerous teams which faced the edge of life and death as early Antarctic explorers in the 1800s.

He was able to identify ten lessons from the common threads to survival in the winning explorer teams, which I believe apply equally well to the survival and success of business startup teams today:

  1. Never lose sight of long-term goals, but focus real energy on short-term objectives. Don’t be afraid to pivot, and commit to new objectives with as much passion and energy as the original. Andy Grove of Intel fame started making memory chips, but switched to microprocessors with a vengeance when Japan totally undercut his pricing.
  1. Set a personal example with visible, memorable symbols and behavior. Under the stresses of a startup, visible leadership cues can make the difference between success and failure. When McDonald’s was still a small company, Ray Kroc, the CEO, had a penchant for asking a store manager to help him clean up trash in their parking lot.
  1. Instill optimism and self-confidence, but stay grounded in reality. That means you must first find optimism in yourself. Then it extends to the hiring process. Herb Kelleher, while CEO of fledgling Southwest Airlines, said he only wanted people with positive attitudes. He also famously said," We don't do strategic planning. It's a waste of time."
  1. Take care of yourself: Maintain your stamina and let go of guilt. Evidence shows that effective entrepreneurs have high levels of energy, and handle stress well. But no one is superhuman. I once worked for a CEO of a startup company who insisted on working 20 hours a day, until a health crisis almost killed her, and did kill her company.
  1. Reinforce the team message constantly: “We are one – we live or die together.” Teamwork is the hallmark of high-performing startups. Establishing a shared identity is the first step to creating unity. The Google team stayed tight as they developed the technology, first working out of Larry Page’s dorm room at Stanford, then a garage.
  1. Minimize status differences and insist on courtesy and mutual respect. CEOs who talk, and really listen, to everyone in the organization gain the highest reputation. Not surprisingly, based on the success of their companies, both Mark Zuckerberg and Elon Musk scored in the top ten most respected CEOs per a recent Glassdoor Survey.
  1. Master conflict – engage dissidents, and avoid needless power struggles. Some entrepreneurs go to great lengths to avoid interpersonal friction, or engage the wrong way. Those of you who viewed the movie The Social Network, saw an example of new entrepreneurs dealing with conflict poorly, almost leading to the demise of Facebook.
  1. Find something to celebrate and something to laugh about. Especially under the constant pressures of a startup, the ability to lighten up, celebrate, and laugh can make all the difference. Herb Kelleher, mentioned earlier, is one leader who also understood the power of humor in business, with his own antics, and focus on “fun ware.”
  1. Be willing to take the Big Risk. Risk aversion does not always result in disaster, but neither does it create change. Risk takers make things happen. Think of the risk taken by CEO Todd Davis of LifeLock when he posted his Social Security number online, to assure customers the he could protect them from identity theft. It worked.
  1. Never give up – there’s always another move. Rather than expecting things to go right, entrepreneurs have to assume things will go wrong, and solutions are elusive. Colonel Sanders started at a late age to build his chicken recipe into KFC (Kentucky Fried Chicken). It took two years of persistence to get the money. The rest is history.

Investors (and team members and partners) find that it’s more effective to assess an entrepreneur’s fit to these personal characteristics than it is to assess the real potential of an idea, or the probability of good luck. We listen to you and judge how many of these are practiced by you. When it’s time for due diligence, we will talk to your team. Their perception is the only reality. What do you think they will say?
Marty Zwilling

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Friday, April 24, 2020

9 Strategies To Promote Your Image As A Communicator

megaphone_loud_speaker_voice_announcementEvery business professional and entrepreneur believes they are good communicators, but how do they know? It’s really the perception of the recipients that counts, and poor communicators are almost always poor listeners, so they don’t hear the shortcomings. Warren Buffet once told a class of business students that better communication could boost their value by fifty percent.

That’s certainly worth going after, so it is time for all to take a hard look in the mirror, recognize the need to improve, and make the commitment to change. But looking in the mirror doesn’t help unless you know what to look for. I see real help the classic book, “What MORE Can I Say,” by Dianna Booher, one of the most recognized business communication gurus, which clearly calls out the parameters of effective business communication.

In that context, she offers a nine-point checklist for success in the art of communication and persuasion that I believe every professional should use in their own self-evaluation. I’ll paraphrase a few of her insights here to get you started:

  1. Generate trust rather than distrust. Effective communication requires trust in you, your message and your delivery. We tend to trust people that we think are like us, or we have social proof that others trust, or we feel reciprocal trust from the sender. People who are optimistic, confident, and demonstrate competence generate trust. Are you one of these?
  1. Be collaborative rather than present a monologue. Collaborating for influence has become a fundamental leadership skill. Be known for the questions you ask – not the answers you give. Statements imply that you intend to control the interaction, whereas questions imply that other input has value to arriving at a mutually beneficial decision.
  1. Aim to simplify rather than inject complexity. Simplicity leads to focus, which produces clarity of purpose. People distrust what they don’t understand, what they perceive as doublespeak, or things made unnecessarily complex. Influencing people to change their mind or actions requires building an intuitive simple path to your answer.
  1. Deliver with tact and avoid insensitivity. Some word choices turn people off because they are tasteless, tactless, or pompous. Phrase your communication to avoid biases that might create negative reactions. Consider using other authority figures or quotes to deliver a more persuasive message while eliminating any sensitive implications.
  1. Position future potential instead of achievements alone. The allure of potential is normally greater than today’s actual achievements. This is especially true for career advancement, motivation, and the power of systems. For customers and clients, let them have it both ways. Consider what you can package as your own untapped potential.
  1. Consider the listener perspective rather than the presenter. Listeners tend to average all the pieces of information they hear and walk away with a single impression. More is not always better, so reduce the length of presentations and speeches. Perceptions are more important than reality. Avoid the over-helpfulness syndrome.
  1. Tend toward specifics rather than generalizations. Many executive speeches miss the mark because they aim for the general constituency and hit no one. People need to know how a message relates to them personally, not just what has to be done and why. Your challenge is to make the future seem attainable and applicable to each listener.
  1. Capitalize on emotions as well as logic. Emotion often overrides logic, but logic rarely overrides emotion. For many listeners, a logical explanation merely justifies and supports an emotional decision that has already been made. Recognize and calm first any emotional reactions of fear. Engage multiple senses to reach a listener’s emotion.

  1. Lead with empathy before your own perspective. Empathy starts with active listening to what’s being said and what’s not being said. Listen for the gaps and distortion between perception and reality, and then focus on closing these gaps before any persuasion to your own perspective is attempted. Let others help you listen, and tune your response.

As the economy struggles to flourish, and the competition gets tougher, you need every ounce of communication skill you can muster to land the career and business opportunities that will be coming your way. Standing still means falling behind. Are you listening and changing at the right pace to get your fifty percent advantage?

Marty Zwilling

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Wednesday, April 22, 2020

10 Keys To Being A Thought Leader Across Social Media

refresh-update-appSuccessful entrepreneurs often start with a “random” idea, but they quickly focus their efforts and follow a “system” to organize their startup and maximize the clout of their activities. Too many entrepreneur “wannabes” never get past the idea stage, or strike out randomly in many directions, hoping that their passion will convince people to follow them and make their business grow.

There are many systems for business out there, but all of them need a way to keep score on progress and impact. If your business is to be a thought leader in the social media world, you need a system of grading how much influence you have online, much like the original Klout score, as explained in the classic book on this subject, “Klout Matters,” by Gina Carr and Terry Brock.

I’m not convinced that maximizing any grading system will maximize your clout in every business, but I do agree that social media must be a part of the system that every entrepreneur needs to implement today to build their business. I especially agree with the ten strategies that these authors outline for building systems leading to businesses with clout in today’s world:

  1. Clearly define your purpose. You have to clearly understand what you want to achieve before you are likely to achieve it. If you can’t write it down, you probably don’t understand it. Key factors gating your success will always be your level of competency in your chosen field, level of demand for that skill, and how easily you can be replaced.
  1. Find those arenas where your needs are met. If you want to be a thought leader, find where your potential followers hang out. If you have something to sell, build relationships in the community of buyers. Experimentation is an important part of this process. You will need to test groups constantly to make sure you are in the right one.
  1. Allocate some time to spend on social media. Social media is critical today to almost every business. But make sure the time you spend is quality time, focused on your objectives, and balanced in relation to all your other business requirements. Spend time learning new techniques, and time measuring the return from your efforts.
  1. Be a great resource for others. What we all need is trusted advisors who can help us decipher the clutter. As you become an expert in your field, you need to offer yourself as a trusted advisor, and you will quickly gain a loyal following. Writing, audios, and videos are all great ways to do this, since these all facilitate the one-to-many multiplier.
  1. Provide a unique point of view. Be creative and add value to what you offer your target market. This is true for thought leaders, entrepreneurs, as well as anyone who is looking to be hired in a job. Adding value builds influence and subsequently can build your business, as well as your Klout score. People don’t follow followers or repeaters.
  1. Continue to learn and grow. One of the most important skills that every leader must nurture is how to learn. Some people learn best from conferences, while other learn best from blogs and other information online. Standing still is falling behind, and you can’t afford to fall behind in today’s fast paced business environment.
  1. Forget the old “spray and pray.” A popular old marketing concept was that if you did enough broadcasting of your message to enough people, you would find success. Today you need to talk with, not at, your customers and constituents to get ideas. The best thought leaders have learned how to listen and acknowledge their community.
  1. Build a team. Operating alone in today’s complex business world, including the many social media channels, is not physically possible as your business grows. The good news is that with new technology and the Internet, you can tap into the services of, and build relationships with brilliant people around the world, to build an integrated virtual team.
  1. Seek exposure to new people who are relevant. People come and go in the real world and on social media. Thus it is important that you continually expand your network to engage new people who are building influence in your community. Only in this way will you be exposed to new thoughts and ideas, and enhance your own digital influence.
  1. Focus on a specific niche. You need to find a niche where you have both passion and competency. More passion is not a substitute for focus and competency. Make sure the niche is large enough, and includes people with money, enough to provide an income for you to continue your efforts and be successful.

Influence is more important than ever in today’s connected world as brands, companies, and individuals vie to become the next big phenomenon. Do you have any idea how much influence your company commands today, and what is your business doing to extend that influence to the bottom line?

Marty Zwilling

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Monday, April 20, 2020

5 Keys to Results in the Current Marketing Revolution

marketing-revolutionMost small businesses I advise still rely on traditional advertising models, assuming they can create enough media “noise” to get customers attention and sway them. You don’t realize that person-to-person noise now dominates all channels through social media, effectively hiding business marketing messages. You now need a personal context in your marketing to get results.

For example, the company GoPro makes cameras, yet now rarely ever talks about cameras in its marketing. Instead, it publishes actual customer “Photos of the Day,” highlighting the customer’s thrill of adventure purpose. This cuts through the competitor marketing noise, as well as social media messages and creates deeper, more contextual customer relationships.

The challenges of traditional marketing, and the key elements of the new marketing approach are highlighted well in the new book, “The Context Marketing Revolution,” by Mathew Sweezey, who has lived in both of these worlds as Director of Marketing Strategy for Salesforce. He points out, and I agree, that people now look for experiences rather than noise or product features:

  1. An experience must be available in the moment. Rather than just reaching the largest number of people possible, the new context marketing must aim to make a single, human-to-human connection at the most opportune moment for the customer. People have to feel they found it on their own, rather than thinking that it was forced on them.

    For example, the brand Oreo implemented automated “listening” for relevant words in customer social media posts, and automatically “liked” the post and sometimes wrote a friendly comment to the author of the post. These engagements well accepted by all.

  2. People more readily engage with things they have asked for. This is technically called “permissioned,” and it comes in two forms: implicit and explicit. Implicit permission occurs when an individual contacts your brand first, such as through a Google search. Explicit permission involves an overt action, such as following, friending, or subscribing.

    Even without direct contact or pinpointing an individual name, brands can use targeted demographic data from other sources to suggest that the person on your website right now is forty-five, ready to engage, and looking to buy an SUV in the next sixty days.

  3. Tailor your brand experience to the individual person. The personal element encompasses every effort you make to tailor your brand experience to an individual person. This may result from customers providing personal data, to an experience that enlists your employees, fans, and advocates to become your platoon of brand extenders.

    Starbucks personalizes its brand experience through its free mobile app, which integrates the brand’s rewards system with the ability to customize and order drinks. It then makes use of information, such as purchase history and location, to get as personal as possible.

  4. Make the experience genuine, original, and authentic. This usually boils down to satisfying an expectation: Is the experience using the right voice? Is it empathic with the audience? Are consumers seeing a brand experience congruent with the media channel they are using. Your brand experience must deliver on all three of these measures.

    Besides getting the voce right and communication empathy for your audience, delivering an authentic brand experience means aligning it with the media channel where people expect to find it. Don’t make the mistake of publishing the same content on all channels.

  5. Converse on topics of purpose, not just products or service. Purposeful experiences range from corporate social responsibility to themes motivating customers to engage and participate in a shared activity, such as an event or a food drive. These create deeper, more contextual customer relationships, and incent customers to spread your message.

    Patagonia, maker of outdoor clothing for decades, was one of the first brands to win big by putting a “save the environment purpose” first. Founder Yvon Chouinard has said that making a profit is not the goal, but profits happen "when you do everything else right.”

Even if the traditional marketing models still seem to be working for you, remember that the world out there is changing fast. Thus I recommend that it’s time for you to proactively rethink your model, along the lines of the five initiatives outlined here, for this demand-attention era, before the market flags you as irrelevant. Brands can lose their luster quickly, and are a lot harder to rebuild.

Marty Zwilling

*** First published on Inc.com on 04/06/2020 ***

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Sunday, April 19, 2020

10 Keys To Enabling Your Startup For Unicorn Growth

nature-silhouette-unicornInvestors will tell you that they love to put money into startups that are scalable, and ready to become the next unicorn. But what does that really mean? Simply stated, it means that your business has the potential to multiply revenue with minimal incremental cost. Ready to scale is when you have a proven product and a proven business model, about to expand to new geographies and markets.

A software product is a classic example of a scalable solution, since it costs real money to build the first copy, but unlimited additional copies can be quickly cloned for almost no incremental cost. Most consulting services, like marketing, are not scalable, since they must be delivered by experts, and cloning experts is slow and expensive. Investors don’t invest in services startups.

Here are some pragmatic tips on how to make your startup more scalable and investable:

  1. If you need investors, start with a scalable idea. Just because all your buddies think an idea is cool, that doesn’t mean it is scalable. Investors like ideas based on market research from outside experts, like Gartner Research, proclaiming a billion dollar opportunity with a double digit growth rate. These are more likely scalable and investable.
  1. Build a business plan and model that is attractive to investors. I see too many business plans that are really product plans for customers, touting free services and long feature lists. It’s hard to build and scale a business on free high-support products. Scalable businesses have high margins (over 50%), low support, and minimum staffs.
  1. Use a minimum viable product (MVP) to validate the model. No product, even with a large opportunity, is ready to scale until you can show it working, with multiple customers paying the full price, to validate the business model. Count on multiple pivots with real customers, before you get it right, before you ask for investor money to scale.
  1. Build a strong team to take yourself out of the critical path. If you are still spending most of your time working “in” your business, rather than “on” your business, then you are not yet ready to scale. Show that you have and can continue to hire the right people to run the scaled business without you being everywhere and making every decision.
  1. Outsource what is non-strategic to optimize leverage. Smart entrepreneurs never outsource their core competency, and never rely on intellectual property they don’t own. They also don’t try to do everything in-house, since growing all the expertise you need is slow and expensive. Scaling requires leveraging outside resources.
  1. Focus on marketing and indirect channels to get the message out quickly. Direct marketing is generally not scalable, especially on low-cost high-volume products. These days, heavy marketing is always required to make your startup visible and scalable amid the flood of information from all sources to all customers. Word-of-mouth does not scale.
  1. Automate to the max. A startup that is labor intensive and staff intensive is not scalable. Start early looking at production automation, proven process technologies, and minimum staff approaches, before you begin scaling. Document processes and build online training videos so new people can come online quickly and consistently.
  1. Attract and relish investor funding. Organic growth (reinvesting profits only) will not allow you to build the “hockey stick” growth curve desired by premium buyers at exit, or financial analysts positioning you for public stock sale. You will give up some control with investors, but their expertise and experience is usually more than worth the cost.
  1. Consider all possibilities for licensing and franchising. Many markets already have major players, so figuring out how to make them partners is much more effective for scaling than trying to out-market them. In other areas, once you have a documented and proven model, franchising will let you scale much faster than managing every location.
  1. Define a business that is open-ended and continuously improving. If your startup sounds like a one-trick pony, it won’t be perceived as scalable. Don’t try to solve every customer problem at the same time, but build a strategy and plan that shows continuous innovation, leading to follow-on complementary solutions well into the future.

Let me make one thing clear – not everyone needs or wants investors, or a highly scalable business. Ninety percent of small businesses today are family businesses, which can be very successful, satisfying, and small by design. It’s a strategic decision. If your passion is to change the world, or even dominate an industry, scalability is the only way to multiply your arms and legs, and the hours in your day. Are you feeling the need yet in your own startup?

Marty Zwilling

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Saturday, April 18, 2020

10 Stumbling Blocks To Innovative Business Thinking

creativity-stumbling-blocksSuccessful entrepreneurs are the ones who think the most creatively, not only in their initial product or service, but more importantly all through the stages of growth from startup to maturity. But even the best of them can easily slip into some bad decision habits that limit or hurt their business, due to natural human tendencies and the pressures of business challenges.

Obviously, the business of business has been around a long time, with many “best practices” well-defined and well documented, so creativity that ignores these is usually not a good thing. Thus every entrepreneur struggles to achieve that balance between methodically following “proven” processes, versus a new and creative approach which may be a real differentiator.

In my experience as a mentor, I find that keeping creative thinking in the balance is a challenge for every startup, due to the natural employee tendency to resist change. I agree with the classic book by Ros Taylor, “Creativity at Work: Supercharge Your Brain and Make Your Ideas Stick,” which outlines some key psychological impediments to creative business thinking and change:

  1. Just use the data metrics. Shocking statistics, like unexpected losses last quarter, can generate a knee-jerk cost cutting decision, when further analysis and creative thinking might better close the gap with new revenue sources. Using data metrics alone for decisions, without seeking the root problem and alternative solutions, kills creativity.
  1. Let’s just be optimistic. Optimism is essential for long-term success, but it can delay or cloud short-term decision requirements. Entrepreneurs have to be careful not to look too hard for evidence that confirms their passion and positive perspective. Be a realist when making a decision and an optimist when implanting it.
  1. The way we do things. It’s human nature to believe that the way we have first learned and long done things is the best way, and other ways won’t work as well. It stops us from having to learn anything new. One of the reasons change is hard is that people have to unlearn the old way first, which is twice as hard as just learning something new.
  1. Tricked by recency. We tend to remember the first and the last things we hear – the primacy and recency effect. Sales people tend to remember the latest product when selling to clients, not the one best for that customer. So when decisions are to be made, we tend to remember recent information and issues. Not always to good effect.
  1. Group think will give the best results. Group results are often dominated by an autocratic leader, or represent assimilation of the lowest common denominator. Most people tend to be compliant, rather than risk conflict. Creative ideas are the outliers, and tend to be eliminated first, rather than evaluated fully. Diversity challenges group think.
  1. Low appetite for risk. With humans as well as with animals, you tend to get what you reward. If you reward ‘right first time behavior,’ you might get fewer mistakes but you will also get fewer attempts at trying new things. ‘Fast failure’ and ‘minimum viable product’ are startup concepts geared to facilitate creativity while still mitigating risk.
  1. Polarized thinking. Early failures tend to swing later decisions entirely in the opposite direction, which can have equally traumatic results. Some people tend to manage challenges with “either/or” thinking, rather than creative “both/and” thinking to try to solve the problem. If there are polar opposites, look for the positives on both ends.
  1. Generate more stress. The more critical a problem becomes, the less creative our decision making will be. Concentration is impaired by stress, judgment and logical thinking deteriorates, we tend not to communicate well, we tend to stop gathering data, and we tend to make quick, impulsive, short-term decisions. Work on reducing stress.
  1. No feedback or results analysis. Every decision needs review and continuous feedback from constituents for validation and tuning. In the world of business today, the only constant is change. Even good decisions today will require adjustments as the environment or customers change. Avoid the tendency to fix blame and look for excuses.
  1. Failure to learn. Experience is inevitable; learning is not. Review and measuring decision results facilitates learning, just like sales metrics facilitate a better understanding of sales. Creativity without learning will be short-lived and ineffective. Learning required effective listening, and creative thinking to make sense out of tough experiences.

It’s time to get past the myths and mystery about creativity. Creative people don’t have to have eccentric personalities, work in the arts, or work in isolation, to achieve results. It is possible to be creative on demand, and to demand creativity in your startup. In fact, if you don’t, your startup will too quickly join the ranks of the corporate world that you love to hate. Think about that one.

Marty Zwilling

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Friday, April 17, 2020

7 Winning Business Writing Pointers For Entrepreneurs

hands-write-pen-businessEven in this age of videos and text messages, the quickest way to kill your startup dream with investors, business partners, or even customers, is embarrassingly poor writing. Being very visible in the startup community, I still get an amazing number of badly written emails, rambling executive summaries, and business plans with one paragraph per chapter.

In the competitive realm of business, you only get one chance to make a great first impression. You have to be able to communicate effectively in all the common forms, including business writing, as well as talking, presenting, and producing videos. Lack of the requisite skills or discipline will get you branded as a poor business risk before the message is even considered.

Business writing is not a skill that anyone is born with, but one that everyone can learn. Since we all lose when an entrepreneur with a great idea is held back by a failure to communicate, I would like to offer a quick summary of business writing basic strategies. Keep these in mind as you look for others to join you in supporting your idea to change the world:

  1. Get to the point in the first sentence. In this age of data overload, everyone has learned to tune out if they can’t quickly decipher a relevant purpose and focus for your message. That context needs to be set before your sales pitch or background story makes any sense. Before you start, make sure you understand your own objective.
  1. Plan the message flow to a logical conclusion. Random thoughts or lists of facts do not constitute effective business writing. Most commonly, your message is informational or meant to persuade, so every element should be consistent with that intent. Always include the key document elements of an opening, main body, and a conclusion.
  1. Key points should be highlighted and positive. Action items should be underlined, or separated into bullets to provide visual recognition in a quick scan. Positive messages have more impact, so keep negative and emotional statements to a minimum. Avoid flowery language and excessive use of adjectives. Tight wording clarifies the message.
  1. End with a clear call to action. If you are looking for an investor, a partner, or a customer, make sure the next step is clearly stated, and not just implied. Contact information should always be included. Ending with “May I ask for an hour on your schedule next week to discuss details?” is better than “Don’t miss this opportunity.”
  1. Talk uniquely to each recipient. Generic messages aimed at groups of people do not make a good first impression, especially if the greeting is non-specific and email is directed to a long list of addresses. Smart business people tailor their conversations to each recipient, and the same consideration should be applied to written messages.
  1. Use professional formatting. A badly formatted document, in all caps, mixed fonts, or all one paragraph will destroy even the best message. If you are asking for a million dollars, don’t send your message in smartphone or texting shorthand, ignoring spelling errors. Show your recipients professional respect, and you will get respect in return.
  1. Keep your writing voice friendly and courteous. If your writing tone is angry, cynical, or arrogant, don’t expect any reader to be open to what you have to say. Tune your use of language to the reading level of the recipient or below. Trying to impress or intimidate the reader with technical terms or acronyms doesn’t work with confident professionals.

As a general rule, text messages or emails from a smartphone should never be used for business purposes with someone you don’t know well. Emails are acceptable, if kept to one page, with minimal attachments, addressed to a single recipient, with a relevant subject line, and professionally formatted.

If the business criticality is high, or the subject is sensitive or easily misinterpreted, skip the written communication entirely, in favor of a phone discussion or a personal meeting. Written communication can never convey emotions and body language effectively, which may be fifty percent or more of the message.

Every entrepreneur needs to remember that they are selling themselves in every written communication, even more than they are selling their idea or funding request. Poor use of the writing technology generally available, including formatting tools and spell checkers, will be read as an inconsiderate or risky partnership. You can’t afford that competitive disadvantage.

Martin Zwilling

*** See Azerbaijanian translation, thanks to Amir Abbasov ***

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Wednesday, April 15, 2020

6 Habits to Become a More Empathetic Business Leader

business-leader-officeIn my experience as a business and entrepreneur advisor over many years, I’m convinced that the days of the “command and control” business leader are gone. Your employees have higher expectations of you than just defining their job – they want inspiration, motivation, and purpose. They respond with trust and commitment if they sense empathy for their needs and feelings.

A premier example of the “old-school” command-and-control leadership was Jack Welch in his leadership at GE. He measured you totally by your results in growing the business, and eliminated the lower performers without empathy. This is in stark contrast with the leadership style practiced by respected leaders today, including Jeff Bezos and Howard Schultz.

I found many of the principles of the new leadership style outlined well in a new book, “Cracking the Leadership Code,” by Alain Hunkins, who has spent his career working with leaders in large companies, as well as small, studying the practices and skills that work best today. I support his recommendations on demonstrating empathy, by developing new habits, including the following:

  1. Seek understanding by listening rather than talking. The feeling of being listened to is a fast track to connection. With connection you get commitment and trust, and active following. You will also be surprised by what you can learn by offering employees your complete and undivided attention, and listening without interrupting or checking out.

    According to another great student of leadership, Stephen R. Covey, “Most people do not listen with the intent to understand; they listen with the intent to reply." They're either speaking or preparing to speak. Your challenge is to break that paradigm and listen.

  2. Be more open to new ideas, feelings, and experiences. Start by being open with yourself – are you a leader who tends to control, drive your own agenda, and hide your feelings from others? The new you, over time, will be able to tune into the real needs and strengths of the people around you, enhancing both your productivity as well as theirs.

    Although Jeff Bezos, founder of Amazon, is most certainly an idea guy himself, he attributes much success to being open to the ideas of his team. Even if he doesn't agree that an idea will work, he'll say so, but that doesn't necessarily mean he will shut it down.

  3. Cultivate curiosity as a means of getting more engaged. Empathic leaders are not hesitant to ask “why,” perhaps over and over, to gain more insight and get you both out of your comfort zone. This leads to new learning, focus on the real challenge at hand, and commitment to results that will be satisfying and effective for both of you.

    Elon Musk has been ranked the most inspirational leaders in tech, primarily because of his insatiable curiosity across multiple realms, including all-electric vehicles, space, and brain-machine interfaces. He gathers the experts around him and learns from them.

  4. Practice building empathy by engaging with strangers. This will help you improve the quality of all your conversations, and help you build relationships with team members. Recognized leadership today is more about your ability to work with people, than how many facts you know. Use networking events are an opportunity to practice empathy.

  5. Break existing habit patterns to see people in a new way. When you stop going through the motions and embrace novelty, your sense of connection to people, places, things, and events will be heightened. Your team will respond to you in kind, making your leadership more compelling, and their commitment to results more satisfying.

    For example, some executives I know assume that the reason that they have been put in charge is that they are smarter than everyone else. Thus when it comes to strategy, solving problems, or resolving issues, they see no need in involving anyone else.

  6. Build empathy by spending time in another person’s shoes. Ask others to show you how they work, and create opportunities to ride along or shadow them in their jobs. Be sure to use these as opportunities to learn and build relationships, not as a spy. Watch your previously held assumptions melt away, and your empathy for their role go up.

Changing the perspective on empathy from those you lead won’t happen overnight. It’s a process of establishing or rebuilding your image and your credibility. Overall, to be perceived as a strong leader today, a good connection has to be followed by great communication and collaboration. The challenge is a tough one, but the leverage of a good leader is worth it. Start today.

Marty Zwilling

*** First published on Inc.com on 03/30/2020 ***

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Monday, April 13, 2020

6 Realities To Evaluate Your Outsourcing Alternatives

hire-me-contractorIf you have a software development background like mine, I’m sure you often get questions about when to outsource, versus building the solution in-house. The same applies to manufacturing and almost any process these days. Outsourcing is defined as contracting the work to another company, usually located in a developing country, like India, China, or Eastern Europe.

This alternative has been around for several decades, with the generally accepted advantage of reducing costs. Recently, I’ve seen a lot of discussion about bringing the work back home, since costs have gone up in less-developed countries, there are issues with intellectual property, and time zone and language differences make management difficult.

In reality, the considerations haven’t changed all that much over the years, and are worth repeating for those of you who haven’t previously faced this decision. So before you decide to move your manufacturing, software development, or call center out of town, make sure you understand the following considerations:

  1. Don’t give someone else control of your competitive advantage. If your software or your manufacturing process is your “secret sauce,” you need to keep the work in-house. Saving cost won’t help you if you can’t make the daily innovations required to stay competitive. Let someone else do the ancillary processes where you have no economies of scale, like accounting and support.
  1. Keep intellectual property keys in-house. Despite some recent advances, there are still some cultures which have less regard for patents and other intellectual property. For example, it is no secret that software pirating is still very common in China, Vietnam, and other cultures. Don’t count on contracts and non-disclosure agreements to save you.
  1. Don’t let leading edge become bleeding edge. Leading edge technology software and manufacturing require constant course corrections and iterative restarts. These can’t happen with outsourcing, without long time delays and excessive rework. Results on commodities, including mature software maintenance, adapt well to low-cost contracting.
  1. Factor in all the cost elements. It’s easy to find companies in certain countries that will quote cost reductions up to 75 percent. Your challenge is to factor in the right additional costs for these deals including contract negotiation, increased project management, and extensive travel. Apparent cost reductions can quickly evaporate into increased costs.
  1. Look at internal services versus external services. Customer-facing services, like call centers, should rarely be outsourced. You can’t isolate your customers from language idiosyncrasies and culture issues, per reduced customer engagement highlighted a while back by the The Globe and Mail. Internal services, like marketing and accounting, are more manageable and have less customer visibility.
  1. Focus on operational processes, rather than innovative new ones. It’s hard to write a detailed specification on an evolving new service, process, or product that embodies your core competency. Don’t expect a contract company, either offshore, onshore, or near-shore, to implement a vision that is still in your head. You need to capture the learning in your own team from the evolution.

In any case, before you select a specific outsourcing or contract alternative, there is no substitute for doing thorough due diligence. Visit the contract location, investigate their skill level, training, and quality of their facilities. Spend time building relationships, ask for referrals, and follow up. Make sure the chemistry, values, and culture of the owners is compatible with yours.

After the contract is signed, make sure that both you and they have strong project management skills in place to prevent scope creep, incomplete specifications, and lack of acceptance criteria. If you are a typical startup operation, consisting of an unpaid founder and co-founder, both working part-time, outsourcing is not likely the solution to your resource constraints.

Overall, I believe the utility for outsourcing is going up, rather than going away. The world is becoming a smaller place, and more homogeneous. Startups are often distributed entities, so adding and managing freelancers, contractors, and outsourcing firms is not a big step. But customers are not looking yet another homogeneous product or service, so be careful.

Marty Zwilling

*** See Azerbaijanian translation, thanks to Amir Abbasov

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Sunday, April 12, 2020

6 Ways To Doom Your Startup Despite A Great Solution

sorry-closed-sign-doorAs an entrepreneur mentor and startup investor, I see with sadness the 50 to 90 percent that fail. If you ask them for a reason, most will insist that they couldn’t get funding, or they ran out of money too early. But I’m not convinced that it’s as simple as that. Many are just not facing the reality that their passion had a critical business flaw.

As I was contemplating a classic book “Dead Companies Walking,” by Scott Fearon, who runs a hedge fund that profits from businesses headed toward bankruptcy, I realized that his insights on the common ways that mature companies often doom themselves apply equally well to startups. Every business, young or old, needs to avoid the following six mistakes that he outlines:

  1. Anticipating success based on the recent past. This fallacy, often called historical myopia, essentially involves extrapolating only from recent positive events, and ignoring the reality that markets saturate or evaporate. With the success of Facebook and Twitter, I still see new social media startups almost every day, with most destined to fail.
  1. Relying on an old formula for success. The fallacy of formulas that “can’t fail,” and holding on to troubled ventures, is alive and well in startups. It’s tempting to believe that one more new platform will win for crowd funding or video games, like Indiegogo and Wii. Actually, great new customer solutions lead to great platforms, not the other way around.
  1. Extrapolating you as the target customer. Never mix up what you like with what your customers will buy. Just because you would have loved to have your groceries picked out and delivered, doesn’t mean the mainstream customer was ready for Webvan in 1999. Or ask PlanetRx, an online service for prescriptions, before the Internet was pervasive.
  1. Falling victim to a magical mania or bubble. Perhaps the most famous bubble for startups was the dot.com craze that crashed 15 years ago, where the highest valuations were given to companies with massive user growth, but minimal revenue or profit. This one may be back, and due for another crash. See point #1 or watch history repeat.
  1. Failing to adapt to tectonic shifts in the market. Blockbuster failed to recognize that their industry had fundamentally and permanently changed, and even NetFlix has struggles with the same issue, as video streaming takes over. Things happen fast these days, so don’t get caught re-arranging deck chairs on the Titanic. Fail fast and pivot.
  1. Physically or emotionally moving yourself above the business. More than one smart entrepreneur has been caught in the lofty lifestyle of big money investors, viral growth, and movie star status. Startups can go down many times faster than they go up. Just ask MySpace, eToys, and Pets.com. Never take your eye off the ball in business.

Of course, there are many other common reasons for startup failure, including inexperienced teams, inadequate marketing, no intellectual property, business model doesn’t work, or just giving up too early. Every startup is a step into the unknown, making it a higher risk of failure, so there is no room for complacency or assumption.

In reality, failure is not a bad thing. In a healthy economy, capital markets and discriminating customers fuel growth and new ventures by handsomely rewarding well-executed ideas, and ruthlessly starving out even long-running ventures that refuse to adapt and innovate. A smart entrepreneur learns to embrace failure as a badge of learning that provides a competitive edge.

The lesson here is that even the most promising startups and experienced teams can be misled by sticking with business models that worked in the past, and market opportunities that may no longer exist. While there should be no stigma for failure, there is no joy in being a dead business walking. The quicker you heed these messages, the sooner you will be able to enjoy and celebrate the entrepreneur lifestyle.

Marty Zwilling

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Saturday, April 11, 2020

6 Reasons Why More Is Not Better In Your Next Startup

Bicycle_multi-toolMany passionate entrepreneurs fight to add more features into their new products and services, assuming that more function will make the solution more appealing to more customers. In reality, more features will more likely make the product confusing and less usable to all. Focus is the art of limiting your scope to the key function that really matters for the majority of customers.

YouTube did it with videos, Instagram did it with photos, and Amazon did it with books. Many of the business plans I have seen as an investor, like trying to integrate all the social media features of Facebook, Twitter, and LinkedIn into a new platform, don’t do it. Of course, once you have a brand and more resources, it can pay to expand your book selling to a full e-commerce site.

In fact, there are a host of reasons why a non-focused startup business is more likely to struggle for survival, lose market and investor attention, and miss out on the opportunity to capitalize on their scope:

  1. Time to market is tied to the size of your offering. In many business domains today, the market seems to change about every ninety days. With the current low cost of entry, nimble competitors appear quickly and seize the high ground of your existing customers and potential. No startup can implement a broad strategy quickly enough to stay ahead.
  1. Broad product offerings require too much infrastructure. More money is hard to find, and building efficient multiple processes is even harder. Every aspect of every product requires development, testing, manufacturing, marketing, and distribution. The probability of failure goes up exponentially as the number of product features increase.
  1. It’s tough for an elephant to be agile. Every successful startup I know has pivoted a couple of times, as they learn what really works in the marketplace and in the sales process. Did you know that both YouTube and Facebook started out to be dating sites? Even IBM, with their personal computer, had trouble making their elephant dance.
  1. Ongoing market leadership requires continuous innovation. The initial larger cost in time and dollars is only the beginning. The first-to-market advantage doesn’t last long. You need continuous innovation in all elements of your product line to stay ahead, or your startup will be quickly left in the dust.
  1. Marketing a product with too many features is self-defeating. It’s almost impossible to craft a memorable message that has more than three bullets. The more you try to capitalize on the breadth and depth of your solution, the more people don’t get the message at all, and settle for a competitor that focuses on their personal hot-button.
  1. Your personal bandwidth is quickly exceeded. When your solution has too many elements, even you can’t keep the priorities straight, and your team gets frustrated, tired, loses motivation, and tends to not do anything well. As a new entrepreneur in a new startup, it’s better to walk before you try to run.

At the same time, focusing on the wrong things is equally destructive and unproductive. In some environments product focus is not the most important element. Perhaps the focus should be on a single distribution channel, better customer service, or a simplified pricing structure. In all cases, hiring the best people is likely more important than adding a few features to your solution.

Thus the first and top focus for every entrepreneur should be on strategy. The strategy needs to be simple, written down, and communicated regularly to the entire team. A simple test is to see if you can quickly name your top three priorities, and if every team member is able to respond quickly with the same three. Too many strategy elements generate lots of work, but few results.

The final focus should be on emphasizing strengths and measuring success, rather than on solving the crisis of the moment and eliminating weaknesses. Only by focusing on the right elements of market, product, business, and people, can you really hope to win. Bigger is not necessarily better. Be the best in your chosen niche and you can change the world.

Marty Zwilling

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Friday, April 10, 2020

10 Keys To Results With Social-Local-Mobile Marketing

digital-marketingThe world of marketing is changing faster than technology these days. Winning entrepreneurs have long since supplemented conventional print and video “push” marketing with digital online interactive “pull” marketing, and a while back added social-local-mobile (SoLoMo) to the mix. Mobile and global are driving all of these in innovative new ways to grow your business.

For all those entrepreneurs and startups who can’t yet afford a new age marketing agency, it’s impossible to keep up with “best of breed” marketing activities and strategies. I found some help in catching up via a classic book “Sell Local, Think Global,” by marketing message expert Olga Mizrahi. Along with her insights, she offers 50 innovative new tips to grow your business.

I’ve paraphrased here a subset of her guidance which I believe characterizes the key changes and the implications for entrepreneurs just starting, as well as more mature businesses:

  1. Pinpoint your Unique Value Proposition (UVP). These days it is often more about being unique than being valuable. A UVP sells a product or service because it differentiates it from other products or services that are available. Skip the better, faster, or stronger; you need to be the best, fastest, or strongest to truly stand out.
  1. Reach your target audience intimately through interaction. Target marketing has moved to a whole new level both geographically and demographically. With social media, you can interact more precisely and create custom products and marketing to be almost all things to all people. The broad-brush push-marketing is no longer competitive.
  1. Build word-of-mouth into your product or service. The very best marketing is word-of-mouth from your very happy customers. You need to give them something to talk about and incentives to be brand ambassadors. These include an aura of exclusivity and cultivating an “under-the-radar” vibe that pushes people into one-up-style revelations.

  1. Proactively seek out win-win alliances. Voluntary open-ended alliances are more important than ever, and easier than ever. Consider collaborating via shared marketing efforts, trade-show both space, co-branding promotional products, referral agreements, and cross-linking web sites. With informality, these must be win-win relationships.

  1. Modernize the user website experience. The standards for user-friendly continue to move up. Make sure your users don’t have to think, and participating in your call to action is intuitive and organic. Modern web layouts flow smoothly and quickly for an easier to read, satisfying experience. How many website visits have you aborted in frustration?
  1. Incorporate live chat into every online service. No one wants to call an 800 help line anymore. Online shoppers like online chat, because it makes the experience more like in-store shopping. The same applies to other aspects of consumer experience: customer questions answered, problems fixed, and aggravations soothed, to close more sales.
  1. Understand the power of online reviews to your advantage. Stop fearing bad reviews, and see any review as an opportunity and an asset. Respond to reviews to give a personable picture of you, your company, and your products. People want to go with tried-and-true choices, and many positive reviews will offset that occasional negative one.

  1. Optimize how you website looks on mobile devices. Mobile will soon be the number one way people do web browsing, as it already is for e-mail. Yet nearly half of all small businesses still lack any website, much less a mobile-friendly one. Modern websites adapt to the mobile environment, or you can provide a separate mobile site at low cost.
  1. See the world through the eyes of Generation Z. The newest generation has never lived life unplugged, and their blend of innocence, simplicity, and pure excitement appeals to every customer. Optimize for them, and you will be a winner today, as well as in the future. It starts with a willingness to engage, listen, and learn without fear.
  1. Embrace giving back to the world community. Bring new awareness to your business by promoting a higher goal, which will garner additional respect and new business from your supporters. The first steps are effective communication to your clients, employee participation, and partnering with other organizations that have similar initiatives.

If you are not happy with how fast your business is growing, pick one of these areas to focus on first, then a second and third. Don’t try to do everything at once, and don’t expect that you can do it once and forget about it. Your business is a living entity, just like you are. Treat it with ongoing respect and attention, or the growth you expect and deserve will fade as the world changes.

Marty Zwilling

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Wednesday, April 8, 2020

6 Practices Guaranteed To Raise Workforce Engagement

achievement-agreement-arms-asianWhether you are an entrepreneur managing a startup, or a corporate executive with thousands of employees, it’s hard to ignore the evidence of big value from happy employees. According to a classic study from Deloitte, happy employees have been shown to be up to 20 percent more effective in the workplace than unhappy employees, as well as far more loyal and productive.

The challenge is to find the best way to keep everyone on your team happy and productive. Salesforce, which was ranked by Fortune magazine as the world’s best place to work in 2018, keeps the focus on employee happiness through dedicated “mindfulness” rooms, 56 hours of paid volunteer work a year, to $5.5 million in bounties paid out last year for great new hire referrals.

Unfortunately, I suspect that there is no simple formula that will work for all companies. Most experts agree that workplace happiness is hard to find, partially because we as humans are not particularly good at staying happy. Psychologist Ron Friedman, in his classic book “The Best Place To Work,” explores this problem, and I like the summary he offers to maximize your efforts:

  1. Reward frequency is more important than size. Business feedback indicates that smaller frequent positive feedback and rewards will keep people happy longer than a single large infrequent happy event. Even the biggest awards or raises “wear out” in less than a year, with most employees responding better to small doses every few days.
  1. Positive event variety prevents adaptation. People tend to discount events that happen repeatedly, no matter how positive. The value of going away on vacation is that it breaks the routine of everyday life, as well as making you recognize the pleasures of being back home. At work, variety could mean unique events or awards each month.
  1. Unexpected positive experiences deliver a bigger impact. When something surprising happens, our brains automatically pay closer attention, lending these events greater emotional weight. Thus you must make positive surprises more frequent, like special lunches or activities, to override the occasional unavoidable bad news.

  1. New life experiences have more impact than reward objects. Evidence indicates that providing new positive life experiences (for example, a hot-air balloon ride, wine-tasting class, or vacation to Italy) tends to provide a greater happiness boost than spending a comparable amount on material objects (flat-screen television, fancy suit, or purse).

  1. Happiness can be triggered outside of conscious awareness. Relaxing music can lift employee moods unconsciously, as can pleasing scents (nearby bakery, candles, or coffee). Stores and casinos use “aroma marketing” to put customers in positive moods, not for productivity, but to increase their optimism and willingness to spend.
  1. Focus on achievements leads to better job appreciation. Businesses need to spend more effort asking and listening to employee achievements, rather than a continuous focus on what’s broken or not done. Asking about achievements in a group setting encourages recognition of co-workers and gratitude expression, which catches on.

Research also shows that when team members are happy at work, they are better collaborators, work to common goals, and are more innovative. That means it pays to elevate people’s mood at the start of a team effort by using refreshments, good news, or an interactive activity. The trick is to promote a mindset that benefits the activities that you are asking them to undertake.

Managers and executives should never confuse recognition events and group lunches with unproductive time. All interactions that bring employees together in a positive way extend productivity in the long run. In a similar vein, don’t confuse people presence with productivity. Productive employees are the ones who are passionate, focused, and excited to be there.

Believe it or not, it is possible for employees in business, as well as entrepreneurs, to be both happy and productive. As a business, happy employees lead to success, more than success leads to happiness. If you want to emulate Salesforce’s success as a great place to work, and as a successful company, maybe it’s time to think more like they do about employee happiness.

Marty Zwilling

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Monday, April 6, 2020

5 Common Startup Setbacks And How To Rebound Stronger

town-sign-plan-bMost entrepreneurs are so convinced that they are the disruptive element, they fail to anticipate that unknown facts or events can and will occur to disrupt their own well-laid plans. While it’s true that there is no way of know specifically what might happen, you need to anticipate the worst, and actually build a Plan B. People who haven’t thought about a Plan B often don’t survive the shock.

In my years of mentoring and working with startups, I’ve seen and read about some amazing disruptions, as well as recoveries, and I’m sure each of you could add your own. For example, you probably didn’t realize that both Facebook and YouTube started out intending to be dating sites, but implemented a Plan B when they found dating had become an over-saturated market.

While thinking about the most common surprises that I have seen with startups, and contemplating how to best prepare for them, I found some good guidance in a classic book, “Think Agile,” by successful entrepreneur and startup advisor Taffy Williams. I will key off his list of situations requiring dramatic plan changes, as well as the best ways to plan for these changes:

  1. Indispensable people jump ship at the worst possible time. The surprise departure of a key staff member is inevitable, no matter how strong the financial and passion incentive. Every entrepreneur needs a succession plan early on the top three people, with a reshuffle and replacement strategy. Get to know your headhunter or freelancer.
  1. Your rollout timetable suffers a big setback. You can’t predict big quality problems, funding shortfalls, and viral events that don’t work. You can and should create realistic time ranges around deadlines, and work up “what if” scenarios around your milestones. Don’t succumb to blind optimism, or pressure from investors to go for broke.
  1. A new market opportunity emerges which you can’t ignore. It’s not just undesirable circumstances that require big plan changes. Natural disasters or economic conditions can create new markets, or an offer to partner or merge may materialize suddenly. The agile way to respond is to research for flaws in the opportunity, and test the waters first.
  1. Your biggest or only customer dumps you. This can happen through no fault of your own, or rapid market erosion you didn’t foresee. Your Plan B should always include a diversification plan you can implement quickly, as well as an emergency “right-sizing” plan to weather the gap to some new customers or services.
  1. Another disruptive technology trumps yours. What seemed like a winning technology, like RIM with its Blackberry, can quickly be superseded by a new entrant, such as the iPhone from Apple. Every startup needs to build and monitor their list of top competitive risks, and size the cost of a quick direction shift if the worst case happens.

Each of these initiatives has to be led by an entrepreneur who is willing to manage with an open mind, not only during the formative stages of the business, but also during the growth stages. Most entrepreneurs start losing their agility with that first taste of success. The best ones are often viewed as paranoid, since they proactively look for problems well after the first success.

One of the best ways to increase agility is to focus on specific problems and drive them to resolution, rather than instinctively flailing through several problems at the same time at a high level, hoping that one of your many actions will stick. Scientists have shown that the best creative problem-solving consists of these five-steps:

  1. Learn as much as possible personally about the problem.
  2. Engage a qualified and diverse team, staff, and advisors.
  3. Document the ultimate goal, so people can work backward as well as forward.
  4. Ramp up communication to bring in outliers and spark fresh thinking.
  5. Step back for a while to let the creative juices flow before making a decision.

These are turbulent times, as well as time for great opportunities, for the entrepreneurs that are agile, innovative, and open to change. Don’t get stuck in the past, or let some early success lead you to competitive lethargy or crippling indecisiveness. Those are the diseases of too many big business executives. You didn’t decide to be an entrepreneur to be like them.


Marty Zwilling

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Sunday, April 5, 2020

6 Ways Gossiping Leads To A Toxic Workplace Culture

secret-gossiping-lips-to-earAs an entrepreneur, you should treat gossip among the members of your team as a reduction in productivity at best, and at worst, an indication of unhappy, un-empowered, or non-collaborative employees. As a leader, you should be asking yourself if you are the problem, and working hard to improve the situation before it gets out of hand, causing lost clients as well as lost productivity.

Occasionally I see articles, like this one from Monster.com, that claim gossip in the workplace can be beneficial in getting unspoken information out in the open for leaders to see, or it allows people to release pent-up negative energy before it explodes. Good gossip, as opposed to the malicious kind, some argue, might promote camaraderie and accountability on the team.

I personally think that good gossip is an oxymoron, since most dictionary definitions agree that the essence of gossip is sharing personal details about others that are not confirmed as being true. In any case, it behooves every entrepreneur and business leader to keep their antennas up for an increase in gossip, and know how to address the problem without causing more.

I recently saw some good insights on this challenge in the classic book “The 15 Commitments of Conscious Leadership,” by Jim Dethmer, Diana Chapman, and Kaley Warner Klemp. They concur with me that gossiping is a key indicator of an unhealthy organizational culture, and one of the fastest ways to derail creativity. They summarized the following key motivators for gossiping:

  1. Make others appear wrong. Many team members relate to others on the team from a one-up or one-down position: They see each person’s position as either less than or more than their own. Gossip is a way to engage in one-upmanship, relieving them from feeling inferior. It allows people to twist reality to make others wrong so they can be right.
  1. Gain validation for a personal view. People’s egos live in a world where they are either right or wrong. Since they don’t want to be wrong, gossip allows them the opportunity to validate their righteous perspective. Gossip provides the vehicle to bounce off our thoughts with friends and associates to gain validation and support.
  1. Control others not under their authority. By gossiping, team members feed their judgments to others, manipulating the information flow and attempting to control the beliefs and behaviors of others. This is often driven by fear of their real persuasive ability, or lack of confidence in the organizational hierarchy or decision making process.
  1. Get more individual attention. Absent something meaningful to share with others, team members may choose to reveal a critical or private story about someone else to keep some attention on themselves. Unfortunately, spreading gossip or rumors is like buying attention; it’s temporary and has little foundation.
  1. Divert attention from possible weakness. When someone feels vulnerable, gossip is a great way to shift potential negative attention to someone else. For example, team members may gossip about the personal lives of their boss or business leaders to highlight faults, making their own faults less significant.
  1. Avoid face-to-face negotiation and conflict. A popular reason for gossiping in teams is a concern that direct opinions or preferences are going to upset someone. Thus they vent to people not directly related to the issue, such as friends and other team members, somehow hoping that will get the message across with having to confront anyone.

Gossip doesn’t work without a willing listener, so agreeing to listen is really as contributory as speaking it. Team members who refuse to listen will kill gossiping as effectively as no speakers. The authors agree with me in observing that candor and authentic expression of feelings and facts are more effective in communication and maintaining the health of the organization.

The only way to really clean up gossiping is to reveal both the gossiper and the listener to each other, to the person about whom they have been gossiping, and to clearly delineate the relevant business facts from the stories. People who refuse to change need to be removed from the team before they destroy it.

Every business needs creative energy and collaboration to survive in today’s competitive environment, and these are undermined wherever gossip is present. It only gets worse if you pretend you don’t hear it.

Marty Zwilling

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Saturday, April 4, 2020

5 Keys To The Startup Mindset Required For Breakthrus

startup-disruption-mindsetAs an entrepreneur advisor, I am surprised at how often I hear the same or very similar proposals of an incremental innovation to an existing process, versus a really new or breakthrough solution. If you are seriously looking to start the next billion-dollar startup, you need to get beyond the realm of enhancing a current solution. Investors are looking for breakthrough solutions to fund.

For example, I often hear proposals for new online social media or collaboration platforms, maybe more specifically tuned to inventors or artists, or easier to use, and populated by experts, to compete against Slack or Facebook. What I don’t see often are new solutions that force me to rethink how we work together, or really use AI to make the collaboration process more productive.

Today there are a wealth of disruptive technologies available, including the Internet of Things (IoT), artificial intelligence (AI), advanced virtual reality (VR), and high-function robotics. But we all know that these are not solutions by themselves, but require integration into an innovative framework to solve real customer problems.

That integration is the breakthrough that you should be looking for as an entrepreneur. I believe that creating these solutions is not rocket science, but it does require a mindset that is determined to look beyond what the rest of us can see. Here are some keys to that mindset that I have seen working for successful entrepreneurs:

  1. Think customer-centric rather than technology-centric. Rather than starting from a mindset of pushing the limits of technology, be determined to first find a customer need that can only be solved by the technology you know. Remember that your goal is to build a successful business, and customers are in control of making that happen.

    For example, Zappos led a revolution in online shoes and clothing, not because of any revolutionary shoe technology, but because they sensed a clothing customer obsession for customer service, including long phone conversations and unlimited free returns.

  2. Take a deeper dive into your idea before you declare. High-level ideas rarely make good business solutions. The deeper you dive into an idea, twisting and turning it to find novel ways of linking things together, the more likely you will find something even you haven’t thought of, to make your solution memorable to customers and investors alike.

    One of the ways to do a deeper dive into validating your solution is to build a campaign on a popular crowdfunding platform, like Kickstarter. From the work and feedback, you will learn much on how your solution will fare with customers, before building the product

  3. Tap expert sources in other domains for ideas. Many aspiring entrepreneurs are too paranoid to share ideas and learn what they need to turn an idea into a disruptive customer solution. Actively solicit insights from outside domain experts, and follow-up to expand your thinking relative to your own domain. Be forever curious and optimistic.

    Elon Musk, for example, admits to reading up to two books per day in various disciplines, including physics, engineering, product design, business, technology, and energy, to give him insights on new solutions and new opportunities, despite his large portfolio already.

  4. Build a prototype and experiment with real customers. I often hear entrepreneurs talking about ideas they have been honing in their head for years, or even a decade. Even years ago good entrepreneurs, like Thomas Edison, admitted they learned more from building mock-ups and prototypes, than from gut instincts and theory.

    Edison was famous for prototyping, staying positive, and never giving up on his electric light bulb ideas. He is quoted as saying, “I have not failed. I've just found 10,000 ways that won't work.” He never talked about a solution until he had a working model.

  5. Nurture advocates and partners with complementary skills. Mentors and advocates will keep you focused and positive, and will develop your ability to speak to investors and customers with authenticity, credibility and confidence. Assimilate a team with the range of skills you need in your business, including development, operations, and marketing.

Even Google co-founders, Larry Page and Sergey Brin, while they had each other, and some advanced degrees from Stanford, still benefited from the help from other stars in business, including Eric Schmidt, Andy Bechtolsheim, and billionaire Ram Shriram.

If you are new to the entrepreneur lifestyle, it’s probably good to start with an idea that is an incremental innovation, to get your feet on the ground, and understand how the funding and business creation process works. But let me assure you, the real joy, satisfaction, and full potential comes from breakthroughs that change the world. Try that mindset next time!

Marty Zwilling

*** First published on Inc.com on 03/19/2020 ***

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