Wednesday, September 22, 2021

7 Ways To Highlight Your Personal Value To Investors

personal-value-to-investorsUnfortunately, most of us don’t have enough resources to bootstrap our own startups, so we are completely dependent on investors to help turn great ideas into great businesses. Yet in my experience on both sides of this equation, I find that many aspiring entrepreneurs focus only on the best idea, assuming that it will attract the right investors. In reality, that’s only half the story.

The other half is you. You need to work just as hard to convince investors that you are the best person to take your idea from a dream to a successful business, and provide an impressive return on their investment at the same time. Here are some key strategies that I have seen to enhance your position as an attractive investment opportunity, independent of your idea:

  1. Highlight a greater sense of purpose than making money. Of course, you need to show how your business will make money and provide an impressive investor return, but that should be only the beginning. Emphasize your real ambition to change the world, through helping the underprivileged, improving healthcare, or saving the environment.

    For example, Blake Mycoskie of TOMS Shoes attributes his ability to raise a seed round and build a $400M company to his commitment to provide a free pair of shoes to the underprivileged for every pair sold. He didn’t have any big technical shoe innovations.

  2. Develop a personal story as a visionary and learner. Investors love entrepreneurs who come across as constantly on the lookout for new ideas, and able to grasp the larger implications for market change. Your story should include childhood initiatives, industry organization leadership roles, and online influencer organizations that you support.

    Many of his original investors still remember when Facebook founder Mark Zuckerberg first related his personal challenge to only eat meat that he killed himself, in an effort to learn sustainable farming and consume resources responsibly. His campaign only lasted a year, but it convinced some that he was a potential visionary and a constant learner.

  3. Show that you love change, but understand reality. Above all, good business people have to remain practical, not be perfectionists, and be able to get the job done. That means you need to show examples of your ability to get results, when all around you are bogged down on details, or unable to face the harsh challenges of the real world.

  4. Offer an attractive and viable investment equation. As you may have seen on the Shark Tank TV show, offering a tiny equity amount for a large investment will not endear you to investors. They need to believe your valuation, based on current revenue and intellectual property, and feel the equity offered gives them a real return for the risk.

  5. Display real commitment to a plan, with milestones. Passion and confidence are a good start, but every investor wants to see a credible plan, with specific milestones along the way. These show a focus on the business elements required for success, and metrics for ensuring accountability, management control, and feedback along the way.

  6. Emphasize the value and skills of your team. Founders who present themselves as a lone entrepreneur may develop an innovative solution, but building a business requires a team. You need to show that you have a powerful team, and can attract and lead people with strong skills complimentary to yours for marketing, finance, sales, and operations.

  7. Demonstrate flexibility, resilience, and determination. Smart investors know that no matter how certain you are that your solution is right, you will probably need to pivot at least once as you learn from the marketplace. You need to show you have a “Plan B,” and a never-give-up mindset, in handling any competitive threat or customer reaction.

The message here is that it is just as important to develop and communicate your personal innovative strengths as it is to pitch your solution’s innovative features. As an investor, I have seen many great ideas fail by the wrong entrepreneur, and other less grandiose ones sail to success by world-class entrepreneurs. Never underestimate the power of you.

Marty Zwilling

*** First published on Inc.com on 09/09/2021 ***

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Monday, September 20, 2021

8 Advantages To Building Your Own Startup Prototypes

Meet_Up_MakerspaceBack in the early 2000s, the Maker Movement took hold in California, based on the emergence of such do-it-yourself (DIY) tools as 3-D printers, and now sites such as SketchUp and Makerspaces have all the tools you need to make almost anything computer related. Thus entrepreneurs were able to build prototypes and design new products without the traditional huge prototyping cost.

The movement has long since spread across the country and across the globe, spawning innovative products such as the MakerBot Digitizer and all the things you can access from Thingiverse.com. Events for enthusiasts, formerly called Maker Faires, now stretch across the USA and into many other countries. They have also become great networking events for meeting other like-minded entrepreneurs.

I believe the Maker Movement and hardware startups with limited resources are made for each other. Here are some key positives from an entrepreneur perspective:

  1. Shorten the time and cost from idea to prototype. In today’s fast moving market, the basic product development cost and time are critical to survival. They come at the early stage while a startup has no revenue or valuation, so professional investors are hard to find. Low-cost design and fabrication tools are extremely valuable.
  1. Place to build skills and become familiar with new tools. Makerspaces, sometimes called hackerspaces, have sites and events, including tutorials, where people with common interests can meet, socialize and collaborate. With the new rapid prototyping tools, products can be physically built for analysis, rather than just conceptualized.
  1. Network with potential cofounders and strategic partners. Relationships are best built while working and learning together, rather than over drinks at a mixer or industry conference. There are already more than 1500 active hackerspaces worldwide, with info on Hackerspaces. Countless startup teams have already been spawned from these.

  1. Opportunity to meet investors and support organizations. Venture capitalists and investors are where the action is, to see first-hand what is possible, and who are the leaders. Makerspaces are becoming the new incubators and accelerators for startups, and support contacts, like lawyers and marketing groups, will be easy to find.

  1. Open your mind to new entrepreneurial opportunities. With low-cost digital design and fabrication tools, such as 3D printing and the ability to digitize almost any object, bold new innovations become apparent. Very young entrepreneurs get to “touch and feel” the results, and can experiment to their heart’s content. These ideas can grow quickly into real products.

  1. Meet the new consumer demand for customization. Customers today increasingly demand solutions that are customized just for them. Hobbyists and craftsmen have made custom solutions for a very long time, but companies have resisted this requirement to keep costs down. Maker tools are changing these economies of scale.

  1. Accelerate the trend to higher purpose startups. The new do-it-yourself capabilities and low entry costs mean that you don’t have be a Bill Gates to offer solutions that have an impact on society. The Maker Movement is already poised to transform learning in our schools, and offer low-cost solutions to solve environmental and third-world problems.
  1. Diversity breeds success. By collaborating with the Maker Movement, artistic entrepreneurs work with the technology freaks, and both benefit from other cultures around the world. New products emerge, as diverse as networked-art installations, Internet-of-Things innovations, and many other hybrid software-hardware solutions.

Makers are becoming real entrepreneurs, rather than just hobbyists and inventors. The new shared culture emphasizes learning-through-doing in a social environment, as well as fun and self-fulfillment. Have you tried it yet?

Marty Zwilling

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Sunday, September 19, 2021

8 Brand Strategy Rules From Elite Consumer Companies

Starbucks_CoffeeEvery new business dreams of becoming the premier brand in their space, like Starbucks is to coffee, and Apple is to consumer electronics, but they have no idea how difficult that is to achieve. In fact, only 100 of the 10,000 multimillion-dollar consumer companies around the world can claim to be an “apostle brand” – one that inspires enduring trust, loyalty, and endorsement.

One of the reasons it’s so tough is that the rules are constantly changing on what it takes to win over customers, as customer attitudes and cultures change, and competitors continually strive to “raise the bar” on product and support. I found some eye-opening insights in the classic book, “Rocket: Eight Lessons to Secure Infinite Growth,” by The Boston Consulting Group.

They outline the new rules for existing brands, but I believe that every entrepreneur who doesn’t yet have a brand yet should study these carefully, as paraphrased for startups below. It’s a lot harder to recover from brand missteps made early, than it is to get is right the first time, so build your brand strategy accordingly:

  1. Don’t ask your customers what they want next. The challenge of every startup is finding that balance between solving a real problem today, and giving customers the courage to make a leap forward. Existing customers can’t envision a new concept, or new behaviors. You have to excite their imagination, then show them the new world.

  1. Turn your biggest fans into apostle customers. Your first satisfied customers define your voice in the marketplace. They see your strengths, weaknesses, and opportunities. If you listen to them and respond, they will become your best apostles, delivering on average eight times their own value in new customers. That’s a winning growth trajectory.
  1. Always welcome a customer’s scorn as a gift. Even in a new startup organization, it’s easy to become convinced that a percentage of unhappy customers is normal. Instead of scorn and dismissal, a comprehensive and deliberate response is the key to brand growth and vitality. Without the feedback, no change in the demand space will be noted.
  1. People still judge a book by its cover. Consumers shop with their eyes, just like they eat with their eyes. Target all the senses all the time. Shame on you if you offer any product or service that is dull or unattractive. Steve Jobs was a master at this. Visual appearance and core values matter. Make your team as well as your customers proud.
  1. Transform your employees into passionate disciples. A highly motivated front line engages customers and tells your story with passion. They are your greatest resource for generating new apostles and a cultural advantage. The result is higher repeat purchases and sales without promotion. Loyalty in the ranks creates loyalty in the customer.
  1. Ramp up your virtual and real relationships. The digital age is making virtual relationships with customers indistinguishable from real relationships. It’s a lot easier and faster to grow virtual relationships, and they are both real for online purchases. Your startup needs to use blogs and social media to establish interactive relationships early.
  1. Take giant leaps rather than timid steps. It’s hard to really change the world with incremental advances and consolidation. Be clear and vibrant in your claims and in your deeds, or you will never get noticed in the flood of messages we have to deal with every day. Startups have the advantage in starting with a dream and no feet stuck in the past.
  1. Don’t ever assume that your brand is stable. All relationships are in a constant state of flux, so don’t assume your customer relationships will remain stable. At any moment, your brand will be lifted high or knocked down low by cultural changes or external events. It’s up to you to track the data, recognize a change early, and intervene proactively.

The overall goal of these eight new rules is to help your startup forge the tightest possible emotional connection with the most customers in the shortest amount of time. These customer advocates lead to more love, loyalty, advocacy, and the exponential growth of an enduring brand. It’s the only way to make your startup the next Starbucks.

Marty Zwilling

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Saturday, September 18, 2021

7 Most Effective Routines Of Notable Business Leaders

Stephen_Covey_(author)In my years of working with entrepreneurs, I have heard many times the promise that their new idea will create the next Amazon or Apple, but I rarely hear the more important promise that the founder will practice all the good habits of winning entrepreneurs like Jeff Bezos and Steve Jobs. You see, I’m convinced that the entrepreneur makes the company, not the other way around.

This seemingly radical concept of people making all the difference in business has been around for a long time, perhaps most visibly in the classic book “The 7 Habits of Highly Effective People,” first published by Stephen R. Covey over 25 years ago. Yet I still see most of the focus in the startup community on creating the best technology and process, rather than practicing the most effective habits.

In that context, I’d like to restate and amplify in business terms the top attributes that I believe every entrepreneur should aspire and commit to, consistent with the seven most effective habits detailed by Covey many years ago:

  1. Be proactive and take the initiative. Being proactive in a new business means starting with a vision of how to do things better, rather than following someone else’s success model. We have enough social network startups. Enlarge your circle of influence, and manage risk as an opportunity, not a negative. Keep commitments, with no excuses.
  1. Make personal life goals drive the business. Begin with the end in mind - your definition of success based on your principles. You won’t be effective centering your life around someone else’s view of success, satisfaction, and happiness. Make sure you have a personal mission statement before you try to define one for your new business.
  1. Willing to work on the business as well as in the business. Many entrepreneurs, especially technologists, relish building the product, and assume the business will build itself. Effective entrepreneurs always put first things first, expect needs to change, and manage with discipline. That means knowing when to delegate, enlist help, and say no.
  1. Strive for win-win relationships and agreements. Successful startups are more about stakeholder win-win relationships than win-lose with competitors and vendors. In the same way, win-win performance agreements make for effective team members, partners, and investors. Win-win puts the responsibility on the entrepreneur to deliver results.
  1. Seek first to understand, then be understood. Communication is one of the most important skills in business. With today’s interactive social media, there is no reason to assume that you know what customers want, or they know what you have. Collect their view and communicate. Don’t be an entrepreneur with a solution looking for a problem.
  1. Build synergistic business relationships. Valuing the differences is the essence of synergy – the physical, mental, and emotional differences that might be used as stepping stones to new business and win-win opportunities. Different points of view, even healthy conflict, is the key to innovative solutions and timely required change.
  1. Practice continuous learning and self-renewal. Renewal is the principle and the process that empowers entrepreneurs to move through an upward spiral of growth, change, and continuous improvement. This is often called sharpening the saw. It facilitates learning, committing, and doing business on an increasingly higher plane.

For many entrepreneurs adopting these habits is a paradigm shift, as challenging as the one from technologist to business professional, but it can be done and has been done by every successful entrepreneur. In addition, the power of a paradigm shift is that it opens up a new level of thinking, and a new level of power. It’s a great new asset, often more important than new funding.

Remember that investors continue to see thousands of e-commerce and computer startups, but only a few new entrepreneurs like Jeff Bezos and Steve Jobs. If you already have the effective habits I have outlined here, make those part of the story you lead with. If you don’t have them yet, now is the time to start.

Marty Zwilling

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Friday, September 17, 2021

9 Messages From Sales Training May Save Your Startup

sales-training-lessonsMost aspiring entrepreneurs believe that a great idea alone will assure business success. Experts argue that it’s more important to have a great plan, and personal business acumen. Hardly anyone mentions selling principles. Yet in this age when customers have a thousand alternatives, and are overwhelmed by a multitude of messages, sales efforts can make or break a business.

In fact, I believe modern entrepreneurs need to be super sales people, in the most positive sense, to their team as well as customers. I recently found the classic sales training book “Bootstrap Selling The Sandler Way,” by Bill Morrison, who has 20 years in sales leadership roles, and I was amazed at how many of his sales lessons are great lessons for new entrepreneurs as well.

Based on my many years of watching entrepreneurs struggle and too often fail, here are some of his key lessons for dedicated sales professionals that every entrepreneur should take to heart:

  1. Focus on what customers want to buy, not what you want to sell. You can either find customers for your solution or you can find solutions for your customers. The smart answer is to find solutions your customers need. Putting all your effort into driving your favorite solution can lead to forgetting the problem being addressed in the first place.

  1. Your first idea about where pain resides is nearly always wrong. Smart founders and smart salesmen look for customers with a painful problem, rather than pushing a nice-to-have solution. No pain usually means no sales. Then every startup has to learn to pivot, because their first understanding of the real problem is usually not quite right.
  1. Your price and their value are not the same thing. Entrepreneurs set the price of their solution based on their costs, and their perception of value. Customers set value based on similar products found. For example, with smartphone apps, most are free. Thus, no matter what your value, it’s hard to build an app business that makes money today.
  1. You and the customer have to be on the same side. Too many entrepreneurs, especially ones with work-at-home schemes and multi-level marketing, believe that someone has to lose to help them win. Like many salespeople, they see themselves as hunters. With the best solutions, the customer gets value which exceeds your revenue.
  1. You are not the servant of your customer. At the same time, every customer isn’t always right. Entrepreneurs need to be customer advocates, but not a slave to their every whim. Businesses must part quickly with low-profit or abusive customers to focus on those who deliver greater return, and appreciate the value their solution provides.
  1. Proactively look for problems, rather than react only. In every new business, as in every sales territory, problems happen. Reacting to a customer crisis is always more expensive to recover, than to view a problem brewing, and head it off with proper actions. That mentality has to be part of the culture of every startup team member from the start.
  1. Make the tough decision rather than no decision. It’s easy for entrepreneurs to postpone decisions in tough situations, in favor of more study. Yet a startup image can be destroyed more quickly than a big auto company, by not taking action on a customer problem today. Sales people alike, who won’t face their fears, lose in the long run.

  1. Telling isn’t selling. Having a snappy presentation on your solution or startup is great, but it’s only half the battle. Entrepreneurs need to actively listen to customers, investors, and other constituents, just like sales people need to listen before they talk. Push marketing doesn’t work well today, in the age of interactive networking and peer reviews.
  1. People buy from people and companies they like. Entrepreneurs who fail to invest in establishing rapport with their customers will suffer the same consequences as sales people who don’t put themselves in the shoes of their prospects. Through social media and customer interaction, you must convince customers that your culture matches theirs.

Morrison espouses a selling success triangle of good techniques, behavior, and attitude, to turn prospecting opportunities into business success and personal value. Again, these same attributes are equally relevant for an entrepreneur turning an idea into a business. So before you conclude that your technology alone will catapult you to riches, take a success lesson from some super sales people who have learned the hard way.

Marty Zwilling

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Wednesday, September 15, 2021

7 Advantages For Being A Socially Responsible Startup

Socially-responsible-startupMore entrepreneurs want to be socially responsible these days, but fear a negative impact on profits, growth, and the ability to find an investor. In the short run, there are real costs associated with the “triple bottom line” of maximizing profit, people (social), and planet (environment). But very quickly, it is becoming obvious to startups that the value and satisfaction exceeds the costs.

To legally facilitate startups who want to give top priority to socially conscious solutions, thirty-five states, starting with Maryland way back in 2010, have passed legislation allowing incorporation as a Benefit Corporation (B-Corp). The B-Corp status is meant to reduce investor suits, and gives consumers an easy way to spot genuine social commitment, without assuming it is a non-profit.

There are currently over 3,500 Certified B Corporations in more than 70 countries. I believe this option will continue to spread to other companies, states and countries. A few examples of well-known benefit corporations in the USA include Kickstarter, Etsy in New York, Patagonia in California, and Seventh Generation in Vermont.

Even without B-Corp status, entrepreneurs are speaking out more on the positives to support business models that benefit not just shareholders, but customers, workforce, the environment, and the greater community. Several good discussions take a whole chapter in the classic book “Mind Your Business: Thoughts for Entrepreneurs,” by international entrepreneur Toine Knipping:

  1. Investors favor startups that integrate social responsibility. Investors believe these startups demonstrate more integrity and less risk, as well as being better positioned to deliver long-term, sustainable value to their stakeholders. Of course, investors still require a profitable business model, and the potential for high returns.
  1. Startups can use social responsibility as a competitive advantage. Some customers and stakeholders don’t just prefer that an organization is socially responsible, but insist on dealing only with these startups. That’s a real competitive edge that you can use in your marketing and positioning.
  1. Socially responsible products typically sell at a premium price. The anecdotal evidence is growing that consumers are willing to pay a premium for sustainability, and have started to demand a discount for ‘un-sustainability.’ More startups are using this strategy to improve their profitability, and reduce financial risk.
  1. Social responsibility opens the door to a broader customer base. By adding to perceived value, it can attract more sophisticated and demanding customers less expensively and more quickly. More and more customers choose a company based on their perceptions about the good that they do, as well as the price and service.
  1. Customer loyalty is highest for socially conscious startups. Even way back in the recession, the Edelman Good Purpose study found that 68 percent of global consumers would remain loyal to a brand if the organization practiced social responsibility. We all know the cost of retaining customers is far less than the cost of new customers.

  1. Being socially responsible improves organizational performance. Doing business is a human process. Team members interact on a daily basis with the stakeholders of the startup and the way they feel about the organization has a major and direct impact on how they perform their tasks and do their job at the end of the day.
  1. It is easier to recruit and retain human capital. Employees tend to stay longer with the organization, reducing the costs of recruitment and retraining. This leads to better performance as employees become specialized in their tasks and experienced, but they are also more motivated to give back to the organization and ultimately, more productive.

More and more, the goodwill of the relevant customer community, in large measure, contributes to the success of any product and any company. For some business opportunities, like Facebook and Twitter, the community is the value.

Unfortunately, balancing social and environmental impact against making money for survival and investor return isn’t an easy equation. In the long-run, what your business actually does is what counts. Are you ready for the challenge ahead?

Marty Zwilling

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Monday, September 13, 2021

5 Keys To The Survival And Success Of An Entrepreneur

Resilience_cycleYou can’t survive as an entrepreneur without resilience, because you are going to fail at least once, maybe multiple times. That’s the nature of trying something that’s never been done before. Resilience means not giving up, and being energized by what you have learned. As Thomas Edison said, "I have not failed. I have just found ten thousand ways that won't work."

If you need more evidence that great entrepreneurs survived through resilience, just look into the backgrounds of more recent entrepreneurs like Steve Jobs, Bill Gates, and Elon Musk. They all experienced multiple setbacks along the way, but they persevered to become some of the most well known and respected entrepreneurs of our time.

In a classic book on the subject, “Stronger: Develop the Resilience You Need to Succeed,” by George Everly, Douglas Strouse, and Dennis McCormack, these experts on the subject of human behavior and resilience outline five key factors of personal resilience, which I believe every aspiring entrepreneur should understand and develop before initiating a startup:

  1. Maintain active optimism. Optimism is the mindset to expect the best outcome from every situation. This gives entrepreneurs the capacity to pivot from a failing tactic, and implement actions to increase success. The key to building active optimism is observing how others were successful in similar situations, and believing you can do the same.
  1. Courage to take decisive action. Decisiveness mitigates adversity, helps you rebound, take responsibility, and promotes growth. Building decisiveness requires eliminating fear, procrastination, and the urge to please everyone. Practice making decisions as a positive learning experience. Understand that any decision is usually better than no decision.
  1. Let a good moral compass guide you. We all need a guiding light when adversity strikes. The four points of honesty, integrity, fidelity, and ethical behavior work best in business and personal life. Solidify your moral compass by setting virtuous goals, keying off the norm of inspiring peers, practicing self-control, and celebrating every successes.
  1. Show relentless tenacity and determination. Decide that giving up is simply not an option. Learn that tenacity is self-sustaining when persevering actions are rewarded. Find tenacious role models, and garner the support of peers and friends. Great entrepreneurs become tenaciously defiant when told they cannot succeed. Then they get it done.
  1. Gain strength from the support of others. Interpersonal support is believed to be the single best driver of human resilience. In business, this means that the people you surround yourself with are crucial – team members, advisors, investors, partners, and peers. Avoid toxic people like the plague. Practice active listening and show appreciation.

Very few entrepreneurs are born with the resilience needed. Yet, it is something any startup founder can acquire as an advantage in the ever-more-competitive business world. A good part of it is fighting the urge to revert back to our comfort zones, and fall back into old habits. From the pain of failure comes wisdom, from fear comes courage, and from struggling comes strength.

Resilience also comes from paying attention to your own needs and feelings. Entrepreneurs need to engage in outside activities that they enjoy and find relaxing, to keep their body and mind fit to deal with the unending challenges of every business. In addition, it’s important to have a higher level purpose in life, such as insanely great design, to guide your resolve and your decisions.

The Steve Jobs story of resilience is a classic example of a higher purpose, woven into the five factors above, ultimately leading to success. His elegant design decisions may have failed him initially at Apple, but he went on to hone them at NeXT and Pixar, and finally won his legacy by coming back to Apple with winning innovative designs for the iMac, iPod, iPhone, and iPad.

Steve never gave up, and that’s the essence of resilience. That’s what I look for as an angel investor in entrepreneurs, and that’s what everyone looks for in a leader. What have you done lately to build and demonstrate your resilience?

Marty Zwilling

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Sunday, September 12, 2021

7 Scenarios Where A Business Plan Is Still An Asset

business-plan-puzzle-piecesAs a startup mentor and investor, I am approached regularly by aspiring entrepreneurs who assert that business plans take too much time, are inaccurate, and rarely add value. They cite sources like Profitable Venture Magazine, “Why Business Plans are a Waste of Time” and this Forbes article. From my perspective, much of this advice is urban legend and just plain wrong.

Based on my experience, a business plan always adds value to the entrepreneur – most people can’t build a complete plan in their head, and need the process of organizing it on paper to make it consistent and complete. The size of the document should be based on your style, but 10-20 pages or slides are usually more than adequate to outline even a complex business.

Beyond the value to the entrepreneur, let’s take a look at how and when a written plan might add value, or even be required, by other people who may be critical to the success of your startup efforts. Most of these scenarios involve attracting outside investors, strategic partners, or key team members:

  1. You are the team and you don’t need outside funding. Tiny bootstrapped teams usually don’t have a business plan, and probably don’t need one. They can iterate and evolve their business idea with a low burn rate and minimal dependencies. A formal plan will only add value after they finalize a model, build a team, and are ready to scale.
  1. You’ve built a successful startup before, and plan to use the same investors. If you have a proven track record, investors don’t have to see a written plan to believe you can do the job. In fact, they are probably in such a hurry to give you money that they don’t want you to waste time writing anything down and passing it along to new investors.
  1. You need funding, and plan to get it from friends and family. Hopefully you know your friends and family better than I do, so you decide when a business plan is required. If your rich uncle is an accountant, or has his own business, I recommend a good business plan. On the other hand, your mother probably won’t read one.

  1. You need money, and plan to do crowdfunding. Although the major crowd funding sites today, including Kickstarter and Indiegogo, don’t technically require a business plan, they do demand essentially the same information in a project format. Thus building a business plan ahead of time will improve your application and chances of success.

  1. You need an investor, and want a document to mass-mail to everyone. Creating a business plan for this purpose is a waste of time. In fact, the whole process is a waste of time. Most VCs and Angel investors don’t read unsolicited proposals, unless they have met you first, or have a glowing recommendation from another investor or acquaintance.
  1. You need an investor, and want to solicit professionals online. Major platforms are available online to find Angel groups or VCs, including Gust and AngelList. These platforms, and every investor who uses them to find entrepreneurs, expects to find a good business plan posted. You won’t even be considered without a business plan.
  1. You find an interested investor or bank, and need to close the deal. Most professional investors, even if they like your story, and were properly introduced by a friend, will ask for a business plan at the due diligence stage. They want to see if you have done your homework, have reasonable expectations, and are willing to commit.

You might fairly conclude from these points that a business plan is only “required” if you want to close funding from professional investors who don’t already know you or know your track record. Since the best VCs deal primarily with known and proven entrepreneurs, it’s easy for them to say that they don’t read business plans.

On the other hand, don’t forget angel investors, who fund a large number of startups, to the tune of $25 billion last year, who start their search primarily from platforms like the ones mentioned above. A business plan may be a small investment to get a shot at that opportunity.

For the rest of you entrepreneurs, consider the value of a business plan when it is not required. Clemson University professor William B. Gartner looked at data a while back from the Panal Study of Entrepreneurial Dynamics, and found that writing a plan increased the chances by two and a half times that a person would actually go into business.

Of course, building a plan is not an alternative to getting out there and doing something. There is no substitute for knowing your customers first hand, and iterating on a minimum viable product to find the most marketable solution. Writing it down promotes both understanding and commitment.

Overall, I sense that not writing a business plan is more often an excuse rather than a time saver. Building a business is a long-term non-trivial task, like building a house. Would you give money to someone, without a plan, who had never built a house before? Hopefully you wouldn’t even build your own house without a plan. You should treat your new business with the same respect.

Marty Zwilling

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Saturday, September 11, 2021

7 Ways To Preclude The Most Common Investor Rejection

car-fast-wheel-rearAlmost every early-stage startup who has approached investors for funding has heard the innocuous sounding rejection “I love your idea, but come back when you have more traction.” What does traction really mean to investors, and how much is enough? Let me try to clarify the rules, and what it takes to win at this game.

First of all, a definition. Traction is evidence that your product or service has started that “hockey- stick” adoption rate which implies a large market, a valid business model, and sustainable growth. Investors want evidence that the “dogs are eating the dog food,” and your financial projections are not just a dream.

Obviously this definition is generic, so my first recommendation is that you take the lead in defining traction metrics for your startup, and then selling your results convincingly to investors. A graph that shows a hockey-stick “up and to the right” curve with at least three data points per key indicator is a great visual assist.

One or more of the following parameters are viewed by most investors as traction indicators, but good entrepreneurs are often creative and define their own to supplement these:

  1. Start with sales to-date for a priced offering. As an investor, I would like to see one month of sales, and see how that compares to your projections. One customer is not traction, and beta tests with a thousand customers at no cost don’t count. Your graph should show that sales have “turned upward” per projections, beyond friends and family.
  1. Free and freemium products need a solid base. If your product is free, with advertising revenue from click-throughs, you need a sign-up rate and page-view rate that approaches one million page views per month. I like to see at least 10,000 active users, or a user base, page-views, or mobile downloads that double every three months.
  1. Market penetration. Percentages may be difficult at this early stage, but you need to get creative about slicing and dicing the market, sector, demographic, and sub-categories. For example, if your value-add is with first-time parents, show me a graph of how many 20-30 year-old moms have signed up each week the first month.
  1. Average transaction size and revenue per customer. Often enterprise customers, or even consumers, test a new channel by signing up for a few small transactions or trial products. If your average transaction size, number per customer, or margins have been turning up dramatically, it should mean you have gained real traction in the market.
  1. Customer acquisition cost. In an inverse fashion, real traction usually means that your cost to acquire a new customer is coming down rapidly, as your marketing kicks in, and your offering is known and accepted by the mass market. You need to position these numbers to investors as positive, based on your domain experience, before being asked.
  1. Show acceptance by major customers and key distributors. Sometimes it is not the numbers that indicate traction, but who you have signed up. Signed contracts with big name customers, like IBM, AT&T, or Wal-Mart, is a strong indication of traction. The same is true if your offering has been accepted by major distributors in your industry.
  1. Public statements from industry experts and groups. In the enterprise world, if your offering is even included as a new contender by respected industry groups, like Gartner Research, you should claim traction. In the consumer world, groups like Consumer Reports, will give you similar credibility, if positive. Start early to work these relationships.

You need to take the lead in choosing the key metrics that accurately and positively express, both quantitatively and graphically, that your startup has broken through the traction barrier. Don’t ask investors if you have traction – if you have to ask, you probably won’t like the answer.

But never forget that traction is necessary, but may not be sufficient, to lower the risk perception of investors, and assure an investment. The quality of the team, and overall financial health are equally important, as well as how your offering compares to competitors.

Overall, you should think of traction as that indicator or indicators which demonstrate that your offering has shifted from being an “idea” to being a profit-making “business.” As such, it should be just as important to you as to potential investors. Make sure you understand what it means to you, and communicate where you stand. If investors have to raise the subject first, you don’t have enough traction to win.

Marty Zwilling

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Friday, September 10, 2021

5 Ways To Plan for Business Change Before the Crisis

Change-Start-ArrowBased on my experience as a business advisor, most businesses don’t think about the need for change until a crisis occurs. This might be the recognition that competitors are surpassing your own results, financial growth has disappeared, or the pandemic has eliminated loyal customers. Only then do they begin searching for that one-time fix that will restore their leadership position.

My recommendation is that you plan to pivot your business on a regular basis, at least once a year, even before you see specific negative symptoms indicative of change in the market you thought you knew so well. In my experience, planning for change means creating the right culture in your organization, having a real change process in place, and effective team communication.

Here are some key steps to get the ball rolling if you don’t know where to start:

  1. Establish the mindset that change is good. Because change often leads to crisis, you and your team can easily see it as a negative, and approach it with fear. Yet if you think back to when your business started, you capitalized on change as your opportunity. That’s the model you need to project to your team daily, and remind yourself regularly.

    Many smart business leaders believe that you can actually train your brain to get better at handling change through simple mental exercises, from noticing a few positive changes every day, to learning how to meditate. Change is inevitable, so accept it as the norm.

  2. Keep an open channel to customers and influencers. Running an existing business is an all-consuming job, managing employees, vendors, and government regulations. It’s hard to find time to really study the market for new trends, and listen to customers. The right approach is to allocate time, maybe an hour a day, for these critical change drivers.

    In addition, it is important to stay actively involved in external activities relevant to your business, including industry conferences and panels. Maintain relationships with other industry movers and shakers, including customer support groups and media influencers.

  3. Regularly update and publish your vision and goals. Reminding yourself and the team annually of the big picture is the best way to check your ongoing fit to a changing world. As a constant learner, your reminder will generate new insights that allow you to prepare for the future, without waiting for a crisis. Be sure to factor in the new realities.

    For example, many entrepreneurs have found that adding a goal today of serving a higher purpose attracts new customers as well as improving team commitment. TOMS Shoes now succeeds by providing a free pair of shoes to the needy for every pair sold.

  4. Institute a formal change process with rewards. People must be incented to look for and recommend positive changes, rather than just incented to follow the existing processes. That means providing every employee with the authority and resources to make change decisions in their scope, and be rewarded based on value to the customer.

    Jeff Bezos credits much of Amazon’s continued success to his incenting of regular change “experiments.” He believes that if you double the number of experiments you do per year, you’re going to double your inventiveness, and keep ahead of the market.

  5. Don’t let stress and emotion drive pivot decisions. Make sure that you use data and expert outside advisors, more than your gut, to prioritize the alternatives for a change. Decisions made in the heat of the moment are likely ones you will regret later. For your ongoing personal health and well-being, take the time to do the surveys and review data.

    Another way to raise your logic and decrease your emotional reactivity is by documenting the pros and cons of a potential change. The discipline of reviewing the facts will keep you rational about options, and prevent your emotions from getting the best of you.

Most entrepreneurs recognize that pivots are required to adapt their initial understanding to the real market. Once synchronized, they often forget that change is the only constant in business, and it takes a crisis to remind them. If you can make this acceptance of change a normal part of your business process, I assure you your business life will be more satisfying, as well as fruitful.

Marty Zwilling

*** First published on Inc.com on 08/27/2021 ***

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Wednesday, September 8, 2021

5 Ways To Solve More Problems And Grow Your Business

problem-solution-help-supportAs a long-time business advisor, and an investor in startups along the way, I’m always on the lookout for an entrepreneur who is responding first to a problem in the marketplace, rather than bringing a new technology to the market, assuming it will find a problem to solve. I assert that problem solvers are more likely to succeed, since every business comes with plenty of problems.

I personally love passion and technology, but these alone don’t make a business. If you haven’t yet realized the greater value of a problem solving mentality, I offer the following strategies that I believe should and can be followed by all aspiring entrepreneurs, and existing business owners, to start looking at problems as opportunities, rather than barriers to satisfaction and progress:

  1. Adopt a positive view that problems bring opportunity. People who see problems as negatives to be overcome are doomed to a life of unhappiness. This saps their passion and energy, and limits their thinking and success. The entrepreneurs I respect actively look for the next problem, celebrate every success, and see failures as learning events.

    A few years ago, Safeway and other big retailers struggled with the growing problem of plastic bag cost and pollution, before realizing they could actually sell reusable cloth bags to customers, as a win to all. A recurring expense was turned into a recurring revenue.

  2. Openly acknowledge current challenges in your business. Business leaders who see problems only as a burden tend to hide them from the team, or actually ignore them until a crisis hits. This prevents everyone from fully understanding the context, root cause, and steps to resolve it. The result is missed opportunities, emotional in-fighting, and blame.

    The current pandemic, for example, has been a hit to most businesses, both in terms of servicing customers, as well as protecting employees. The best have openly worked out new processes for both, including work from home, and home delivery or drive-by pickup.

  3. Follow a fixed process to evaluate and resolve problems. Don’t let emotions control your efforts, so first stay calm and focused. Formally define the scope of the problem, followed by documenting the solution alternatives from team members and experts, and a timeframe for solution. Finally, make a timely decision and build an implementation plan.

    One of the most successful entrepreneurs today, Elon Musk, is an outspoken proponent of the First Principle method of evaluating problems, defined long ago by Aristotle. This requires challenging all assumptions and reverting to nature to get a root problem cause.

  4. Avoid perfectionism – no problems have a perfect solution. In my experience, perfectionism is the biggest detriment to solving problems quickly. The search for a perfect solution delays progress, hurts morale, and blinds everyone to practical quick solutions which are good enough. The result is unhappy people, making no progress.

    Steve Jobs, by his own assessment, started out as an adamant perfectionist. With his obsession for detail, it took more than three years to develop the Macintosh. Over time, Jobs managed to temper his perfectionism and succeed in the bigger consumer market.

  5. Tap into the collective intelligence around you. Too many business leaders fear that asking for help will make them look weak. I urge you to take full advantage of business advisors, expertise within your team, and direct communication with customers. They will respect and trust you for sharing, and you will get real insight from different perspectives.

    Building relationships with others, and effective listening, are the keys to utilizing the intelligence around you. Start by walking around and getting to know the other members of your team. Outside connections usually come by taking a more active role in your industry and community. The Internet and social media are also a key knowledge source.

The best part of adopting these strategies is that they can turn some of your most distasteful activities into satisfying ones, and lead to business success rather than failure. You may even decide to reboot your career from one of following someone else’s direction, to following your own dream of entrepreneurship and changing the world. There is no better time than today to start.

Marty Zwilling

*** First published on Inc.com on 08/24/2021 ***

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Monday, September 6, 2021

5 Startup Environments That Can Spiral Out Of Control

spiral-out-of-controlMost entrepreneurs start their company with the highest of ideals, and wouldn’t dream of building one with a culture of indifference or downright unethical behavior. Yet all too many succumb to the pressures of survival, driven by demanding investors or a cutthroat competitive environment. How does a Founder recognize the warning signs, let alone know what to do about it?

Some key insights on this issue are provided for corporate environments in the classic book by David Gebler, “The 3 Power Values: How Commitment, Integrity, and Transparency Clear the Roadblocks to Performance.” I‘m convinced that the underlying points are even more relevant to entrepreneurs, with some adaptation for the realities of the startup world:

  1. A switch to survival mode. When customers don’t appear as fast as the Founder projected, and cash runs short, everyone on the team starts to worry about losing their job. Suddenly “closing the sale,” no matter what is required, takes precedence over the grand team vision of changing the world.

    When a startup team is in survival mode, they need straight talk from leaders they respect and trust. Founders are often tempted to sugarcoat information. If you want employees to stay engaged, tell them the truth, with specifics on what is required to turn things around, and the team will surprise you with their commitment.

  2. Big bad investor interference. Investors provide funding, but they also have their own set of expectations on how things should get done, with aggressive milestones. For the team in the trenches, these pressures can cause tensions to run high, and commitment to high level goals is lost. The culture changes to satisfy the investors at any cost.

    Make your investors part of the visible team at the startup, and make sure all key milestones are well understood up front. Then make sure you communicate regularly to your investors so they don’t get surprised. Investors are people too, and with regular communication, will trust people to do their job, without sacrificing integrity and ethics.

  3. Misunderstood pivots. Virtually every startup has to make real-time changes to their product, plan, or market, as they learn from initial customer interactions. Without proper communication to the team, these changes look like random shifts in direction, which negate the efforts of team members, and raise a cloud of fear and indifference.

    Entrepreneurs must resist the urge to withdraw and isolate themselves as they deal with the pressures of changes to their original plan. Instead, they need to be more transparent, and spend more time listening to the team as well as communicating the value of a pivot.

  4. Troubling talk around the water cooler. In every organization, large or small, there are people who become disillusioned or negative about the current direction or progress, usually due to personal problems. Negative people and messages are a virus that can kill your culture, and cause others to turn a blind eye to the real priorities of the business.

    Leaders need to pick up these negative messages quickly by listening and really engaging with their team, and then dealing with them with integrity. Non-productive complainers need to be moved off the team quickly, or everyone reverts to that level.

  5. Lack of communication from the top. With today’s 24/7 flood of information and social media, the team expects to be constantly updated on what’s going on at the top. When they see the information they need is missing, outdated, or flat-out misrepresented, frustration is inevitable, and this will eat away at your culture.

    Make sure your team knows how decisions are being made, as well as what they are. Be transparent, set goals, and then tell internal and external stakeholders where you are in meeting those goals. Invite employees to join in and contribute to this process.

So commitment, integrity, and transparency are the catalysts that every startup team expects from their leaders to maintain a healthy culture, strong values, and superior results. When a good startup starts to experience slippage on any of these catalysts, the team can slip rapidly into disengagement, rationalization, and self-deception. Have you checked the signs in your organizations lately?

Marty Zwilling

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Sunday, September 5, 2021

10 Keys To The Teamwork Required To Run Your Business

Teamwork-Agreement-BusinessAny entrepreneur with a vision can postulate a new business, but it takes a collaboration of many people to make it a success. Today the complexity of forces required for success include multi-disciplinary skills, competencies, and experiences in which the whole is greater than the sum of the parts. Entrepreneurs who embrace the “lone wolf” approach usually live to regret it.

I remember the classic book, “The Collaboration Imperative,” by Ron Ricci and Carl Wiese, which makes the case very well for why collaboration matters in every business, as well as startups. Every entrepreneur should heed the following lessons on collaboration derived from the authors work on the culture, process and technology of collaboration in hundreds of companies:

  1. Consensus is the enemy of collaboration. Collaboration leaves everyone with a feeling of “win-win,” while consensus is “win-lose” or even “lose-lose.” Collaboration opens more possibilities, while consensus narrows them to a compromise.
  1. Collaboration has to start at the top. Company culture is not set by words, but by the actions of the founder. That means treating everyone with respect, and providing regular constructive feedback. Trust is required for every successful collaboration.
  1. The biggest barriers to collaboration are not technical. They are cultural and organizational in nature. Startup executives need to first build a culture and processes with communication and shared goals, rather than internal competition and bureaucracy.
  1. Collaboration cannot be deployed – it must be embraced. Executives and managers must be willing participants, modeling collaborative behavior and embracing the technology tools, not just taskmasters. All team members must be committed.
  1. Good ideas come from anywhere, so the more voices the better. These are critical in arriving at a clear idea of what is important, exploring what is possible based on constraints, and coordinating effective actions to produce successful outcomes.
  1. Collaboration enhances personal communication skills. As team members interact and play to their strengths, they learn to be authentic and genuine, which increases their effectiveness as well as their skills. They reach agreement faster and communicate more.
  1. You get out of collaboration what you put in. According to a global study of business conducted by Frost & Sullivan, the return on a collaboration investment progressively improves as better tools are deployed and a collaborative culture takes shape.
  1. Collaboration success means changing both roles and rewards. This means creating processes that allow more perspectives, but make it clear who has decision-making rights. It’s essential to provide incentives to change ingrained behavior.
  1. More interaction opens opportunities to create more value. Within any given startup environment (market, industry structure, competitors, product/service mix, etc.) opportunities exist that are often missed unless everyone is listening and communicating.
  1. The average return on collaboration is four times the initial investment. From the study referenced, measured gains ranged from three to six times. This ROI comes from cost avoidance, cost reductions, business optimization, and faster business decisions.

In today’s highly competitive and unpredictable environment, it’s not enough to do one thing better than your competitors. You need to change your organization so that it can rapidly recognize and adapt to new opportunities and new threats.

Collaboration is the new imperative. It may be the only way to accelerate innovation, improve agility, increase adaptability and cut costs all at once. But building a collaborative culture is not an easy transformation for the traditional fiercely independent entrepreneur. How long has it been since you have taken a hard look at your own startup?

Marty Zwilling

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Saturday, September 4, 2021

5 Attributes To Look For In Your Perfect Startup Idea

perfect-startup-ideaEvery entrepreneur wishes that he could predict whether his idea could be the “next big thing,” before he spent his life savings and years of energy on it. Investors, on the other hand, typically don’t even look very hard at the product or service, but prefer to evaluate first the entrepreneur, and secondly the business plan.

I define these products and services as “solutions” (customers buy solutions to a problem), but Guy Kawasaki more generically calls them causes, meaning any new idea, company, or service. Yet we can all agree that the quality of the solution or cause is very important, and there are attributes that reduce the business risk and make it more likely a success in the marketplace.

Many people have tried to outline and refine these important attributes, including Kawasaki in his classic book “Enchantment: The Art of Changing Hearts, Minds, and Actions.” He and I agree that product ideas must be assessed against the following five key qualities:

  1. Depth. A deep product or service has a robust set of features. It means you’ve anticipated what your customers will need as they move up the power curve, For example, Google is a one-stop source for your online needs, ranging from simple search to managing your e-mail, to analyzing your Web site. The selection is incredibly deep.
  1. Intelligence. An intelligent solution solves people’s problems in smart ways. Smart solutions are the ones that look simple in retrospect, don’t require a genius with an instruction manual to use them, and the benefits are easily quantified. In the computer world, the advent of the mouse for interface control and selection was such a product.
  1. Completeness. A complete solution provides a great experience that includes service, support, and a string of enhancements. For example, the Lexus experience is more than the steel, leather, glass, and rubber. After-sales support, comfort, accessories, and brand image are as much a part of owning a Lexus as the car itself.
  1. Empowering ability. An empowering solution enables you to do old things better and to do new things you couldn’t do at all. It increases your confidence and your ability to control your life. This feeling of empowerment is the essence of why young people love their smart phones and often consider their phone an extension of themselves.
  1. Elegance. An elegant solution is not opulent, but embodies creativity and polish, and enhances the user experience. An elegant solution works with people. An inelegant solution fights people. It looks right. It feels right. It works right. And it doesn’t make more work for you. This may be hard to define, but you know it when you see it.

In summary, the best product or service is a full-featured one (deep) that shows you understand customer needs (intelligent), comes with support (complete), makes customers better (empowering), and is easy to use (elegant). As you create your solutions, ask yourself if they are deep, intelligent, complete, empowering and elegant.

Of course, great startup solutions need great teams to implement them. Back to my comment at the beginning that investors evaluate the people before the idea, see one of my original articles for details on “Investors Look First At The Founder, Then The Idea.” The combination of these factors is why a new entrepreneur with his first idea usually has a tough road ahead.

As Guy says, “in a perfect world, you are so enchanting that your cause doesn’t matter, and your cause is so enchanting that you don’t matter.” In the real world, don’t count on either of these cases. You can best help yourself by doing the homework listening to customers and quantifying the pain points before you define a great solution. Then build a team, build a plan, build a great company, and have fun.

Marty Zwilling

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Friday, September 3, 2021

7 Keys To Being An Exceptional Business Leader Today

Tim-Cook-Steve-JobsNot so long ago, business leaders operated behind the scenes, and even long-time employees rarely heard from them or saw them in the news. Today, with the Internet and social media, if you aren’t visible in a positive way to everyone, including customers, your leadership efforts will be lost. To be a leader, you have to be willing to be a public figure, and display the right attributes.

As an advisor to aspiring entrepreneurs, I find that many assume that their passion and their innovative solution will define them as a leader, and customers, as well as team members, will follow them to the ends of the earth, assuring business success. In reality, you may need to focus even more on your image as a leader than on the value of your offering for that to happen.

In my experience, it means it will likely be necessary to supplement your product business plan with some key personal initiatives that define you as a business leader role model for all to see:

  1. Take a visible leadership role in your industry. Allocate time for active participation in relevant outside industry conferences, and public panels or TED talks that look ahead. Online it may be time to take a formal position via blogs and interviews. You need to be visible in marketing efforts, viral videos, and interactions with key customer segments.

    Many people believe that Steve Jobs did not become a recognized business leader until after his return to Apple in 1997, when he became more visible, changed his business style, and focused on communicating the big picture, rather than product development.

  2. Build relationships with known business leaders. The old fable of “you are known by the company you keep” has never been more true. In this age of total access via the Internet, you can’t hide relationships, or the lack of them. Some entrepreneurs I know attempt to retain control, or save money, by eschewing advisors and using stealth mode.

    In the early days of the IBM PC, I had the opportunity to know and work with Bill Gates at Microsoft. I can attest that he was always seeking relationships with other more mature executives, and even today maintains a mentoring relationship with Warren Buffett.

  3. Foster an image of open mind and learn mode. We all believe that an effective leader in this age of change must be constantly open to new insights, always intellectually curious, and in pursuit of wisdom from smart people. The old models of leadership, including autocratic, defensive, and narcissistic, won’t brand you as a leader these days.

  4. Always willing and able to communicate. People won’t follow you if they don’t know where you are going, or why. Make sure you communicate the right message, and use every channel possible, including body language, to make sure the message is understood by everyone. Be transparent, yet positive, about the challenges ahead.

  5. Project and inspire trust and confidence. Everyone has fears and qualms as they are led out of their comfort zone, and into the unknowns of a changing world. You need to be confident and trusted so people will choose to follow you, and you need to make it clear that you have confidence and trust in the people you work with, as well as customers.

  6. Set goals and celebrate progress and results. People measure your leadership by your ability to define aggressive yet reasonable targets, with milestones, and the ability to celebrate progress along the way. That means public recognition of individual achievements, providing feedback, and coaching and mentoring along the way.

  7. Be self-starting and tenacious on key challenges. Every business leader must be the role model for tackling problems and never giving up until they are resolved, without playing the victim, placing blame, or not making a decision. That ability to take on a challenge outside your normal realm is a key to leadership that everyone respects.

While these attributes are critical to being a role model for business leaders today, I recognize that some of you are not comfortable or interested in the visibility and stress implied by this role. That doesn’t mean that you can’t be an entrepreneur today, or feel success and satisfaction from your efforts. It just means that you need to temper your aspirations to fit the real you, and have fun.

Marty Zwilling

*** First published on Inc.com on 08/19/2021 ***

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Wednesday, September 1, 2021

6 Ways To Get From Linear Thinking To Real Innovation

stained-glass-windowsEvery entrepreneur and every business I meet in my consulting and mentoring role has great intentions of bringing real innovation to the market, yet I find that most ideas are merely small extensions to existing solutions. I believe we need more non-linear “out of the box” thinking, to come up with the next step beyond the iPhone, or the next big step in transportation technology.

I often wonder how to get more people to think like Steve Jobs, Elon Musk, and a few others, who not only dream the big dreams, but can translate them and focus on results. To me, as a potential investor, this focus on results is key, and comes from a higher mindset of passion and delivery, including the following elements:

  1. Solve a problem, rather than sell your solution. Inventors are always talking about what they can do with technology, before sizing the need and the market. On the other end of the spectrum, entrepreneurs are quick to propose one more feature that they can do easily. Both fail to look first at what customers really need, and are willing to pay for.

    For example, DoorDash is a highly successful new food delivery service allowing people to order from local restaurants through a mobile application. It addresses a growing customer need, especially in times of a pandemic, with an innovative logistical platform.

  2. Promote a better future, rather than a product. It’s easy to become enamored with your solution, but customers need to understand the value for them in terms of the big picture. That means value in the short term (lower cost, new capability), as well as long-term value for society and the environment. People need both to connect and buy-in.

  3. Motivated by challenges, not potential paychecks. Real innovators are motivated by the challenges and objectives, more so than the size of the opportunity, or the potential to create a world-wide organization. They relish the learning, getting out of their comfort zone, and shaping the future. This means taking the long-term and strategic view first.

    Elon Musk has often said that he is driven more by the challenge of breaking free from the Earth as the cradle of humanity, than by money. He asserts that life should not be about making enormous amounts of money, but that’s easy for a billionaire to say.

  4. Always expanding relationships and partnerships. People who dream the big dreams, and can translate them into results, are constantly testing their thinking and learning from more experts and new relationships. Being around new people is the best way to expand your thinking and find the right people to collaborate on new projects.

  5. Progress requires an action-oriented strategy. I find that many entrepreneurs are great talkers about their intentions, but are short on specific action plans. A good business plan has specifics on the results you are striving for, with milestones, timetable, and financial projections. These are necessary for your own use, as well as for investors.

  6. Provide leadership and inspiration to others. Some people seem to have a natural ability to attract and inspire others to join them, and lead all to achieve results even beyond their own dreams. No matter how capable you are personally, you need a team to succeed in business, with skills and thinking that are complementary to yours.

    Sir Richard Branson is an excellent model of this approach, by continually inspiring those around him to new heights. His Virgin Group of over 400 companies, mostly led by entrepreneurs he mentored, spans the innovative gamut from space travel to healthcare.

With my years of experience in big companies as well as startups, I find that entrepreneurs and startups are in the best position to identify really innovative intentions, as well as execute on them. Existing businesses have to overcome the gravity of existing products and thinking, so they most often buy startups with broader innovations, rather than creating them internally.

This means that all of you can compete, even if you are starting from scratch. I urge you to keep bringing your ideas to the rest of us, learn from the strategies offered here, keep a special focus on implementation, and together we can bring real change to the world.

Marty Zwilling

*** First published on Inc.com on 08/18/2021 ***

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Monday, August 30, 2021

10 Self-Assessment Checks For Aspiring Entrepreneurs

Image-Man-aspiring-entrepreneurMaking the decision to start your own business is a major commitment, with huge implications for skills and lifestyle. Yet there is no standardized testing or certification required or available anywhere to help you decide if you are a good fit for entrepreneurship, or founding a business is right for you. An MBA or other academic credentials just don’t do it.

Therefore, the least you can do is take advantage of some of the self-assessment tools and guides around, like the classic book “The Entrepreneur Equation,” by Carol Roth, which highlights personal characteristics and skills required. Someday, I expect there will be a more formal certification required, like lawyers and accountants have to pass, to hang out their shingle.

Until that happens, I recommend that you consider the following ten mindset checks from Carol and others on your business aspirations, before you step in so deep that it’s hard to back out:

  1. Critically assess your motivation. Are you bored, wanting to be free of a boss, or eager to showcase a hot technology? These are not valid reasons to start a business. But if you're focused on solving a real problem, believe you can do it better than anyone else, and confident in wearing many hats, you have the right start-up mindset.
  1. Say hello to multiple new bosses. When you start your own business, you are no longer in control. You will likely not have the freedom you dreamed of. You will be controlled by your customers, investors, lenders – and you are personally responsible for answering to all of them, all of the time.
  1. Evaluate how well you work with others. Many people dream of opening a business as an escape from annoying coworkers and overbearing bosses. But now you have to interface with even more people, including accountants, lawyers, as well as clients and team members. You need to be comfortable with people and have sharp people skills.
  1. Add up your responsibilities. Owning a business is very much like raising a child. It’s a 24/7 job. If anything happens to the business (including a loss of income), how will it affect your family or home life? Remember, the buck always stops with you.
  1. Look at your management and industry experience. Being able to manage employees and vendors is the type of skill assumed before starting your own business. You’ll also need to know your industry inside and out. It helps to work in a similar company before you start your own.
  1. Take stock of whom you know. Business comes down to not what you know, but whom you know. Good connections are worth their weight in gold. They will get you interest from investors and lenders, and you will receive better financing, prices, terms, and conditions from business suppliers and professional services.
  1. Be honest about your relationship with money. Don’t expect your relationship with money to change just because you’ve opened a business. Opening a business requires money, as well as sound financial management. Do you panic about spending money or avoid financial risk at all costs?
  1. Assess your personality type. If you are a person who likes stability and control, or if you prefer when things go as planned, the roller-coaster ride of a new business may not be right for you. Every new business has highs and lows, and plenty of the unexpected.
  1. Examine the marketplace and your competition. To brand your business and woo investors, you'll need to understand why and how you can outshine competitors. Both good and bad competitors will influence how successful your business will be.
  1. Test your scalability. Successful businesses rely on automation and delegation. Will you be able to teach other employees to do your work? If your business relies on your brain and skills alone, you might have a successful job, but not a successful business.

Please don’t take these steps as being too negative, but do remember that the risks are high. Statistics say that the failure rate for new businesses within the first 5 years is as high as 90 percent. That should indicate that a lot of entrepreneurs get more than they bargained for. Think twice before you invest your precious time, money, and energy, and then go for it!

Marty Zwilling

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Sunday, August 29, 2021

8 Leadership Steps To Inspire Higher Team Commitment

high-business-team-engagementAs a business advisor, one of the most disheartening things I see in business today is a serious lack of engagement at all levels, consistent with Gallup’s global engagement survey from a while back, finding only 13 percent of workers fully engaged in their job. I see people walking around every day like zombies in a trance. The sad part is that is seems to be getting worse, rather than better.

I’ve heard many views on how to fix this, but I was most impressed with the specifics in a classic book, “The Workplace Engagement Solution,” by David Harder. He speaks from years of work with companies now leading the way, including Walt Disney, HBO, and Morgan Stanley. In my view, every company needs to follow all his action items, including the ones paraphrased here:

  1. CEO takes charge personally of improving engagement. Simply walking down the hall to human resources and telling them to fix the problem doesn’t do it. When the HR executive launches an employee engagement initiative, employees look past his or her shoulder to the CEO for cues that mean “business as usual” or no real commitment.
  1. Leaders walk the talk and use a democratic approach. If employees don’t see their leaders stand up and lead by example, employees will feel less engaged—and be less willing to do their best work. The most effective leadership style for today’s workers (Millennials and Boomers) is the democratic participative style, while retaining final say.
  1. Express continuous, and genuine praise to employees. Praise alone is one of the most powerful engagement motivators. Take the time to give genuine, specific feedback in a friendly, yet professional manner, in front of peers. A once-a-year bonus check or award is nice, but private occasional monetary awards will not increase engagement.
  1. Seeks ways to keep talent current and relevant. It all must start with hiring people who are the right fit for your desired culture. The right culture fit is actually more important than skills or previous experience. After the hire comes mentoring and continuous training as the key to engagement. Provide growth opportunities to retain the best.
  1. Packages engagement as an asset, not an expense. Your company’s success is dependent on your customer’s happiness, which is set primarily by engaged employees. Thus it’s important to stop thinking about the cost of employees and look at the benefits the employee can bring to your company. Treat employees as an extension of yourself.

  1. Moves the vision from short-term to shared value. Without a clear sense of purpose, employees will not be fully present, awake, or deeply involved in their work. Simply creating shareholder return each quarter is not enough. Today, every company needs a value-driven culture that is shared by employees, customers, and shareholders.
  1. Is transparent and fosters transparency at all levels. In this age of extreme access to information, no one can hide relationships, business problems, or economic impacts. In this new landscape, we can no longer ask workers to take on more responsibility without demonstrating the same in ourselves. Trying to hide the truth at any level reduces trust.
  1. Shows respect for employees and learns from them. When we interact with others in the workplace, it pays to conquer our differences by finding ways to connect first. Learn from and listen to that new co-worker or have lunch with someone in another department. Mentors can be particularly powerful in helping colleagues break out of the trance.

Organizations around the world claim to spend billions of dollars every year to awaken and engage their employees, but it hasn’t changed much. In fact, I’m convinced that the escalating rate of change in technology and the market is a large part of the problem. It has more than offset the conventional approaches to engagement and productivity.

Most workers hesitate to engage because they are overwhelmed trying to keep up with change. Rather than trying to change and drive them, we need to teach our workers how to change themselves, starting with the points outlined here. When was the last time you were a role model for embracing change?

Marty Zwilling

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Saturday, August 28, 2021

5 Strategies For Dealing With Opposing Views At Work

opposing-views-at-workOne thing is certain in any business – not everyone you have to deal with will be like you, or will like you (and vice versa). These people may include one of your business partners, an investor, a key vendor, or even one of your best customers. In my role as a business advisor, I see more and more how business people must bridge these differences to accomplish shared business goals.

We have all heard the stories of business disasters that result from people who are so different that they can’t get along. Some of these are legendary, including the Steve Jobs differences with John Sculley. Some are more current, such as the travails of Uber investors challenging founder Travis Kalanick, and the daily political struggles surrounding former President Donald Trump.

On a more positive note, as the business world becomes a global space, all of us have to learn to live and work with people of very different cultures, religions, political opinions, as well as different generations and genders. You have to manage and operate within more and more diverse teams, and your success in a career, or in building your business, depends on it.

Thus I was pleased to see these challenges addressed directly in the classic book, “How to Work With and Lead People Not Like You,” by Kelly McDonald, a well-known marketing and communications expert who specializes in multicultural and diversity marketing. She offers a set of strategies and tools for communicating across cultural and other barriers, including people you don’t like:

  1. Understand that they’re not trying to be difficult. Most people you have to deal with in starting and running a business are just being who they are. They are behaving the way they were socialized – the sum of how they were raised, cultural influences, and the dynamics of previous roles. Don’t let your emotion or theirs impede communication.
  1. Don’t try to change them – be civil and diplomatic. People can change themselves, but you can’t change them. Whatever their demeanor is toward you (or your business), remain positive and professional, and treat the other person with courtesy and respect. Do not allow tension to escalate, and your blood pressure and sanity will thank you for it.
  1. Adjust your expectations that everyone thinks like you. Business people come from different backgrounds and experiences, so don’t expect their behavior and opinions to always mesh with yours. Accept that there are very few absolute rights and wrongs in business, so expect different viewpoints, and don’t allow anyone to push your buttons.
  1. Focus on the business at hand and getting results. You are there to do a job, and so are they. Successful work relationships don’t have to be rooted in liking each other. Focus on the outcome you are seeking and what you and your counterpart need to do to get there. Success is about cooperation, respect, solving problems and working together.
  1. Agree to disagree without being judgmental. Saying “I see it differently” is neither judgmental nor combative, and it doesn’t mean you are trying to “win the argument” or persuade the other person to change their opinion. It diffuses tension and can lead to constructive conversation that allows you and your peers to work together productively.

In all cases, it’s important to be positive and maintain a can-do attitude. People avoid negativity and they are drawn to positivity. You can become a role model, a leader, and an ally for many team members which will lead to breakthroughs and results with even the most non-compatible situations. A positive mental attitude will also improve your health, and add years to your life.

Just remember that you have a business or a career to run. Experts are convinced that a diverse workforce, including people with different values and different perspectives, leads to better decisions and solutions – ultimately growing business opportunities, profits, and satisfaction. Diversity isn’t going away. Learn to deal with it now, and be the leader you always wanted to be.

Marty Zwilling

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Friday, August 27, 2021

7 Personal Habits Let You Have Fun While Working Hard

happy-business-peopleAre you one of those people who believe that happiness at work is an oxymoron? If so, maybe it’s time to rethink your perspective, and perhaps start enjoying work for a change. As an advisor to new entrepreneurs and new ventures, I’m seeing a refreshing new focus by Millennials on work and successful new companies with a purpose, and more productivity through happy employees.

Based on results and feedback from several leading companies, including Google, Apple, and Salesforce.com, happiness is the ultimate productivity booster. Happy employees, in this view, are more loyal, make better decisions, excel at managing their time, and develop other crucial leadership skills. There are many good articles which outline what these companies do right.

In fact, many people are quick to put the onus all back on companies to keep their employees happy, but I’m convinced that happiness at work requires effort on both sides. We need guidance on the employee responsibilities in the pursuit of happiness. It’s been my observation that employee attitudes, expectations, and bad habits are often the biggest barriers to success.

Thus I was pleased to see some guidance aimed at the people in the classic book, “Unlocking Happiness at Work,” by Jennifer Moss, who is a well-recognized speaker on the subject of happiness and gratitude at work. She is convinced that happiness at work can never be achieved without the right personal habits, and she has some key recommendations for getting there:

  1. Practical – focus on habits that are most relevant and useful. Although novelty is important in our lives, good work habit building is about opening up bandwidth in our brain to attend to things that we often take for granted, or ignore because we are too emotionally bogged down, like timely and positive response to phone calls and email.
  1. Enduring – add permanent positive changes every day. Building good habits is not a one-time-shot that has a beginning and end. The business world we live in today is constantly changing, so every habit improvement should be seen only as a part of an ongoing learning process. Most people are happiest when they are learning new things.
  1. Repeatable – practice daily repetition until automatic. If we reinforce a behavior through repetition, our brain will start to naturally select that behavior over another. With effort, the behavior change will be permanent. Take five minutes longer to enjoy coffee without diving into emails. Enjoy a 15-minute quiet time at lunch to reset, every day.
  1. Simple – start with some simple quick wins. Keeping a new habit simple will yield a quicker path to automaticity. This doesn’t mean you shouldn’t start more complicated habits; just start with a quick win to build the momentum and feedback. For example, sending someone a thank-you-note every day for a job well done will yield quick payoffs.
  1. Incremental – don’t aim for sweeping changes all at once. Want to get to work on time? Rather than make a big move and setting your clock for 4am, start by setting your clock five minutes earlier each day until the desired arrival time has been achieved. Get to appreciate your peers by stopping by some desk once a week for a couple of minutes.

  1. Short – limit time spent daily developing a new habit. If you never get around to strategic thinking, start with two minutes of quiet, focused time every morning, so it doesn’t seem like a huge investment of time all at once. Get in the habit of putting yourself first at least once per day. Your happiness and productivity will both go up.
  1. Targeted – integrate new habits into a healthy lifestyle. Don’t believe the old myth that it takes 21 days of pain to build a good habit. It’s more important to make key changes a part of your daily routine through healthy incremental steps. Develop a daily routine that includes self-care, including the proper rest, exercise, and recreation.

Given that most business professionals spend roughly 90,000 hours of their life working, separating work from happiness only gives rise to stress and unhappiness everywhere. It’s up to you, as well as your company, to stimulate that sense of meaning in your work that leads to satisfaction on both sides. How hard have you been persisting to make it a win-win relationship?

Marty Zwilling

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