7 Ways To Elevate Your Team Engagement and Happiness

Based on my own long experience in business, team satisfaction, engagement, and productivity continues to be a challenge. According to consistent feedback over the past several years, even in the best companies, employees seem stuck at less than 40 percent happy and "fully engaged.” That’s a huge opportunity for productivity in your business, as well as your team well-being.

Yet I still see many companies focusing on what I believe are ineffective approaches to turning this productivity challenge around, including stricter processes, more metrics, and financial incentives to improve motivation.

I believe the real solution is more aligned with the strategies outlined in a new book, “Put Happiness To Work,” by Eric Karpinski, who has been successfully bringing positive psychology tools and cultural transformations to the workplace for many years. He puts the need and focus on employee happiness through the following strategies:

1. Provide authentic appreciation for positive results. Authentic appreciation means regular and personalized expression of gratitude in real time. This is more powerful than any bonus or reward at the end of a period. My advice is for you to make it a habit to provide positive feedback to someone daily, and often in the presence of team peers.

   This strategy is particularly important, and particularly challenging, in today’s world of team members working remotely, where it’s easy for them to be “out of sight and out of mind.” Remember that feedback is only a text or phone call away, and much appreciated.

2. Improve team social connections to drive happiness. Everyone is wired for social connection and has a fundamental need to feel like they belong before they will fully engage. Make sure your employees feel psychologically safe with you. Your challenge is then to connect personally with each, and foster that connection among team members.

   A good social connection usually begins with an initiative by you to reach outside of the work environment, and talk about common interests, such as sports and family. This shows that you care about them as a person, and allows you to focus on positives.

3. Acknowledge stress and proactively provide support. By recognizing and explaining the value of a stressful project, you can make your team feel important and positive, rather than fearful and negative. You shift their mindset and yours to achieving success and productivity, rather than surviving a threat. The result is real engagement and results.

4. Help people uncover and apply their strengths. Most people don’t recognize their own strengths, and need your help, as well as strength assessment tools, to capitalize on them. Playing to your strengths improves your overall engagement and productivity, as well as satisfaction and happiness. Strive to practice strength-focused leadership.

5. Show people the meaning and purpose of their work. Every study shows that people are really engaged in their work, if they feel that it has value and purpose. You must start this process by sharing your own values and priorities, and explaining how you see the work values relate to the bigger picture of customer satisfaction and a better future for all.

6. Embrace negative emotions as a prelude to positives. Everyone has negative emotions in new environments or when pushing the limits, so acknowledge these as necessary. Help your team members eliminate uncalled-for or gratuitous emotions, caused by internal fears, and show compassion and support to get real engagement.

7. Enhance intrinsic motivation through coaching. Coaching works both at the employee-manager level and the peer-to-peer level to connect people to resources that can help them believe in themselves, connect to resources, and find internal motivation. Getting peers to help others also is a great source of satisfaction and engagement.

When adopting and rolling out the strategies outlined here, it is important to focus on one at a time, rather than overwhelming people with too much all at one time. Remember that you have to be a good role model, reinforce the progress along the way, and never forget to recognize and appreciate the efforts of every individual.

With that, I am confident that you will shortly see improvements in individual and team engagement, as well as productivity. Maybe more importantly, you will see a greater sense of satisfaction and happiness in the workplace. Life is too short to spend a major portion of it just plodding along on the treadmill we now call work.

Marty Zwilling

*** First published on Inc.com on 04/16/2021 ***

6 Ways To Improve Your Odds Of New Business Success

Almost every entrepreneur and new business owner I mentor is certain that his/her idea has a very high probability of success, and all find it hard to believe that ninety percent of startups ultimately fail. They always ask me for the key reasons that other people fail, but because I’ve seen so many different situations, I’m have been reluctant to generalize the failure patterns.

Thus I was pleased to see my own insights covered in a new book, “Why Startups Fail,” by Tom Eisenmann, a Harvard Business School professor, who has mentored many more entrepreneurs, and authored more than a hundred HBS case studies from real-world startups. I realized that he and I see several common patterns that account for a large percentage of new venture failures.

I paraphrase these for you here, not as a deterrent to you moving forward with your new venture, but as a guideline for how to do it better, avoiding the high risk elements, and enjoying the challenge and ultimate success of your innovative initiatives:

1. Make sure you have a robust, well-rounded team. If you are the hot-shot technical innovator that invented your solution, make sure you have an equally adept business and marketing expert to complement your skills. “If we build it, they will come” doesn’t work in today’s worldwide information overload. It takes the right team to build a great business.

   For example, I believe Bill Gates would have failed without his partners Steve Ballmer and Paul Allen. Bill Gates was the technical genius, but Steve Ballmer, from Procter & Gamble, ran the business side of the equation. Paul Allen was the technical visionary,

2. Test the viability of your business parameters. I recommend a trial run with an experiment or MVP (minimum viable product), at full price and cost, before the big bang launch, risking your investment money and a major time commitment. Pivot early, as required, to tune your features and marketing to meet the market and technical realities.

   I once met with an entrepreneur who had developed a new algae strain to cure world hunger and make him rich. He seemed to ignore the fact that hungry people have no money, and governments rarely pay. Even non-profits need income to run a business.

3. Look for validation from your mainstream customers. No matter how passionately you believe that everyone needs one, and positive feedback from friends and early adopters (false positives), before you invest in scaling the business, make sure you set and meet good metrics in cost of customer acquisition, recurring sales, and margin.

   With my software background at IBM, I’m well aware that technical early adopters value more and more features, and are able to deal with complexity. Typical consumers, on the other hand, value simplicity and usability, and are turned off by features they don’t use.

4. Gather your resources before scaling the business. Growing too fast kills many new ventures, due to staffing costs, inventory, and funding delays. The focus of key leaders has to change from driving innovative initiatives to replicating repeatable processes and tuning the overall product cycle. Mergers and acquisitions also require new skills.

5. Needed help can be your biggest burden. You need the funding and support, but venture capitalists can be very demanding, and set high targets. You need advisors and a board of directors, but they require regular communication and reporting, a strategic plan, and discipline. A growing team needs skilled managers and an HR organization.

6. The market is unpredictable and changes fast. The repeated bold innovations needed for long-term growth and sustainability are fraught with risk. Culture and environmental changes come quickly, or take longer than anticipated, as the number of markets you must service increases. You need predictable miracles and moonshots for success.

Despite all these challenges, and the angst that comes with them, almost every new venture founder, failed or successful, interviewed by Eisenmann and myself insist that they have no regrets, and can’t wait to do it again.

Thus I continue to urge aspiring business owners to get off the sidelines and into the race. It’s an amazing ride, and there is no satisfaction like creating something out of nothing. The world needs more entrepreneurs to envision and create the needs we haven’t even thought about yet.

Marty Zwilling

*** First published on Inc.com on 04/15/2021 ***

9 Crucial Elements Of Every New Venture Funding Pitch

As a long-time advisor to entrepreneurs and occasional angel investor, I often see and hear innovative product pitches that sound exciting, but are missing one or more of the key business elements that investors deem critical for funding consideration. We all hate to see your proposal rejected, when a bit more effort and homework could expedite your startup funding and rollout.

Of course, you can find these elements embodied in many of the business plan templates and tools out there, such as the Business Model Canvas. But in addition I’ve always found it helpful to provide a simple checklist for new venture founders and new business owners to make sure they have covered all the key bases correctly, including the following:

1. Define and focus on a single customer segment. The business proposals I see often target multiple unrelated segments, such as consumers, enterprises, and government. No new venture can muster the resources and expertise to attack all these opportunities concurrently, so I recommend a clear and quantified focus on one to maintain credibility.

2. Quantify your value proposition for customers. “Nice to have” and “improved usability” are not value propositions that people spend money or endure change for. Quantification of value in terms of dollars or time saved is much more attractive. Social value, such as providing the latest fashion trend, are secondary but also important.

3. Provide initial and long-term sources of revenue. “Free” is not an exciting business model for investor interest. Every business, including non-profits, need a viable source of revenue to cover the costs of operation and sustainability. The most attractive revenue model today for services is subscriptions, and for products it is sales and support.

4. Show a cost margin of at least fifty percent. Projecting a low cost margin, with a commitment to low overhead and hard work, is not convincing. Investors know that operational and employee expenses are always higher than anticipated, not to mention customer acquisition costs, capital expenses, and ongoing competitive initiatives.

5. Identify your intellectual property or “secret sauce.” Unfortunately, startups with an innovative product but no protection are quickly overrun by larger competitors with more resources. Competitor resources include larger cash assets, trained staffs, an existing customers, and a known brand in the market. Patents are a good place for you to start.

6. Specify a primary customer channel for sales. Today the most common and successful channel for new ventures is online e-commerce. Trying to distribute initially through wholesale and retail, as well as online, is very risky from an investor perspective. Other viable channels would include licensing, contracting, white labeling, and services.

7. Actions for a memorable customer experience. Modern customers are sensitive to the total customer relationship, including shopping, transaction, service, and support. You need to convince investors that you will excel in this area, as well as attract more new customers, maintain existing customer loyalty, drive repeat business, and grow sales.

8. Convince me that you understand your competition. I recommend that you pick your three major competitors, and highlight your advantages over each, without degrading any of them. No investor will believe that you have no competition, or that you can succeed in a market already populated with dozens of competitors. Outline your key activities to win.

9. Highlight the strengths of the entire team and partners. Most investors admit that they invest in the people, as much as the solution. Make sure they understand why you and your team are the right people to make this business a success. The same applies to your advisors, your partner relationships, and your leadership activities in the industry.

After highlighting all these elements, don’t forget to ask for the order. You need to specify what investment amount you need, how you intend to use it, and what percent of your equity you are willing to give up to get it. Everyone needs to feel you are proposing a win-win opportunity. Use your passion and conviction, as well as these specifics, to make my day as well as yours.

Marty Zwilling

*** First published on Inc.com on 04/13/2021 ***

7 Ways Fun At Work Leads To Innovation And Creativity

I’m convinced that people who have fun at work are more innovative, as well as happier. I don’t have any big scientific studies to prove this, but in my considerable business experience, I haven’t seen many successes come out of a group of fearful pessimists or unhappy people.

As I was looking through the literature, I did find evidence that many strong business leaders, like John D. Rockefeller, knew how to laugh at themselves. Humble leaders with this trait seem to create cultures that don't take themselves too seriously; cultures willing to take risks; cultures capable of creating and supporting a greater number of ideas.

Current popular startups, like Foursquare, with their break-up music and "Slow Jam Fridays" are a model of this new fun world. I can postulate several reasons why laughing and having fun at work might be linked with creativity and innovation. Here are a few:

1. Escape the inhibitions. Laughing tends to remove inhibitions. Under the spell of inhibition, people feel limited and stuck. This is what we refer to when we say “thinking outside the box”. Encourage everyone to be open to new ideas and solutions without setting limiting beliefs. Innovation is more about psychology than intellect.

2. Willing to make mistakes. People who take themselves too seriously are afraid to be seen failing. Failure while having fun is not usually seen as life-threatening. Expect that some ideas will fail in the process of learning. Rather than treating the mistakes as failures, think of them as fun experiments.

3. Reset to a positive attitude. Under the pressure of a difficult problem, or if you are stuck on something, nothing innovative is likely to emerge. Do something fun to shift your thoughts back to the positive. Come back to the work problem with a fresh and more creative mind.

4. Productive group activity. In teams, people feed off each other. A “downer” in a group takes the whole group down, whereas a fun person can bring the whole group to a more productive and innovative plane. This allows the group to “suspend disbelief” and really brainstorm new alternatives.

5. Likely to be seen. Successful people surround themselves with people they enjoy and respect. If you are unhappy, or take yourself too seriously, you are less likely to get the attention and trust of people who can make a difference, or even recognize your innovative ideas.

6. Likely to be heard. Communication effectiveness is the final hurdle for creativity and innovation. No matter how great your idea is, it won’t happen if it is not heard. People like to listen to fun people, and they close their mind to all the rest. If you want to be heard, write down the message and deliver it in a positive tone.

7. Be perceived as a leader. By definition, people who project negativity are not going to be perceived as leaders. Nobody will charge a hill led by someone who says it can’t be done, or someone who emphasizes the risk of death.

Some people seem to want to make fun an enemy of business. I believe you will accept that premise only at your own peril. Fun is all about creativity, innovation, play, experimentation, progress, and seeing real things come to life. The most innovative people don’t see any dichotomy between work and fun.

So I encourage you to go out of your way this season to nurture fun at work, as well as passion and motivation. Learn to pay attention to laughter. Where there is laughter, there is an idea that holds people's interest. If you don’t take yourself too seriously, the pleasant by-product is that work becomes more enjoyable, and your innovative side will be more visible.

Marty Zwilling

*** Spanish translation provided by Laura Mancini ***

5 Paths To Snag That Key Leader For Your New Venture

If you are a young startup founder, how do you find that CEO or other executive for your “dream team” to close on funding or complement your skills to kick start your company? It makes logical sense to scour the job boards, engage an executive recruiter, or scan the networking sites like LinkedIn for a good array of candidates, and then interview the ones with the best resumes.

But in fact, that’s just the beginning. To complement local face-to-face networking, you can always use one of the many online matchmaking sites that have sprung up in the last few years, like CoFoundersLab and Startbee (think eHarmony™ for entrepreneurs, or Match.com meets LinkedIn).

There you can connect with thousands of potential executives and partners, or find a planned meetup in a city near you. Also, trusted advisors and experienced investors should be polled for good candidates. Sure, some executives are found from resumes, and relationships can be built online, but trust and executive chemistry are hard to deduce from a resume or quick meeting.

From the candidate perspective, the ideal executive is much more likely to sign up for your job if he knows and trusts you, versus just meeting you online or through the interview process. In all cases, never lose focus on finding someone who can meet the following top objectives, adapted from some old advice by Jeff Richards to startup CEOs:

1. Build the team. The CEO must focus on key management team hires and assume a few mistakes which need to get fixed. A great hire can make a company, but a single bad one can break it. As one company Chairman says, "The common elements I see in first time CEO's: a) they don't hire fast enough, b) they don't fire fast enough, and c) they don't manage their board and investors well."

2. Provide effective leadership. Remember that leadership is both upward, as well as downward to direct reports and employees. A good CEO provides leadership to the Board of Directors, company investors, and stockholders. There are several books written on this subject. A good place to start is the classic "The Effective Executive - The Definitive Guide to Getting the Right Things Done", by Peter Drucker. In it, he says "Management is doing things right; leadership is doing the right things."

3. Create and sell a financial model. Even with a good CFO, your CEO is the top fund raiser. It's important that the CEO define alternatives and have a very clear view on how he will use the proceeds, including the option of not raising any outside capital at all. The CEO is the check and balance on the constant parallel pushes for more development, more marketing, and more growth.

4. Craft an operational plan and make it work. Most founders are product guys. They need an operational CEO who knows the market and the marketing game. He must nail down a sales process that fits the domain and economy. This includes the tactical as well as the strategic. The CEO needs to know how to qualify and close deals, as well as who to sell to, why do they buy, pricing, and what your strengths are against the competition.

5. Communicate company values and culture. Make certain you as the founder and the CEO are on the same page on mission, company values, exit strategy, and workplace model. Disconnects on how employees are treated or decisions will be made can be disastrous, especially with family-owned or closely held ventures.

Executive recruiters are the old-fashioned fallback, if networking doesn’t work out, but find one who has long-term relationships with many experienced candidates and business executives. I have found that most startups and small businesses can’t really afford to go this route (the average fee for a CEO is in the $40,000 ballpark).

So get out there and network today, online and offline, so you can be one of the lucky ones who has been nurturing a relationship with some candidates and executive recruiters before the real need arises. Your investors will love you, your company will prosper, and the new executive will be a hero. Everybody wins.

Marty Zwilling

8 Tips For How And Why To Say ‘No’ To Most Requests

Entrepreneurs have to know when and how to say ‘no,’ and be good at delivering the message. All startup leaders are besieged with requests for their time, attention, talent, money, or influence, and sometimes even good requests won’t fit into the time and energy you have available.

Startups require focus, so you need to say ‘no’ to some things, in order to do the important things well. This is really the principle of displacement, which dictates that everything you do rules out other things that you don’t do. It’s impossible to do everything.

For most of us, having to say ‘no’ somehow feels like a rejection, so we hate to do it. Instead, too many entrepreneurs just say ‘yes,’ and regret it afterward. So here are some tips that I have accumulated over the years that can help you say the right thing the right way:

1. Give yourself time to think. Before responding with an enthusiastic ‘yes’ that you never meant, or a cryptic ‘no’ that will ruin a relationship, ask for time to mull it over. It’s acceptable business practice to say that you need to check your calendar first, or pass the request by other principles before deciding. Commit a date for the final decision.

2. Explicitly evaluate the pros and cons. First, make sure you understand the full implications of a simple yes or no response. Every ‘no’ answer reduces the likelihood of another opportunity along the same lines, while every ‘yes’ answer increases your workload and the probability of burnout on your long list of critical items.

3. Listen to your gut. Sometimes we say ‘yes’ because we love the excitement of a new idea, when our instinct is telling us that it implies many complex issues that we are not prepared to deal with right now. It’s a fact that our brain often stores relevant information that we might not be able to vocalize right now. Trust your judgment.

4. Negotiate a return consideration. Often people asking for favors don’t realize or consider the cost, so you shouldn’t hesitate to ask for a reciprocal favor. It may make that person re-think their need for your help, or you may actually get more than you give.

5. Make the ‘no’ a function of your constraints. Emphasize that the rejection has more to do with your priorities, budget limitations, and workload, rather than any inherent flaw in their request. In this context, encourage a return discussion as some specific point in the future, or with some specific variation.

6. Lead with positives when saying no. Mute the sting of rejection by rewarding the person for being aggressive and creative, while not directly accepting the contract or proposal. It may even be appropriate to give some reward, such as access to an alternative opportunity, or recognition in front of peers, to encourage the source.

7. Pick the right time and place. Pick the least stressful time of the day, or a private place where you can talk sincerely, and give full attention to any questions or discussion. Watch your body language and tone to eliminate the guilt and fear that often make the ‘no’ response harder on the sender than the receiver.

8. Be logical, calm, and concise. Choose your words wisely to avoid confrontation and a defensive or emotional reaction, but make sure the answer is clear and understood. No one wins when you say ‘no’ so softly or ambiguously that the other party reads it as a ‘yes’ or even a ‘maybe.’ Skip the detailed explanations.

People have learned the art of asking, so you need to learn the art of saying ‘no.’ Rid yourself of the fallacy that you must say ‘yes’ to be viewed as a leader. If the request presents a moral dilemma to you, your code of ethics should allow you to refuse, rather than lie to the other party, or agree to something you can’t deliver. Just say ‘no,’ and smile as you say it.

Marty Zwilling

6 Ways To Increase Your Thinking Power On Key Issues

Startups and entrepreneurs are drowning in the information overload, where the volume of data created is like a new Library of Congress every 15 minutes. That creates a huge gap between data and meaning, and makes quick decisions and action ever more difficult. We all need to take a little more time to think.

On the other end of the spectrum, some people “over-think” things to the point of inaction. Acting without thinking, and thinking without action, are both deadly to a startup. The challenge is to find the right balance, and to make the thinking deep and reflective thinking.

In his classic book, “Consider: Harnessing the Power of Reflective Thinking In Your Organization,” Daniel Patrick Forrester talks about how some successful entrepreneurs, like Bill Gates, former CEO of Microsoft, force some think time in their schedule by abandoning the office for a cabin in the woods every few months for some reflective thinking. Others simply reserve an hour every morning for private thinking, despite a densely packed schedule.

What are the issues and questions that these successful leaders reflect on within their own organizations, and related to their own behavior? Here are some key areas for reflective thinking, from my perspective, based on the research from Mr. Forrester:

1. Think before you assert control. While none of us can stop the flow of data and the creation of content that swirls around us, we can control how we structure the moments that arise and our responses. As leaders, the control we assert in problem solving sets a tone that will be followed by the whole organization.

2. Give full attention very selectively. Now we work in a state of giving our “continuous partial attention” to issues before us. While not all matters require deep thought, we find the ones that do are afforded equal footing with ones that don’t. We must come to a conclusion about the consequences of giving only partial attention to top initiatives.

3. Carefully select communication methods. If email or text messaging is the default way you interact, then you have already declared where it sits in your hierarchy. While technology allows for speed and immediacy, it doesn’t usually convey the texture and empathy of face-to-face interaction that is key to many important issues.

4. Recognize the limited value of disconnected short dialogues. In many ways, problem solving has devolved into a series of dialogues that take place across digital transmissions with occasional face-to-face interactions. Failure to think deeply about forward-looking events and big ideas will come at a cost.

5. Book time to compose your thoughts. With the tethering to technology that happens to us throughout the course of a day, it is clear that we treat time with our thoughts as a low-level priority. Even if you can’t book a week away to thin, it isn’t hard to book a meeting with yourself, when you are off-limits to everything but your thoughts.

6. Reflect carefully before delivering messages. When people demand immediacy from you, do you consider how the people on the other end will receive it, before you dash off a message? Sometimes multiple crafting and editing iterations are required as you think about the ramifications. Is an electronic message even the right answer?

Think-time and reflection don’t just happen when we are alone. Startups will inevitably engage in discourse and dialogue through meetings. You need to insure effective discourse in meetings (“thinking out loud”) by making sure there are no negative consequences to dissent and debate. Otherwise meetings will be perceived as a waste of time by the people who count.

While technology and the Internet allow you to act and react more quickly than ever before, you need more than ever to consider decisions reflectively before making them. In addition to solving problems the right way, make sure you are solving the right problems.

Marty Zwilling

6 New Venture Funding Rejections And How To Recover

New entrepreneurs often seem to confuse viability with fundability. Certainly a non-viable business should be not fundable, but many viable businesses are also not fundable. Thus when an investor declines your funding request, you need to curb your anger and understand the real reason for this outcome.

In my experience, here are the most common issues that cause funding requests for potentially viable businesses to be rejected, in priority order:

1. Inadequate business plan. Some investors say half the ideas pitched to them don’t have any plan at all, even though some have great potential. Other entrepreneurs skip just a couple of the elements outlined in my original article, “These 10 Key Elements Make a Business Plan Fundable.” Investors know that first-time entrepreneurs who start a business without a good written plan almost always fail. Don’t take this shortcut.

2. Inexperienced team. Investors bet on the team, more than the business plan. Your business model may be very attractive, but if you are new to this, you may not be fundable. If you can find a partner who has deep domain knowledge and a track record of building businesses, I can assure you that your luck will improve.

3. Business domain is high risk or not squeaky clean. Certain business sectors have historical high failure rates and are routinely avoided by investors. These include food service, retail, consulting, work at home, and telemarketing. Also, don’t expect investor enthusiasm for your gambling site, porn site, gaming, or debt collection business.

4. Opportunity is not large or growing. Investors are looking for a large and growing market, to offset the huge risk of funding a startup. Rules of thumb include an opportunity projection that exceeds a billion dollars, with at least double-digit growth. Smaller numbers may easily make a viable business, but won’t attract investors.

5. No sustainable competitive advantage. The market may be large and growing, but you need some “secret sauce” or intellectual property to keep the big guys from jumping in, once they get the picture. Sleeping giants do wake up, and investors hate to see their money used to build a market for Microsoft, IBM, or Procter & Gamble.

6. Financial projections are too conservative or too optimistic. Investors won’t fund people who won’t push the limits, or inversely won’t recognize business realities. More rules of thumb. Your five-year revenue projections better reach at least $20M, but should not exceed Google’s actual revenues of $3B in the fifth year.

Don’t expect a straight answer on your rejection reason from most angels or venture capital people. They will probably tell you all looks good, but come back later, after you have finished the product, signed up a few customers, or reached some other future milestone. This is called “not burning any bridges,” in case you start to show traction and they want back in the deal.

Thus you need an experienced advisor who can do his own analysis of your plan, and follow-up informally with all investors to give you the real reason for your rejection, so you can fix it. I find it completely disheartening to see founders banging their head against the same wall over and over again with every investor, without even realizing their problem.

There were more than 800,000 startups last year, and only a small percent received investor funding. In fact most of the others avoided all these rejections by simply using their own money (bootstrapping), or using the old standby funding source of friends, family, and fools.

Even if you don’t intend to “run the gauntlet” of external investors, it will be worth your while to navigate your startup into a category that is both viable and fundable. Isn’t your personal risk just as important as investor risk?

Marty Zwilling

Can Your New Venture Pass The Scrutiny Of Investors?

If your startup is great enough to get a term sheet from angel investors or a venture capitalist, the next step for the investor is to complete the dreaded due diligence process. This is the last step of the process, where surprises in the evaluation of the management team, documentation, and personnel problems can derail the investment.

Some startups do nothing to prepare for the due diligence process, assuming the people and business plan documents will speak for themselves. Others stage elaborate “training” sessions, to “assure” that everyone tells the same story. The right answer is somewhere in between.

I believe that proactive preparation for due diligence is a bigger job than the work for investor meetings, because your whole team is involved, not just you as the CEO. If there are financial anomalies, or someone on the team doesn’t know the current strategy, or is unhappy with you or the company, the investment will be jeopardized.

Even if you feel that all is well, here are some thoughts and actions I would strongly recommend:

• Whole team must know the plan. Make sure the Business Plan and all related documents are current, synchronized, and in the hands of every key employee. If everyone gives a different story, you have no story.

• Personnel situation is stable. Ask everyone to update their resume, and personally call probable references, so there are no surprises. You need to brief the investor ahead of time if there are career anomalies or personnel situations that could be a problem.

• Don’t surprise the team. Call a company meeting to communicate what is happening, and why. This is a good time for the CEO to present the final investor charts, and answer any questions from employees. All need to know who will be there and what you expect.

• Contact key vendors and existing customers. Explain that they may be called, and use the opportunity to check their satisfaction with your company and your product. Again, if you find problems you can’t fix, be up-front with the investor to avoid a surprise.

Depending on the availability of staff and needed information, the due diligence process generally takes 2–6 weeks to perform. During this time or earlier, you should also be doing your own due diligence on the investor, as suggested in a classic article on avoiding problem investors.

Here is a quick summary of the priorities normally covered by the due diligence process:

1. Evaluation of key players. This is the highest priority item. As a starting point, an investor will ask for resumes of the “key players,” and will then follow-up to verify that executives are experienced, honest, and committed. That means questioning each of these key players, and calling references or prior associates.

2. Validation of product. This will cover the technology, the current state of development, and customer satisfaction. Is it something consumers need or simply want, does it work, and is it ready to ship? What are the “kinks” or certifications that need to be resolved? If the product is in customer hands, expect some customers to be interviewed.

3. Size of the market. Having a great product or service is not enough. One of the criteria for a good investment is a large and fast growing “potential market.” Investors will talk to their own experts on the size of the potential market and the expected growth rate. They will also assess trends in the market and how current economic, political, and demographic conditions relate.

4. Sales and marketing strategy. This will involve an analysis of the company’s distribution channels, advertising, and pricing strategy. An investor will try to get an independent reading on competition, barriers to entry, price sensitivity, and what percentage of the market your company can expect to capture.

Remember, once investors contribute money to a company, a long-term relationship is created. Unlike a marriage, however, it may be very difficult, if not impossible, to get a divorce. Your objective is not only to survive, but also to make it an enjoyable win-win relationship.

Marty Zwilling

10 Entrepreneur Actions To Grow Beyond A One-Man Show

Success in a startup is not possible as a “one-man show.” An entrepreneur has to engage with team members, partners, investors, vendors, and customers. In my experience, the joy of positive engagement is sometimes the only pay you get in an early startup. Amazingly, many successful startups are built on this basis alone, with almost no money.

I will talk here primarily about building the internal team of a startup, but the same principles apply outside to your “extended team” and customers. I recommend the ten practical steps outlined by Bob Kelleher, in his classic book “Louder Than Words,” from his many years of experience in corporate environments. These are easily adaptable and equally relevant to the startup environment:

1. Link high engagement to high performance. Don’t confuse engagement with satisfaction. The last thing you want is a team of satisfied but underperforming people. Kelleher defines engagement as “the unlocking of employee potential to drive high performance.” Set and reinforce high performance goals.

2. Demonstrate engagement at the top. Leaders must demonstrate support for an engaged culture by personally living their company’s values. Then engage team members in tough decisions. In today’s recessionary times, leaders have large shadows – and team members are watching everything they do!

3. Engage operational leaders first. Studies show that if one’s line manager is disengaged, his/her employees are four times more likely to be disengaged themselves. To stay engaged, I always practiced “management by walking around.” There is no better way to find out how engaged the rest of the team really is. It works at all levels.

4. Focus on communication at all levels. If you neglect to articulate a clear vision of the future, expect only a minimum of energy to make it happen. Successful leaders provide robust communication, built on clarity, consistency, and repetition. It always amazed me as a leader how many repetitions were required before everyone heard the message.

5. Individualize your engagement. Today’s leaders must tailor their communication approaches, rewards, and recognition programs to the unique motivational drivers of each employee. Communication must be tuned to the different generations, diverse groups, and each individual.

6. Create a motivational culture. Long-term motivation comes from people motivating themselves, but you have to create the right culture. Leaders are more apt to get the discretionary extra effort of their team when they create a culture of empathy and concern about team members as real people!

7. Facilitate and use feedback. For open and honest communication, your practices must include the means for that to happen. Entrepreneurs need to ask team members what they think, and then act on the feedback. The bases of feedback may be a suggestion box, social media, town hall meetings, or “open doors” all the way to the top.

8. Reinforce and reward the right behaviors. Employees are incredibly motivated by achievement and recognition, more than money. Money can cause disengagement if team members perceive unfairness. On the other end of the performance spectrum, there must be consequences if you expect behavior to change.

9. Track and communicate progress. Leaders need to reinforce progress real time and frequently, by telling their team members what is expected, how they’re performing, and where they fit in. These are key both for alignment of priorities and engagement.

10. Hire and promote the right behaviors. Sometimes teams don’t have an engagement issue, so much as a hiring issue – hiring the wrong behaviors and traits to succeed in the startup culture. Also, promote only people who exemplify the behaviors that are most important to your success.

Always remember that your actions speak louder than your words or any written policies. Maximizing team engagement is the key to capturing that extra discretionary effort that separates winning startups from losing ones. This is a never ending responsibility that starts on day one. Are you living these steps today and every day?

Marty Zwilling

8 Ways New Venture Founders Create Whole New Markets

The ultimate compliment that any entrepreneur can get is that they can “see around corners.” This is a statement that they are willing and able (and successful) at projecting market and technology turns, not just straight-line innovations. They have the courage to make bold decisions, often contrary to conventional market research.

Elon Musk with Tesla and SpaceX may be the most current example of this phenomenon, but others often mentioned include Richard Branson (Virgin Group), Joe Costello (Cadence Design), and Howard Schultz (Starbucks). Most of you could suggest one more, but not many.

Seeing around the corner does not mean closing your eyes and jumping into the unknown. We can all point to the casualties from that approach. Great entrepreneurs seem to all exhibit a common set of attributes which go well beyond the basic skills required to be an entrepreneur:

1. “Larger than life” personality and presence. Richard Branson’s adventurer escapades are legendary, and Steve Jobs made new product presentations an experience, as well as a sales pitch and an education. Joe Costello was known to dress up as Frankenstein and the Riddler for company functions, and wasn’t afraid to laugh at himself.

2. Strive for breathtaking design, as well as function. Great entrepreneurs remember that great design motivates and excites customers, often even more than function. Design is not just about making things look pretty. It gives a product structure and style, and makes it memorable and unique.

3. Practice learning as an action sport. Entrepreneurs who depend on the ‘traditional’ learning process (schools, formal classes, practice problems, and risk-free iterations) are doomed in breaking the paradigm. The best entrepreneurs attack learning like a sport, savoring the challenge, and practicing it every day.

4. Possess extraordinary passion and energy. Visible passion is a quality that helps successful entrepreneurs choose their direction, attract clients, investors, and success. They also remember that energy is a resource that must be renewed, so they treat themselves well both physically and emotionally.

5. Believe there is no such thing as a crazy idea. For real entrepreneurs, crazy is a compliment, and the new market may be just around the corner. Besides, many of the most commonly used items today, like disposable razor blades, were deemed crazy ideas before their inventors made a fortune.

6. More to business than dollars and cents. Entrepreneurs who see around corners usually start with the “big” vision of making the world a better place. Guy Kawasaki talks about making your product a “cause,” rather than just focusing on how much money you can make, and considering social entrepreneurship for maximum impact.

7. Not afraid to kill the cash cow. Holding back on promising new businesses to maintain old ones is the bane of many entrepreneurs. Unfortunately, playing defense is easier than playing offense. Steve Jobs didn’t hesitate to kill the iPod in favor of the iPhone and iPad, which moved the market to a whole new level and kept competitors at bay.

8. Build a great team and nurture them. The best entrepreneurs know that investors invest in people, not ideas. Customers buy from people, not companies. With a team of the best people, the sum is greater than the parts, so your chances of surviving the walk around the corner are optimized. Surround yourself with people smarter than you.

But all these attributes don’t mean that anyone should expect to get it right every time, or certainly not the first time. All the entrepreneurs mentioned here have had their share of failures and false starts. The key is learning from a failure, and having it increase your motivation and focus, rather than de-motivate.

My advice to the entrepreneur looking to earn the ultimate compliment is to first sharpen your view by tackling a more modest straight-line objective, and bouncing your bigger visions off people who have been there and done that (peers, investors, and competitors). Use those reflections for a sneak peek around the corner before you leap.

Marty Zwilling

6 Keys to Attracting Customers Based On Social Needs

As a logical and data-driven business advisor, I have long focused on facts, technology, and quantifiable pain in guiding entrepreneurs. Yet, these days, I am seeing overwhelming evidence that customer buying decisions, especially with consumers, are often based on emotional and psychological factors, including passions from others, your experience, and social relationships.

For example, my dictate that entrepreneurs need to find a “painful” problem to solve (such as high cost, low productivity) to attract customers, doesn’t really account for many successful startup businesses today, including top social media platforms, dating sites, and new fashions. I now offer the following additional guidelines for how to attract customers and position your product:

1. Find the latest social trend, or even create it. Consumers seem desperate these days to not be left behind as the crowd moves on. They depend on their favorite social channels and peers on social media to make emotional decisions for them, rather than rely on any kind of “cost-benefit” analysis. I see this even extending into business-to-business.

   For example, the sharing economy is a trend that has resulted in many successful businesses, including Airbnb and Uber. I more often hear of Airbnb rental decisions based on “local flavor” and “hospitable hosts” than any cost advantage or special features.

2. Nurture relationships with popular social influencers. Most consumers now use their online access from smartphones and tablets to interact with social networks, product reviews, and monitor the videos of culture influencers around the world. These perceived authoritative sources create a community who follow their lead, based on psychology.

   Most experts agree that these people now create and grow more trends than classic push advertisements. By focusing your marketing activities on key individuals known to wield influence in your target customer market, you can deliver a more "authentic" message.

3. Play to exclusivity, uniqueness, and personalization. Everyone wants to be different, somehow, to stand out in the crowd that they choose to join. Your challenge is to positively influence decisions on your offering by defining its availability as limited, selectively offered, and guaranteed to improve status. All of these tend to override cost and usability.

   Facebook, as an example, credits its early success to initially limiting membership exclusively to Harvard students, and gradually expanded access to other colleges and the world. Other startups use technology to provide personalized products to all customers.

4. Build positive relationships with potential customers. Customers more than ever want to do business with people they know, respect, and trust, and implicitly allow these factors to override cost and other features. For you, this means get out there and meet your customers, build a relationship via social media and commit to a purpose beyond profit.

   Blake Mycoskie, founder of TOMS shoes, set a higher purpose of donating a pair of shoes to the needy for every pair sold, and found that the return was far greater than the cost of donated shoes. Other studies have shown a return of up to 400 percent for this approach.

5. Highlight benevolence to customers and society. Every business leader tries to deal fairly with everyone, such as refunding a return from a dissatisfied customer. But these days, it can pay big dividends to go above and beyond to make people happy or benefit society. Your customers will feel obligated to pay it forward, and repay you with loyalty.

   At every Ritz-Carlton, employees are authorized to spend up to $2,000 per guest to solve a guest issue or improve a guest's stay, no matter what the cause. If I experienced that kind of benevolence at any business, I would be an advocate and loyal to the utmost.

6. Declare your values and unfailingly practice them. Consumers have a long memory, and will test your consistency, based on prior experiences and feedback from peers. A single bad or inconsistent experience will jeopardize their brand loyalty, and a history of positives will generate real “value” that rises above cost and other decision criteria.

Yet don’t assume that any of these will override the basic need of every business to be self-sustaining via revenue to meet expenses over time. I still find entrepreneurs who are passionate about doing good and satisfying customers, but forget to focus on a business model that generates a financial return. The objective of every business must be to do both for all to win.

Marty Zwilling

*** First published on Inc.com on 04/01/2021 ***

10 Tactics To Shorten Your Race To Cash-Flow Positive

As I’m sure you are aware, surviving that first couple of years as a new business is a huge challenge, waiting for cash flow to turn positive. In my experience as a business advisor and occasional investor, many of you won’t make it that far, succumbing to the high costs of getting those first customers, funding an initial inventory, and building an operational support process.

Of course, it helps to pick a business model that minimizes these costs, such as e-commerce to minimize initial staff and facilities, or professional services, where you are the initial product. After you have sold your first company for several hundred million, you can then afford to challenge Elon Musk on the next line of electric vehicles, or Apple with a new and better smartphone.

For the rest of us, I’ve accumulated the following additional practical strategies for surviving the scale-up challenges, and making your business profitable and sustainable:

1. Enlist an experienced advisor to project real costs. Don’t let your passion and “can-do” attitude convince you that you can overcome all financial realities. I’m a big fan of first creating a real business plan, with five-year financial projections, to convince yourself and investors that you have done your homework. The advisor will give you real credibility.

2. Assess your resource potential before you start. Surprisingly, I still find many aspiring entrepreneurs who assume that if their idea is good enough, funding will appear. There is a reason that ninety percent of startups are still self-funded, and most of the rest have major contributions from friends and family. Build your plan around resources you know.

3. Start networking for funding before the crisis. Even if you intend to bootstrap the business, or have an anticipated funding source, it pays to start early in lining up an alternative. When the cash crunch hits, or other alternatives change, it’s too late to start looking, and you won’t have any leverage or credibility to negotiate the terms you want.

4. Join a startup accelerator or structured peer group. The real value of these groups is the relationships you can build with key people who can help you later, as well as the early learning from the incubator organization. These can be a key source of funding connections, vendor contacts, and potential partners during your rollout and scaling.

5. Negotiate bartering deals versus cash contracts. Don’t underestimate the advantages of providing your products and services in exchange for access to facilities and equipment you need to grow. Especially today, when more companies are willing to work through outsourcing, freelancing, and contracting. Everyone wins with this approach.

6. Nurture current income sources as long as possible. Contrary to the advice of Mark Cuban, don’t quit your current job until the new business is cash-flow positive. Startups always take longer to get started than anticipated, so jumping in with both feet too early will dramatically increase your risk of running out of money with no buffer available.

7. Actively seek out government and local incentives. Especially in these times of pandemics and economic initiatives, SCORE and other government agencies are likely to help you if you plan ahead. These programs don’t usually ask for equity, and they are particularly targeted to the early stages of your business to facilitate growth and survival.

8. Negotiate a line-of-credit with a financial institution. Even if you don’t intend to use it, a line of credit is a great backup for unanticipated scaling costs, such as inventory. It’s another backup that can be arranged much more readily before a crisis, is more often available than a loan, and doesn’t usually cost money until and unless it is really used.

9. Consider partnerships or joint ventures with competitors. This approach, often called “coopetition,” works best when you find someone who has complementary products, rather than direct competitors. In these cases, you both win by expanding the market. Use this strategy to fill gaps in your product line without great new cash outflow.

10. Use “white label” or custom contract for extra income. White labeling is custom branding your product for a particular customer, to keep committed resources busy. You see these labels at grocery stores all the time. Similarly, a custom contract for a big customer can get you over a growth gap, without diluting your brand in the market.

In the minds of most business consultants, the challenge of surviving as a business until you make a profit is so great that this stage is often labelled the “valley of death.” It’s the time when your invention or innovation gets transformed into a viable business, or you have nothing. I’m counting on your diligence, as well as your passion, to make it happen for you.

Marty Zwilling

*** First published on Inc.com on 03/29/2021 ***

5 New Venture Mistakes That Can Cost You The Business

Although every startup is unique, there are certain common avoidable mistakes that can lead to legal complications which jeopardize the long-term success of the business. I’m not suggesting that every startup needs a lawyer, but you should definitely pay attention, and not be afraid to consult legal counsel if any of these raise qualms for you.

Like other environments, most legal issues don’t result from fraud, but from ignorance on specific requirements, or simply never getting around to doing the things that common sense would tell you to do. Here are five of the most common examples:

1. Failure to document a Founder agreement at the beginning. This oversight can lead to the so-called “forgotten Founder” problem. Early partners or co-founders often drop out of the picture early due to disagreements, and you forget about them, but they don’t forget about the verbal or email promises you made.

   Later, when your venture is trying to close on financing, or even going public, that forgotten partner surfaces, demanding their original share. This problem can be avoided by incorporating immediately after early discussions, and issuing shares to the Founders, with normal vesting and other participation rules.

2. Trouble with the IRS over Founders stock value. Many startups delay incorporation until the first formal round of financing, which is too late. At this point your entity may already have several million in valuation, so the IRS will tax your shares at that value immediately as income, just when your cash flow is at its lowest.

The solution again is to incorporate early, when Founders shares clearly have trivial value, and filing an “83(b) election” with the IRS within 30 days of the agreement. Then you will only have pay tax on the increasing value of your shares when they are sold.

3. Disclosing inventions before the patent application is filed. Entrepreneurs often put off the hassle and the cost of filing a patent until first funding. Then they realize that they have talked to many people without signing non-disclosure statements, precluding a patent, or someone else has now beat them to the filing docket.

   There is no excuse for not filing at least a provisional patent early. This will hold your place in the patent line for a year, and the costs and time for this filing are much less. Even trade secrets need to be documented, and reasonable steps taken to keep them secret. Business plans and other documents should always be labeled as confidential.

4. Founders ignore non-compete clauses from former employers. If your new business is even remotely similar to that of your current or former employer, think hard about any written or implied non-compete agreements you might have. Do the same for every business partner or employee you may hire.

The best way to short-circuit this problem is to have a frank and open discussion with former employers, perhaps under the guise of asking them to invest in your venture. This is a smooth way to end the relationship, and get some money, or get their lack of interest documented in a note back to them. If a lawsuit is inevitable, better sooner than later.

5. Taking money from unknown or non-professional investors. Investment fraud continues to be a common subject, even though Bernie Madoff has long been safely behind bars. It’s not a good idea to take money from anyone, even friends and family, without an experienced investment attorney drafting or reviewing the agreement to make sure it complies with federal and state securities laws.

This works to protect you from unscrupulous investors, as well as non-professional investors who may later say that your business plan was misleading. The best advice is to only take investment funds from people who can financially afford to lose, and who qualify as accredited investors.

Overall, the biggest legal mistake that a startup can make is to assume that any legal problems can be resolved later. Finding a lawyer early is easy these days, through local networking or even online services like LegalZoom. In reality, it will cost you much less to get it right the first time, when the stakes are still low, compared to the heartache and cost of correcting it later.

Marty Zwilling

10 Ways Leaders Must Change As The Business Matures

Entrepreneurs often have formidable technical expertise, key to developing a new product or service, but a great naïveté in management skills. They run into difficulty when their business reaches the $1-2 million annual sales range, or their employee count exceeds 5-10. It’s here that entrepreneurs must shift their thinking from tactical and operational, to strategic and managerial.

I’m convinced that management is a learnable skill. It can come from experience, or from training in a prior company, and it can even be self-taught from the Internet by smart entrepreneurs, just like they learned the skill of establishing a company, negotiating a contract, or filing a patent.

There are also many books on this subject, including this classic from the master on management, Brian Tracy, “Full Engagement!: Inspire, Motivate, and Bring Out the Best in Your People.” In it, he outlines a long list of key management principles for success. I’ve extracted here some key ones relevant to startups entering the growth stage:

1. Communication clarity is essential. Management is “getting results through others,” not doing it yourself with the assistance of others. That means your chief responsibility is to communicate clearly about what you need done, and who has the responsibility to do it. Your growing team doesn’t automatically know what you are thinking.

2. Planning has priority over doing. Planning is one of key learning areas, in moving from an entrepreneur to a manager. Your ability to plan, to think through what needs to be done, in advance, on paper, is a critical skill that largely determines your entire future. Your job moves to determining what is to be done, instead of how it is to be done.

3. Organize your work before you begin. Most startups begin first, and think about organization later. Organizing means bringing together the necessary resources, and assembling the right people, then assigning work to specific people to be accomplished at specific times to specific standards of performance.

4. Delegate effectively and often. Delegation doesn’t work when you are creating your startup. ‘Not delegating’ doesn’t work when you are growing it later. Remember that delegation is not abdication. It’s still your company, so you have to follow-up, step in for disaster recovery, and keep the interplay between tasks and organizations working.

5. Staff properly at every level. This is not the same as finding a partner with complementary skills to start your business. It means not only hiring, but training and measuring performance. It means mentoring less experienced team members, and quickly replacing incompetent staff members. These are all skills you can learn.

6. Focus on high productivity. For growth and success, you need to continually look for ways to increase output, while lowering costs. That’s a big step from one product for one customer. The three R’s for attaining higher productivity are reorganization, reengineering, and restructuring. No entrepreneur is born with these skills.

7. Set the standard with visible actions. You can only lead by example, and set equally high standards for the people around you. You learn and gain credibility by committing to excellence, and asking customers and team members for feedback and ideas.

8. Concentrate on the important tasks. All successful managers never forget to concentrate on their most important task and stay with it until it is done. As a startup grows, it’s easy to try to do too many things at once, while doing nothing particularly well.

9. Identify constraints and their source. Between you and any goal is a constraint setting the speed at which you achieve that goal. The best managers are the most creative in overcoming constraints. Constraints follow the 80/20 rule – eighty percent are from inside, and 20 percent are from the outside. You need to tell the difference.

10. Concentrate on continuous improvement. No company that is static can grow or survive. Continuous improvement requires strategic planning to set new objectives and work toward them. Every growth company needs to innovate continually, maybe spending 20 percent of your revenues on research and development.

Some entrepreneurs, on seeing all this, will decide they have no interest in being a manager. They should voluntarily bow out early, to start another business. Others will get pushed out, with some pain, by investors who see the need for a new team to lead the growth stage. Even more painfully, too many others won’t bother to change their style, resulting in everyone being unhappy, and a business that stagnates, or even fails.

Things that great entrepreneurs have in common with great managers are that both are results-oriented and action-oriented. They have a sense of urgency, and move quickly. Thus it should be easy to apply those attributes to the learning required for the next stage of your company. Just start now, and do it!

Marty Zwilling

*** Bulgarian translation provided by Zlatan Dimitrov ***

6 Keys To Finding The Right People For A Winning Team

If you are a new business owner or entrepreneur, you are likely to be creative and willing to take a risk, and you probably assume that most potential team members have the same mindset. Unfortunately, the reality is that not everyone has that mindset, and one of your toughest jobs is to find the right hires to make your business a success.

In these days of rapid change, the pandemic, and worldwide competition, you need to make sure your entire team is customer-focused, innovative, and always looking around the corner for the next big thing. From my own experience hiring and managing people in large companies as well as small, here are the key characteristics to seek and nurture in new team members:

1. Look for people who exude energy and passion. It's really not that hard to recognize when potential team members come alive when describing their skills, accomplishments, and aspirations. After joining, these are the ones who are always looking to expand their domain, are willing to tackle new challenges, and are not afraid to suggest improvements.

2. Beware of perennial critics and lone wolves. Every successful business is a collaboration of people with complementary skills, who are willing and excited to work together. You don't need team members with a highly specialized focus, who tend to be critical of the needs of others, or would prefer to be isolated from most business issues.

   On the other hand, that doesn't mean that you should not provide critical feedback to team members. People who are anxious to improve, or reluctant to take an initiative, really need your direct guidance and coaching to learn what they need to do.

3. The right people will recognize the big picture. These are the ones who are not afraid to ask the "why" question, as well as "how," even when there may not be any easy answers. One of the most successful strategies for new startups today is to lead with their "higher purpose," such as a focus on the environment or helping the disadvantaged.

   Recent articles report that companies where everyone is focused on the big picture can increase their returns by up to 400 percent. That level of impact is enough reason for you to spend the time up front, and along the way, to select the right people.

4. Find folks who are customer-centric and sensitive to competition. This means always looking outside the company first, rather than inside, and being willing to challenge the assumption that things have "always been done this way." Listening to customers requires your help in rewarding rather than penalizing that activity, and being the role model to follow.

   As an example, customer-centric may mean interacting on social media, or actively taking the customer's position in a dispute, rather than the company position. It always means people not being defensive when addressing competitor activity or initiatives.

5. Find people who enjoy being problem solvers. Anyone can do a job when everything runs perfectly, but that rarely happens in any business. Real problem solvers just make it look like everything is working, and you as the owner are not forced to close all problems yourself. Your best people will solve their problems better and quicker than you can.

   They have the specialized skills you hired them for, and are usually much closer to all the details and ramifications. Thus, it is important that you don't become part of the problem by micromanaging these people or jumping in with your own biased solution.

6. Pay special attention to people who show leadership. You desperately need people on your team who can be the next leaders, may eventually replace you, and are willing to push for the innovations that can keep your business ahead of competitors. Look for accomplishments in prior roles, and a willingness to accept coaching and mentoring.

Remember that agility, innovation, and customer-focus are at the heart of every successful business today. Hopefully, you already embody these attributes, so your primary mission must be to extend your impact by surrounding yourself with passionate and creative team members.

Together, your team will win in the marketplace, and make this world a better place for all of us.

Marty Zwilling

*** First published on Inc.com on 03/26/2021 ***

7 Ways To Keep All Players Centered On What Matters

Every entrepreneur’s first priority should be the alignment of interests across the range of constituents required for success – partners, investors, customers, vendors, and employees. The best are ones quickest and most willing to do the realignment on a continuous basis these days, as the market changes, customer interests change, and you learn from experience.

Alignment means everyone has complementary objectives, and everyone is executing on their objectives. These things change so fast these days that the primary role of the entrepreneur as CEO is to be the Master of Realignment. My perspective on this role is outlined in the classic book “Rapid Realignment,” by the experts in this space, George Labovitz and Victor Rosansky.

The basic alignment framework of strategy, customers, people, and processes hasn’t changed, but the pace of technological, competitive, and social change has increased at an amazing rate. Most entrepreneurs recognize the need to pivot on a regular basis, but many forget that pivoting usually requires a realignment effort to get all the players back in sync.

At the highest level, startups must remember what Jim Barksdale of Netscape and FedEx famously said, “The main thing is to keep the Main Thing the main thing.” That means keeping all the players and all the organizations centered on what matters amid the crosscurrents of change. There are several key principles to follow along these lines:

1. Move slow, fast, faster. The experts advise taking your time initially to listen, learn, and gather data. Then it’s time to speed up with a set of ambitious initiatives, and finally going all out to engage all the constituents in enduring change. False starts or obvious mis-steps will derail even the best pivots.

2. Revisit your startup vision and values. Make sure the inspiration that launched your vision isn’t lost in the course of a pivot or market change. Of course, you may need to realign that vision to your team, your investors, and all the other players. Without that realignment, many may be left with confusion.

3. Realign all elements of the plan. All too often I talk to startups which still don’t have a social media plan even though most of their customers now use social media as a key part of their buying decision. If you have had to pivot from the consumer market to enterprise customers, that requires new pricing models and new sales channels.

4. Communicate, communicate, communicate. If you want effective team collaboration, you have to communicate effectively. When I was an executive, a common complaint was “Why didn’t someone tell me about the change?” A rule of thumb is that you need to put out an important message four times, in different ways, before everyone hears it.

5. Change out team members as required. Entrepreneurs need to understand that realigning a team often means replacing members who are unable to change. It certainly is likely that you will have to get new strategic partners, and market to a new segment of customers. These changes may cost more than product changes.

6. Update delivery systems and processes. Re-evaluate processes as they are today and set metrics to better represent the new sales, operational, and service needs. Then you have to face the reality that it’s time for new systems, software, or vendor contracts. Building a culture of continuous improvement is great for facilitating realignment.

7. Pay particular attention to investor alignment. For inexperienced entrepreneurs, pivots and realignments often lead to some of the biggest disagreements and tension with investors, whether they be family, Angels, or VCs. These can easily result in CEO/Founder replacement or funding freezes if not handled openly and above-board.

Quite simply, rapid realignment is required for long-term survival in today’s startup world. Entrepreneurs need to realize that they can’t accomplish the alignment alone – they need to get engagement from all the members of the team, and the extended team. Make sure it hasn’t been pushed too far down on your priority list.

Marty Zwilling

6 Ways To Improve Your Chances Of New Venture Success

Every entrepreneur wants to know how they can improve their odds on the road to success, and why some entrepreneurs seem to be able to squeeze success out of even a marginal business case. Most experts agree that is has lot to do with your level of passion, determination, and innovation, modulated by a strong focus on reality, common sense, and street smarts.

John Bradberry, in his classic book “6 Secrets To Startup Success” explores many of these attributes, especially passion, and defines some useful principles to help enthusiastic entrepreneurs squeeze the most out of their passion, while not being trapped by it. Every existing and budding entrepreneur should internalize these reality principles:

1. Ready yourself as a founder. Too often, passionate entrepreneurs leap head first into a venture before thinking it through. To improve your readiness to succeed as a startup founder, take an honest look at yourself as a founder before leaping. Reality-check your goals, then focus on ways to leverage your skills, assets, resources, and relationships.

2. Attach to the market, not your idea. Passion is an inner phenomenon, but all healthy businesses are rooted outside the founder, in the marketplace. To turn your passion into profits, emphasize the market, and always think about your business relative to the customers you serve. Know your markets and execute on your market opportunity by placing a priority on your customer’s experience and perception of value.

3. Ensure that your passion adds up. Passionate entrepreneurs tend to develop rose-colored plans, over-estimating early sales and underestimating costs. To convert your passion into tangible business value, write a business plan that makes financial sense for the needs and future goals of your startup, and have it checked by an expert.

4. Execute with focused flexibility. No amount of startup planning can accurately predict the unexpected twists and turns imposed by reality. To succeed, a new venture needs both iteration and agility. Establish an ongoing process for translating ideas into actions and results, followed by evaluation.

5. Cultivate integrity of communication. Passionate commitment to an idea can breed reality distortion. That is, aspiring entrepreneurs often see only what they want to see and rely on “feeling good” about their venture as their only measure of success. Commit to building the skills essential for high-integrity communication: curiosity, humility, candor, and scrutiny.

6. Build stamina and staying power. Contributing factors aside, most startups fail because they run out of money or time. To lengthen and strengthen your venture’s runway, aim to launch close to the customer and raise more money than you’ll think you need. Focus on building personal staying power, maximize learning, and improvements.

These principles will help keep you from falling into the passion trap. Bradberry defines this trap as a self-reinforcing spiral of beliefs, choices, and actions that lead to critical miscalculations and missteps which result in rigidly adhering to a failing strategy until it’s too late to recover. Entrepreneurs who fall into this trap usually don’t even see it coming.

According to Small Business Association figures, about six million Americans a year make the bold leap onto the startup path, with many more worldwide, and many have no corporate safety net to fall back on. Unfortunately, less than half of these new ventures survive beyond a few years. Too many of these have fallen into the passion trap.

Of course, passion is what real entrepreneurs live for, and they sometimes assume it can take them anywhere they want to go. But those who continually temper their passion with reality principles, and adjust their course, are much more likely to see success in getting there. Like the line from a country song, “if you don’t where you’re going, you might end up somewhere else.”

Marty Zwilling

10 Strategies For Boosting Your Productivity At Work

Every startup founder feels the pressure of the thousands of things that need to get done, all seemingly at the same time. There is just not enough time! The real solution is better productivity and less procrastination, to put you back in control of your business. You need to spend time on important things, as well as the urgent.

Many entrepreneurs waste too much time on low-priority administrative tasks, procrastinating on higher priority but tougher tasks, resulting in last minute crises, and failure to complete the critical work that people are really expecting of them. We all know people who profess to be stressed out and “so busy” that they never have time for anything – yet they never seem to get things done.

Dr. Jan Yager, a recognized expert on the subject of time management, addressed this issue in the classic edition of her book, “Work Less, Do More: The 14-Day Productivity Makeover.” Among other things, she identified ten general productivity principles to give you a competitive edge, which I have adapted here for entrepreneurs:

1. Control yourself well, but don’t try to control others. The key problem you need to solve first is “distractionitis.” This is the pain of the endless stream of email, phone calls, and daily crises which prevent any really important accomplishments, like closing customers. Being a good role model is productive, but trying to control others is fruitless.

2. Don’t try to do everything, or you may accomplish very little. Pareto’s law says you get 80% of your results from 20% of your efforts. Figure out what deserves your 20%, and focus on that. Start each day with the highest priority task you need done that day, and leave the emails and phone calls till the end of the day, if you have time.

3. Making the time to organize yourself will save you time. One of the top productivity killers is disorganization and wasting time trying to find something. Take the time to build a database of contacts, and structure your online filing system to include a total search capability. Hire an expert, if required, to automate repetitive tasks.

4. Aim for achieving excellence, but reject perfectionism. By definition, no human or any business is perfect, so achieving perfection is unrealistic and doomed to failure. The aim for excellence is laudable, but if translated to perfectionism, it becomes self-defeating and non-productive.

5. Understand and overcome procrastination. Fear of success and fear of failure are at the root of most acts of procrastination. Psychologists assert that procrastinators actually sabotage themselves. They put obstacles in their own path. They actually choose paths that hurt their productivity, and limit their success in business. Avoid these.

6. Pacing yourself will take you further than non-stop working. Rest makes you more productive. Get enough sleep so you can remain active throughout the day and evening. Build in “breaks” to your day, like scheduling lunch away from your desk, and going outside for a breath of fresh air every couple of hours.

7. Use your listening skills to become more efficient and effective. Maximize your own productivity by listening to what your team and your customers tell you they need and giving it to them. But still make the time to set high-level business strategy and objectives. Don’t waste time on nice-to-haves.

8. Productivity is a relative concept. Perception is reality in business. The most productive team members are the ones who consistently over-deliver, even though they have promised less. Productivity is perceived value per unit of time, and is not related to actual hours spent working, or working intensity. Productivity is quantifiable results.

9. Have clear measures of your productivity. If you can’t or don’t measure results, you can’t manage any activity or run a business. An entrepreneur’s ultimate task is to define success in term of results desired – number of customers, revenue, and profit. Without goals, there is no productivity to measure.

10. Delegate tasks, not relationships. Delegation of tasks to others who can do the work faster or cheaper is a productivity multiplier. But maintain the communication relationship with all key constituents. If you’re not talking to your key clients, customers, or vendors, you don’t have the relationships needed to manage productivity.

For entrepreneurs, after the idea, success is all about execution. Success in execution is all about productivity – more time, more money, more customers, and more satisfaction. If you find yourself working more, enjoying it less, and getting less done, it’s time for you to implement these new mantras for productivity.

Marty Zwilling

5 Perceptions On How Many Business Friends Are Enough

The Internet and social media have totally destroyed the meaning of the word “friend” and even changed it from a noun to a verb. On Twitter and Facebook, many young people follow hundreds of friends before age twenty, all without ever having physically said or heard a word from most of them. Facebook users with “whale” status (5,000 friends), are not even rare any more.

On the other hand, we shouldn’t confuse online friends with real friendships. Real friends help each other. In my experience, many of the people who “friend” me online today have only their interests in mind, and they aren’t interested in knowing me or helping me at all. Businesses ask customers and other businesses to “Like” them and “friend” them. Are these real friends?

According to most dictionary definitions, a friend is a person whom one knows, likes, and trusts. This definition seems totally lost on many people today. In my opinion, it’s impossible to know, like, and trust someone you have never met. Maybe that’s why so many people are hurt or defrauded every day by someone they assumed was their “friend” on the Internet.

So how many friends are enough for people? I did some scouting through the Internet to find any academic studies on the subject, and here are a few tidbits:

1. Everyone needs at least one friend. Most psychologists agree that starting from a very young age, a friend is critical to the building of social skills, and help develop a balanced view of morality, integrity, and right versus wrong. That’s why good parents play an active role in selecting others for their children to interact with as friends.

2. Limits of the human brain. Robin Dunbar, Oxford professor and anthropologist has posed a theory that the number of friends is limited by the size of the human brain, specifically the neocortex. “Dunbar’s number,” as this hypothesis has become known, is 150. Facebook cuts you off now if you try to exceed 5,000.

3. With age, count becomes less important than quality. By the time we reach 30 years of age, our desire to socialize and maintain friendships already is shrinking, according to an old study by psychologists at the Institute for Social Research (ISR). Fewer friends are often viewed as a good thing, and good friends are the real value.

4. Trusted friends are on the decline in our society. According to a more recent article, Americans’ belief that most other people could be trusted dropped from 77 percent to 37 percent in the last 30 years. My guess is this is more a statement of a decline in overall values, rather than people not needing trusted friends.

5. Although total friends are up, the number of confidants is down. Only trusted friends can become confidants. In the same survey above, people also admitted that confidants are down even more than trusted friends, by almost a third. To me, this follows from earlier points – it hard to have confidants when you don’t have friendships.

In these days of social networking and business networking, it seems that all cultural pressures point to more friends as being better. Yet lots of people like me, who are not so gregarious, find that real friendships take lots of energy. One is probably enough, and I can only handle a few comfortably. More leads to stress and drama.

With business clients and even peers that you believe are friends, you also have to remember not to break the first rule of business relationships, which is to quickly spill your troubles. In a business context in the real world, this is usually taken as a sign of weakness. Expose yourself to family and real friends; otherwise keep on your happy face.

So one of these days, when you are texting your “bff” (best friend forever), that you have never met, think about the meaning as well as the words you use. I fear that real friendships may be slipping from our grasp, and that is sad.

Friendship is the glue of meaningful personal relationships, and the lubrication that expedites business transactions. It’s not the number of friends, but the quality of the friendship that makes the difference. If you don’t want to be alone despite many friends, spend more time on quality, and less time counting.

Marty Zwilling