Sunday, June 20, 2021

5 Ways To Turn Business Connections Into New Ventures

business-men-connectionsI often hear the popular notion that successful entrepreneurs are built from a single heroic insight or a single innovation. This is just plain wrong. The business world is a symphony of players and elements that only works when everything interconnects harmoniously. Continuous innovation and continuous learning are required for any sustained connection and success.

I’ve long believed these principles, but I’ve never been able to explain them as well as my friend Faisal Hoque, with Drake Baer, in their classic book “Everything Connects.” Hoque’s great insights on how to transform businesses in this age of creativity, innovation, and sustainability are based on his serial entrepreneur experiences, as well as his study of Eastern philosophies.

Here is my extrapolation of his many lessons and messages into five essential strategies for making the connections in business that can lead to success as a business executive or an entrepreneur:

  1. Learn to work with people and build strong relationships. Nobody succeeds as a “Lone Ranger” in business. Finding people and building the relationships you need requires effort, and is a key component in moving every business forward. Equally important is avoiding people who bring you down, waste your time, or have no interest.
  1. Root out ideas by cultivating curiosity. Curiosity is the best catalyst for business creativity, learning, problem solving, and ideas. Ideas are the beginning of a strategy. The continuous discovering, planning, and implementing of ideas is the only path to sustainable innovation. Nurture the people in your relationships who have curiosity.
  1. Connect with your target audience. Today’s innovative “social economy” requires emotional attachment that links customers to your products, as opposed to competitors, and translates into sustainable growth. A simple, inspirational product and brand message is far more influential than one which highlights product features and functions.
  1. Accelerate sustainable growth. Creating a unique product and a unique brand isn’t enough. It takes repeatable sales processes to create a scalable business. Accelerating this growth requires continuous innovation, improved collaboration, visionary leadership, and an inspired and positive relationships with all your constituents.
  1. Create tangible long-term value. Every business transaction has consequences. The positive ones are called value. Short-term consequences are usually quantitative, and long-term ones are more qualitative. The most sustainable way to create long-term value is to continually invest in your capabilities both as individuals and as an organization.

In business, as in life, success won’t happen without good people relationships. To better build and nurture your people connections, here are some top line principles from the book which I espouse:

  • Be honest. It’s the only way to create and maintain trust and respect.
  • Be direct. Direct communication leads to direction, the path you set as a leader.
  • Think ahead. You need to surround yourself with forward thinkers, and listen.
  • Inspire and influence. The best and brightest will be toppled if they can’t inspire others.
  • Create a community. You need cross-pollination and collaboration from the ecosystem.
  • Think long term. Leaders must be aware of the present moment while setting their sights on long-term goals. Purpose must be a part of the present and the future.

For entrepreneurs, the road to success is always a longer one than you anticipate. An old Chinese saying comes to mind that when you’ve made it 90 percent down the path, you’re halfway to your destination. That last 10 percent of making the right connections is the other half of your journey. Are you thoroughly prepared to facilitate your own success, and the success of your company?

Marty Zwilling

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Saturday, June 19, 2021

5 Keys To Ethical Solutions To Tough Business Issues

Covid19_vaccine_pfizer_2Many people seem to have the sense that ethics are spiraling downward in business, and unfortunately most startup professionals and entrepreneurs I know don’t believe they can make a difference. They don’t realize that if they don’t take an active role in the solution, they really become part of the problem.

I do believe that most business people want to do the right thing, but many just don’t have the skills to develop an unemotional ethical position, or confidence to act on their ethical beliefs, or simply are not sure how to go about making a difference in their daily actions, without jeopardizing their own career.

Most people didn’t need tools a while back to agree on the ethical problem with Lockheed bribing foreign officials to get business, but many may come to different conclusions on how safe a startup’s innovative new child car seat has to be before it is sold. If people are dying of Covid every day, how many clinical trials should be required for a new drug that clearly saves some lives?

I found some good analytical tools on how to sharpen your own ethics sense in the classic book by Mark Pastin, “Make an Ethical Difference.” Pastin has experience with many organizations around the world on ethics issues, and I like his practical steps to get beyond the emotion and the theoretical, to pragmatic yet ethical solutions for tough problems:

  1. Identify the ground rules of the all parties. When a situation presents an ethical issue, look beyond the actions of individuals, groups, and organizations to uncover the ground rules of each that help explain their actions. Only then can you understand what you have to change to be a successful ethical change agent.
  1. Reason backward to find the interests. Summarize the possible outcomes, and reason backward from each to find what interests each outcome will serve and for whom. Unstated or hidden interests are often the key to resolving ethical issues. Support outcomes that advance many interests without violating any ground rules.

  1. Face the relevant facts. Look for facts that all parties, irrespective of their ground rules and interests, will agree upon. Then look for non-debated facts, and finally contested facts. The acid test for each fact is that if it were true, would it change your judgment as to what is right in the situation. Now you have the potential to make an ethical difference.
  1. Stand in the shoes of affected parties. Once you understand who is affected, reduce the distance between you and them. Pick ones that differ from you the most and meet with individuals or group members. Verify or reject each interest and ground rule. You remove obstacles to the functioning of the ethics eye by bringing its objects closer.
  1. Use the global benefit approach to rate possible outcomes. Ask which course of action produces the greatest balance of benefit over harm for all concerned. You first ask who counts, then what counts, as a benefit or harm in considering the possible outcomes. Any action with great benefits without violating ground rules could be the right one.

Real agreement in ethics only exists when what your ethics eye shows to be the right action matches what the ethic eyes of others see as the right action at the same time. Thus these steps are part of an iterative convergence process that all relevant parties must follow to reach the right solution. Pastin provides examples of this process transforming good ethics into decisive action.

It does work, but in all cases each of us has to accept at the outset that our own ethical perspective may be the one that changes in the process of seeking ethical agreement. There is no room in any business decision for hard unbending positions, with closed eyes and ears and an open mouth.

If you and I disagree about ethics, there are only three ways to reach agreement. You change your mind. I change my mind. Or we both change our minds. When you undertake a sincere process of seeking ethical agreement, two of the three options for doing so involve learning and changing your mind. But how does that differ from every other challenge where you have made a difference in moving your startup forward?

Marty Zwilling

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Friday, June 18, 2021

7 Essential Steps From A Lone Entrepreneur To Success

lone-entrepreneurYou can’t win as an entrepreneur working alone. You need to have business relationships with team members, investors, customers, and a myriad of other support people. That doesn’t mean you have to be a social butterfly to succeed, or introverts need not apply.

It does mean that you need to look, listen, and participate in the business world around you, and network through all available channels, like business-oriented social networks online (LinkedIn), local business organizations (Chamber of Commerce), and events or conferences in your school or industry.

I hope all this seems obvious to you, but I still get a good number of notes from “entrepreneurs” who have been busy inventing things all their life, but can’t find a partner to start their first business, and others trying to find an executive, an investor, or a lawyer.

What these people need is more relationships, not more experts, more blogs, or more books. So I thought I would drop back to some essentials in building and nurturing business relationships (most of these apply to personal relationships as well):

  1. Build your network. These are people of all levels that have been there and done that, meaning people who know something that you need to know. See my article from way back “Entrepreneurs Learn Best From Business Networking” on how and where to get started. You don’t need a thousand friends, but a few real ones can make all the difference.

  1. Give and you will receive. Relationships need to be two-way, and can’t be just all about you. If you are active in helping others with what you know, they will be much more open to help you when you need it. The more you give, the more you get in return, both literally and figuratively.
  1. Work on your elevator pitch. This is a concise, well-practiced description of your idea or your startup, delivered with conviction to start a relationship in the time it takes to ride up an elevator. It should end by asking for something, to start the relationship.
  1. Don’t skip all business social settings. Face time is critical, even with the current rage on social networks, phone texting, and email. Studies show that as much as 50-90% of communication is body language. That’s usually the important relationship part.
  1. Nominate someone as your mentor. Build a two-way relationship with several people who can help you, and then kick it up a notch with one or more, by asking them to be your mentor. Most entrepreneurs love to help others, and will be honored to help you.
  1. Cultivate existing allies. These are people who already know and believe in you, but may not be able to help you directly in your new endeavors. But don’t forget that each of these allies also has their own network, which can be an extension of yours, if you treat them well.
  1. Nurture existing relationships. We all know someone who claims to be a “close friend,” but never initiates anything. They never call, they never write, and wait for you to make the first move. If you don’t follow-up on a regular basis with someone, there is no relationship, only a former acquaintance.

On the positive side, many attributes of an introvert lead to better business decisions, such as thinking before speaking, building deep relationships, and researching problems more thoroughly. Mark Zuckerberg, Facebook founder, is currently the most famous introvert entrepreneur, so don’t let anyone tell you it can’t be done.

One of Mark’s secrets seems to have been to surround himself by extroverts like COO Sheryl Sandberg, and people who have a complementary energy. But working alone doesn’t get you very far. It takes a team to win the game of business, so take a look around you to see how you are doing so far.

Marty Zwilling

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Wednesday, June 16, 2021

6 Indications Of A Dysfunctional Leader In A Startup

dysfunctional-leaderFounders almost always cite lack of money as the reason for failure, but if you look deeper, I believe the reason is more often about dysfunctional people and leadership. Sometimes it comes right back to the founder, in terms of a malaise often called “founder’s syndrome.” A few years ago I was intimately involved with a promising startup that taught me about this issue.

I’ll be short on specifics here, to protect the guilty, but I hope you get the idea. It’s not a disease, but it can kill your startup. You can find a more complete discussion of founder’s syndrome on Wikipedia, but here are a few of the “symptoms” I observed in the founder and CEO in this case:

  1. Advisors and staff hand-picked from friends and connections. Personality and loyalty are apparently the key criteria, rather than skills, organizational fit, or experience. The executive is looking more for cheerleaders, rather than people with real insights and ideas.
  1. Reacts defensively and talks constantly. Sometimes it's time for quiet listening rather than talking. A strong and confident leader will always realize that a defensive response before the input message is complete does not impress investors, nor anyone else on the team.
  1. Staff meetings are for one-way communication. This founder holds staff meetings only to report crises, rally the troops, and get status reports on assignments. There is no concept here of team strategy development, and shared executive agreement on objectives.
  1. With no input and no “buy in” from the team, sets extremely ambitious objectives. These objectives are set based on the desires and dreams of the founder, with no recognition of technical realities, costs, or time required.
  1. Over time, becomes more and more isolated and paranoid. The first clue is some veiled comments about the motives of staff members, advisors, and investors. These become more specific as the situation gets more dire, to the point where key members begin to desert the ship in disgust.
  1. Highly skeptical about planning, policies, and advisors. Claims "they're overhead and just bog me down." The founder perception is that his experience is more applicable than the input of others, and formal planning and policies are just a way of introducing unnecessary bureaucracy.

In the beginning, we all found our startup founder to be dynamic, driven, and decisive. He had a clear vision of what his organization could be. He seemed to know his customer's needs, and was passionate about meeting those needs. Just the traits one would expect for getting a new organization off the ground. However, he had other traits, including the ones listed above, which became major liabilities.

The undoing of the company began when a potential investor, after months of search, was ready to put up $1 million, but made it clear that his firm would likely need to replace the founder with someone with more credentials and experience in this industry. With that revelation, the founder killed the investment deal, and every other potential deal which raised the same issue.

Of course, no situation is this simple. There were product development problems, pricing problems, and early customers who demanded more features and delayed contractual payments. The ultimate result was a startup founder who exhausted his personal funds, drained the investments capability of friends, and drove away the team one by one.

For me, this is a most frustrating and difficult problem for any advisor or team member to deal with, since communication and learning can only occur when someone is open and listening. If any of you out there have seen this, or have some experience or ideas on how to deal with this situation effectively, let me know. You can be a hero if you have the cure.

For all you founders out there, if you find this article anonymously taped to your computer, it might be time to take a hard look at yourself in the mirror. We can’t change you, but you can change yourself. It could save your startup!

Marty Zwilling

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Monday, June 14, 2021

7 Ways Your Message May Be Lost On People That Matter

people-did-not-hearOne of the most important things I was slow to learn in business was that real communication only happens when your audience finally hears and understands what you think is a perfectly clear message. As a business executive and leader, I found that meant I had to repeat most communication several times, in different contexts, before all members of my team really heard it.

I’m sure that you, as a manager or team leader, have felt the frustration of hearing feedback comments like “I wish someone had told me” or “I didn’t know you wanted that.” Unfortunately the comments you don’t hear from customers, business partners, and peer leaders are the ones that do you the most damage. Here is my list of the most common ways that key messages get lost:

  1. Lack of trust and confidence in you by receivers. People do not really listen to someone who does not have their trust, and will routinely discount any message value. Thus you must work on relationships first, before attempting to provide leadership, guidance, and direction to receivers. Confidence and trust lead to agreement and action.

    Evidence continues to mount that companies with trusted leaders, such as Zappos, tend to outperform others in financial results, as well as team satisfaction, by as much as three to one. That alone is enough reason for every leader to keep building good relationships.

  2. Neglect to set the context for the message. The responsibility is on you as the communicator to make sure your intended receivers are ready to receive your message, meaning that they are listening, and understand your priorities and values. We are all overloaded with data from all directions, so first you have to get their attention focused.

  3. Too much dependence on lingo and jargon. Don’t assume that team members and customers have the same familiarity with technical abbreviations that you do. Use clear and concise language, aimed at a medium grade level, or people will ignore the message as incomprehensible or insulting. Test your message on a spouse or family member first.

    Follow the examples of two top technical leaders today, Elon Musk and Jeff Bezos, who have established reputations not only of being innovative thinkers, but also effective communicators who believe in clear, concise messages with no technical jargon.

  4. Not using transparency, honesty, and full disclosure. People sense quickly when you are withholding partial information, perhaps in an effort to protect them or mislead them. This negates the message, erodes trust in you the deliverer, and causes people not to listen in the future. Assume that all your messages with be cross-checked and validated.

  5. Failure to address assumptions and culture. Effective communication always requires consideration of language barriers, gender and age norms, and media protocols. For example, you would never use the same words and tone in an email, text message, or on social media. Be aware of the demographics and role of all recipients, and play to it.

  6. Not controlling background noise or distractions. Carefully pick the right time and place for key messages. Don’t bury them in so much information that attention spans are exceeded. Carefully manage the environment so that people are not distracted by other activities or noise that may override the recognition and retention of your key points.

  7. People do not agree, and ignore the message. Intended receivers who totally disagree with a message will claim they never heard it, or actually not remember it, unless you repeat it often and rephrase it to match their context. It is to your advantage to tune your message for maximum fit to their perspective, and full awareness of their concerns.

It’s important to remember that as a business leader, your impact and effectiveness is directly related to your ability to deliver messages and communicate exceptionally well. Of course, delivering messages is not just saying the right thing, but also listening, writing, body language, and practicing what you preach. Fortunately these are skills you can learn and practice.

The acid test is the feedback you are getting, or not getting. No questions does not always mean that everyone has heard and is acting on your message. Maybe it’s time to be more proactive in follow up, seeking feedback from others about how you can communicate more effectively.

Marty Zwilling

*** First published on Inc.com on 05/31/2021 ***

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Sunday, June 13, 2021

A Few Kids Lead In Business, But Most Need Your Help

Princess_party_business_coachI continue to see stories of really young entrepreneurs, like this article, profiling 25 kids that made a million dollars before graduating from high school. This makes me wonder what starts that entrepreneurial drive in kids, and how early parents and schools should start teaching the basics.

There are already some good books out there for youth entrepreneurs, such as the classic one from my friends Adam and Matthew Toren, Kidpreneurs: Young Entrepreneurs with Big Ideas. They assert, "It's never too early! Even children can be introduced to basic business principles and the rewards of entrepreneurship”. Another one is Kid Start-Up: How YOU Can Become an Entrepreneur, by Mark Cuban, Shaan Patel, and Ian McCue.

Even if you are not sure that your child is a budding entrepreneur, there are several practical reasons to introduce him or her to the basics of business. Here are a few facts from the National Council on Economic Education emphasizing the need for more business training, starting much earlier:

  • More than 1 in 6 students in the USA do not have a baseline level of financial literacy.

  • Nearly 1/4 of millennials spend more than they earn.

  • 67% of Gen Y have less than 3 months-worth of emergency funds.

As early as grade school, with parental guidance and resources like these books, kids can gain some valuable experience in starting, managing, and growing a successful business venture. The positives include:

  • Learn to make money. Even young children (ages 5-10) can and need to understand the concept of income – expense = profit. They need to understand that having money is not an entitlement, and not related to the volume of their demands.

  • Start a summer business. The best way to learn is a “hands-on” approach like creating a simple business to sell lemonade or deliver newspapers. In this context, parents can explain how their own business works, and where the family income comes from.

  • Bring the family together. All parents need to do things with their kids. A family that grows together, builds character and achieves financial success. The entire family can be active in the business venture.

  • Understand how business works. A place to start may be a reality game like ThriveTime for Teens Board Game, where they will be faced with money and life decisions like buying cars, managing expenses, paying for college, using credit cards, buying stocks and starting businesses.

  • Able to invest money wisely. Several companies, like Charles Swaab, offer programs like Money Matters: Make it Count, which teaches the financial basics to teens through Boys & Girls Clubs across the country.

If your child is old enough to get on the Internet, he or she is old enough to start learning business skills. Many education organizations provide free online tools to help students explore the world, increase intercultural awareness, and participate in a community of like-minded international teen leaders. It’s not a big jump to e-commerce and the costs and decisions of running a business.

We all know that technology comes naturally and early to this generation. Gen-Y and Gen-Z are already showing us new ways to use it to grow and profit in business. I can’t even imagine what the next generation will bring. You better start your business now, and have fun while you can, before we are all branded as ancient relics.

Marty Zwilling

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Saturday, June 12, 2021

Entrepreneurs Are Needed To Make Web Searches Smarter

Web-3.0Soon you should be able to ask your browser or smart phone context-specific questions like "Where should I take my wife for a good movie and dinner?" Your browser would consult its intelligence of what you and she like and dislike, take into account your current location, and then suggest the right movies and restaurants. If you are the first to deliver this, your startup might be the next Google!

This has been a long-time dream of Tim Berners-Lee, the man who (really) invented the World Wide Web. He calls his dream the ‘Semantic Web’ (or Web 3.0), meaning it understands user context. He and many other experts believe that the Semantic Web will act more like a personal assistant than a search engine.

If you add the next generation of natural language processing (NLP), you will be able to ask Google Voice Search or Apple Siri the questions right through your smart phone. The system will compile your interests in your local storage, so the more you use it, the more it learns about you, and the more relevant will be the results.

These virtual personal assistants still have some work to do to meet the key attributes that we have grown to expect from a live personal assistant. Here is an entry-level benchmark for the new software personal assistants:

  • Simple and intuitive communication. A personal assistant must be able to understand intent and context, as well as learn common acronyms and shorthand phrases, whether written or spoken. Siri is a step in this direction, but still has very limited learning and context sensing abilities.

  • Technology environment savvy. A good assistant know how get things done efficiently, recognizing user hardware and software limitations. In today’s mobile hardware environment, that means able to set up meetings, convert text messages to voice, find contact information quickly, and search the Web intelligently for outside info.

  • Memorable personality. Every personal assistant has to deal with a variety of moods and people every day. This requires a pleasant, outgoing personality, with politeness and respect always. They must also be able to balance courtesy with assertiveness when necessary to insulate you from unwanted solicitation and other distractions.

  • Good organizational skills. A personal assistant must be highly organized and detail-oriented. That means total handling of the calendar, scheduling appointments, taking calls, logging messages, screening e-mail and doing other duties with some sense of priority and problem-solving.

I believe the current major drive to mobile devices and apps has slowed the progress toward this new semantic environment, but it’s coming. Of course, many are still fighting it as well, due to privacy concerns. In my view, the increasing consumer demand for personal marketing and personal assistants will soon overcome paranoia, and reasonable boundaries will emerge.

There are already many examples of startups edging into this space. On the basic search engine front, WolframAlpha is an amazing computational engine often used by Siri, which creates intelligent results, graphs, and reports from any natural language question. But we are a long way from agents that can do full natural language processing from voice and think on their own.

Current advertising and public relations startups are already poised along these lines, all the way from clothes shopping, art galleries, online advertising, to managing press releases. In some ways, these aren't that different from the old Amazon.com "recommendation engine," which suggests new products based on your surfing and buying habits, but they go much further.

Just think of the fertile ground all this opens for startups! If you’re looking for that ‘million dollar idea’ to build a plan around, here is your chance. But don’t wait too long, because the din for the Semantic Web is getting louder and louder. Catch the wave soon or it will pass you by!

Marty Zwilling

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Friday, June 11, 2021

6 Keys To Reducing Team Pain From Market Uncertainty

business-team-stressOver my years as an advisor to new businesses and startups, I have learned that the only certainty that I can offer entrepreneurs is the fact they will face many uncertainties. So my first advice is that if you can’t handle uncertainty, don’t even start down that road. On the other hand, entrepreneurs have a reputation for being one of the happiest and healthiest career paths around.

Your team members, despite what you may think is reasonable, often suffer more than you as a founder from uncertainty in the workplace. However, I’m convinced that you can mitigate many of these anxieties by your actions, so I was pleased to see similar insights in a new book, “Anxiety at Work: 8 Strategies to Help Teams Build Resilience, Handle Uncertainty, and Get Stuff Done.”

Authors Adrian Gostick and Chestor Elton, with their deep backgrounds as executive coaches and organizational consultants, recommend some simple methods, consistent with my own beliefs, to reduce the pain of uncertainty, and increase productivity, in your teams and employees:

  1. Make it okay for them to not have all the answers. As a business leader or manager, it’s important that you acknowledge as a role model that you nor anyone has all the answers. You must clearly delineate between issues where answers are known, such as process problems, versus market challenges, where forces are unpredictable.

    One approach I suggest is to encourage structured debates on issues, first admitting that your ideas may be wrong, and encouraging their input, without penalty if they don’t have answers, or their suggestions don’t work. This leads to a minimal anxiety environment.

  2. Loosen your grip during ambiguous situations. Many of us have a tendency to micromanage and become more controlling during high-visibility uncertain challenges. This typically causes more anxiety and stress for all, and reduces thinking outside the box, creative efforts, and the risk taking necessary to get to the best solution. Listen first.

    It’s also critical that you stay positive during stressful and uncertain situations. Your positivity will keep the stress level down, and the productivity level up for everyone on the team, including yourself. You will be the role model, and people will follow your lead.

  3. Ensure everyone knows what’s expected of them. Anxiety will be ratcheted up when team members see constantly changing or non-specific targets, or no guidance on how to achieve their goals. When times are uncertain, measurement timeframes should be short. Good job descriptions are a start, but regular feedback and active listening are a must.

    As a general rule, if an employee is asking questions about minutia, it’s fair to assume that they are unfamiliar with the process, and they need more training or coaching. Don’t assume that what is common sense to you is equally obvious to all team members.

  4. Keep people focused on what can be controlled. When team members concentrate their thoughts on what they can’t control, such as an economic downturn, anxiety grows. Don’t use unreachable targets to push teams to their limits. Help team members realize what they cannot change, and restructure their to-do lists to other valuable contributions.

    Help your team to recognize that sometimes, all they can really control is their effort and attitude. When you put your energy into the things that you can control, you'll be much less stressed, and much more productive, as a manager or an employee.

  5. Show a bias to action and how to accept risk. It’s always necessary to make decisions and move forward, even in the face of uncertainty. Analysis paralysis and perfectionism have no place in today’s rapidly changing environments. Make every forward movement a learning moment, no matter what the outcome. Show humility and own your mistakes.

  6. Don’t be afraid to deliver fair, tough coaching. The best constructive feedback includes specific ideas for improvement, instead of generalities, along with meaningful praise in the right measure. Constructive feedback minimizes uncertainty by clarifying expectations, and builds confidence that one can improve and be recognized.

Overall, it’s important to remember that business uncertainties lead to the opportunities for you to win competitively, and succeed in the long run. Your challenge is to resolve these challenges more quickly and more effectively for your customers. To do this, you need a team that is excited and motivated by the challenges. Make it a win-win situation for them and for your business.

Marty Zwilling

*** First published on Inc.com on 05/27/2021 ***

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Wednesday, June 9, 2021

10 Hints That Now May Be The Time For A New Venture

business-startup-ideasMany budding entrepreneurs struggle mightily with that first step – out of their comfort zone and into the unknown. They keep asking people like me whether the time is right, and the truth is that there’s never an ideal time to start your own business. It’s like starting a personal relationship, if you wait for exactly the right time, you’ll never do it.

I’ve talked to many experts, and everyone has his own view of the right personal attributes, and the right business conditions to jump in. In my own view, the recovering pandemic economy is ripe for new startups, but successful startups are more about the right person, than the right idea or the right climate. So the real challenge is looking inward to check your alignment with these clues:

  1. Running a business is a passion you crave. This is a necessary, but not sufficient reason to start a business now. It’s not the same as “I want to change the world (volunteer for a good cause)” or “I’m tired of the corporate grind (take a vacation).” It does mean you have a compelling new business idea, and a willingness to face risk.
  1. You know what needs to be done, and not afraid to make the decisions. This is the right context for being your own boss. You get great satisfaction from overcoming all obstacles, and you have no problem with living or dying by your own decisions. You have never had a problem putting together a plan and making it happen.
  1. The opportunity to make real money excites you. You have read all the stories of Google and Apple hitting on a great idea, beating the odds, and being worth millions in just a couple of years. You like the idea that most of the money you make will be yours, not just merged into corporate profits.
  1. You believe the economy has tilted the odds in your favor. The recent pandemic has definitely opened up opportunities for new products, and skilled people at lower costs are abundant. Many of the great entrepreneurs of the past started their companies near business recessions and disruptions.
  1. You get to set the deadlines, and manage your own priorities. You have always felt that you can do more than expected by current bosses, if allowed to do it on your own schedule with your own milestones. Your self-motivation is more effective for you than any arbitrary rewards and even salary increases.
  1. You get to do the interesting things, for a change. First of all, the business you intend to set up is your dream, not someone else’s. Within that context, you can delegate or find partners for things that bore you, like marketing, rather than feel that you have been assigned to do the least interesting work.
  1. A variety of challenges stretches your abilities to the maximum. If you love to learn new things, and are stimulated by change, you will love the new business environment. Every day is different, from dealing with creative elements, to financial challenges, marketing and sales, and customers of every type.
  1. Your office would be where you want it. Many entrepreneurs enjoy working from their home, where they are more comfortable, and can interact better with their family. Some like an old eclectic loft downtown, or a local coffee shop to minimize the commute. In these days of global links, you can run the business from halfway around the world.
  1. What you envision doesn’t seem all that hard to you. In fact, the cost of entry into most businesses has come down greatly in the last twenty years. You can now start an e-commerce site for $100, or develop software applications for smart phones for a few thousand. The right reason to start a business is because you have done your homework, and are convinced that you have the skills and knowledge to do it easily.
  1. You are really ready for a second career. This is especially applicable to Boomers and anyone who has had a successful career, but now ready for a new challenge, with a little time on their hands. The good part of having your own business is that you don’t even have to give up your first job to start the second.

If a few of these reasons are calling your name, now is the time to start building your business. There's no better time, especially if people around you are hesitating. It means you'll be facing a lot less competition. What are you waiting for?

Marty Zwilling

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Monday, June 7, 2021

7 Keys To The Best Internet Name For Your New Venture

internet-domain-nameI’m sure you have all been frustrated at least once by not being able to get the Internet domain name you want for your company. Who owns all of these names, and should you ever buy one for a premium? The simple answer is that if you want to be found on the Web, the perfect domain name can be well worth a few thousand dollars, but don’t pay a fortune for one.

The market for domain investors has taken a big step down in the last few years, since the Internet Corporation for Assigned Names and Numbers (ICANN) has rolled out top-level domains for every country, like .us and .me (for Montenegro), as well as allowing companies to set up their own top-level domains. For instance, BMW now owns all domain names ending in .bmw.

Gone are the days when people like Frank Schilling and Kevin Ham built $300 million empires by speculating on premium domain names, since the possibilities are now endless. Yet people still pay big money to get the name they want. Recent examples include Christmas.com selling for $3.1M and Angel.com selling for $2M.

The right place for startups is to target today's average of approximately $10-$20 per year for a .com domain name from GoDaddy or one of the hundreds of other domain name registrars. Certain extensions such as .tv and .vs range in the $20 to $40 range for a year registration, but you may be able to find sales on other extensions for as little as fifty cents per year.

So how do you decide if you should be looking at the low end or the high end of these ranges? I suggest following these steps to get the name you need for your business:

  1. First pick the right company and matching domain name. The names don’t have to match, but it sure makes branding and recognition easier if they are at least similar. Starting and name a company today is a world-wide decision. Make sure the names don’t have negative and even obscene connotations in another language.
  1. Register the name and related suffixes, if available. Registration of the domain name is easy and simple through most hosting sites, if nobody already owns it. It may be a good idea to also buy between three and twenty names with spellings and suffixes that are close to your primary address, or that could be confused with it.
  1. Rename your company to match an available domain name. With today’s pervasive Internet searching and shopping, the domain name may well be more important than your company name. As a startup, cost to rename your company and change existing collateral may be less than dealing with unmatched names or premium domain pricing.
  1. Otherwise, find the owner. With 150 million names already in use, chances are someone else may have already snagged your favorite. First you have to find the current owner, using WHOIS, or other lookup functions available on the net. Ask if the domain name is for sale, but don’t tip your hand by making a specific offer.
  1. Negotiate for the name. Contemplate your available budget, the potential value of the name to you, and the range of possible prices mentioned above. Then decide whether you are game to complete the negotiation yourself, or whether you should consider an intermediary, like DomainAgents, and expect to pay a 10-20% commission fee.
  1. Consider leasing or lease to own. If the price is too high, work with the domain name owner to agree on a “lease-to-own” deal for the domain name. This will allow your company to build some assets before committing the capital. Prices may continue down, or in the worst case, you won’t need the name for the long term.
  1. Get the agreement in writing as quickly as possible. Once you have a deal, immediately open up an escrow account, like Escrow.com. The faster you fund the account the better chance you have of the seller not being able to back out. Remember that many domain moguls don’t have a sterling reputation, so no handshake deals.

Whether by crafting a great new name or wresting one from a previous owner, every new business needs to master the domain game early, and it need not break the bank. Spending big money up front, or changing domains down the line are both painful and costly. Have you done the proper homework on your preferred domain name?

Marty Zwilling

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Sunday, June 6, 2021

6 Reasons Starting Another Dating Site May Be Tough

online-dating-mobileOnline dating sites usually fail because online dating usually fails. The simple reason is that everyone expects quick results, no one can make that happen, and users get very unhappy very quickly. Even the main industry rag, Online Dating Magazine, admits that the success rate is a mere one percent, compared to an estimated fifty percent for startups in general.

I certainly understand why everyone wants to take a shot at it – the “need” is huge. In the U.S. alone, the target demographic for these services is 125 million singles that are between 19 and 65. Then there are the forty percent of frequent users that are already married. Some say that’s a billion dollar “recession proof” opportunity. The spend is still going up.

But make no mistake about it, this is a tough and oversaturated market to enter at this stage. Here are six key reasons, from a business perspective:

  1. Direct competition is huge. There is no opportunity for “first mover” advantage here. The same Online Dating Magazine estimates that there are more than 1,500 online dating services online in the U.S. alone, with 1,000 new online dating services opening every year. Some estimates say there are up to 8.000 competitors worldwide.

  1. Online dating fraud is on the rise. Online dating fraud rose by 150% percent in the last couple of years as scammers and hucksters turned up the false charm and predatory trolling, according to a recent article from the FTC. Lawsuit claims and Nigerian con artists are up, and disillusionment is growing. The honeymoon is over.
  1. Entry cost is very high. This business suffers from what Paul Graham calls the ‘chicken and the egg problem‘ – no one wants to use a dating site with only a few users. So sites have to invest heavily in viral marketing to achieve critical mass, which competes with current social networks, while users expect to join both for free.
  1. Intellectual property is tough. It’s hard to invent and patent more “scientific” methods on how to match people. Most people, especially women, don’t even want to feel like they can be ‘matched’ by a computer. E-harmony.com has already defined the 29 DIMENSIONS® of compatibility several years ago -- how many more could there be?
  1. Social networks. “Social networking” is really the new term for dating, with mega-sites like Facebook, and the hyperlocal site Foursquare. After all, isn’t dating all about making new “friends,” and finding them in all the right places? The latest is Facebook Dating, unveiled a couple of years ago, to help you find the perfect match on the social network.
  1. Sophisticated search engines. I’m already seeing search engine parameters that can match image features, so singles will soon be able to search cyberspace for their ideal partner, without the need to join any dating site. How about the next generation search engine, answering the question, “Who is my ultimate soul mate?”

Perhaps I shouldn’t suggest that no one can win in this space. However, because 99 out of 100 fail, and because some have an unsavory reputation, you won’t find many angel or VC investors who are interested. Plan to focus on that other popular tier of investors – founders, family, friends, and fools.

Certainly if you expect to get any traction in this market, you need some real innovation. The trend is to more mobile and niche markets. But you better hurry, because potential winners like Farmers Only, Herpes-Date.com, and DateMyPet are already taken.

So please don’t send me any more business plans along these lines, looking for investor funding, with no marketing budget, and promising huge returns. Investors are looking for real innovation, not copycats with more bells and whistles. So are customers. Let’s give it to them.

Marty Zwilling

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Saturday, June 5, 2021

6 Keys To Recognizing Business Bubbles Ready To Burst

bubbles-ready-to-burstIn finance, a bubble is too much money chasing assets, greater asset production and a herd mentality. In startup business plans, a bubble is too many entrepreneurs and too many investors chasing the latest “next big thing,” like Google search engine, Facebook social network, or Amazon e-commerce site. In all these cases, a bust is inevitable, and everyone may lose.

The big question is how to spot these bubbles and jump to a better alternative, rather than get sucked into the vortex. Vikram Mansharamani provided some great insights on the financial side in his recent book, “Boombustology: Spotting Financial Bubbles Before They Burst,” and I believe these can be equally applied to bubbles for startup growth opportunities as follows:

  1. Avoid the herd mentality. In theory, this is called the “emergence of group order” or swarm mentality, where everyone rushes in without regard to whether there is enough food to go around. For startups, investors usually toss out business plans with ten or more competitors, especially if a couple have the penetration of a Facebook or Google.
  1. Overconfidence. In finance, “this time is different” is the beginning of a new bubble. In startups, it is the idea that “this solution is different,” without sufficient analysis of base anchoring features, differentiation features, or no new early adopters. Change is always hard, so people already on Amazon are not easy convert to another e-commerce system.
  1. Supply and demand ignored. We all believe that supply and demand meet to create stable prices (reflexive). But sometimes higher prices create higher demand, causing a boom. Busts result when lower prices stimulate more supply. In startups, a great success like Google causes busts by stimulating more supply, without regard to demand.
  1. Cheap money. The Austrian school of economics asserts that “cheap money is the root of all evil” as an explanation for all boom and bust cycles. This also works for startups, where cheap money occurs when too many investors jump on a bandwagon. Experts argue that a higher percentage of startups fail with too much money, rather than too little.
  1. Policy-driven distortions. Government actions sometimes meddle with normal supply and demand equilibriums, or money allocations. In startups these days, governments are incenting health and alternative energy solutions, to intentionally create a bubble. All too often, that leads to a bust for startups who have not adequately prepared or executed.
  1. High valuation, low profit. A sure sign of a bubble is when assets are artificially valued high, without a corresponding intrinsic value or cash flow. Social media darling Twitter is an example of these bubbles. In my opinion, now is not the time to bet your startup on another Twitter clone.

Every startup wants to be the one to start the next bubble, but these are impossible to predict. It’s much easier to spot current bubbles, and resist the urge to build a “me too” product. The focus should always be on execution, revenue, and profits. Vision, growth over profit, and eyeballs won’t do it every time. Startups that master iteration, momentum, and the ability to pivot will win.

I’m personally looking to Gen-Y as the source of the “next big thing,” that will become the next bubble. To the rest of us, new great things often start out looking like toys, and Gen-Y knows their toys. In addition, they have less baggage, more creativity, and already understand the market segments with the most buying power.

I also believe we are beginning a new wave of startup investing, now that the pandemic appears to be behind us. Angels are becoming more aggressive as their stock market and real estate assets recover, and institutions again have earnings to risk in venture capital funds. It’s a good time to start some new bubbles and win. Don’t let the fragile old ones burst your bubble as well.

Marty Zwilling

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Friday, June 4, 2021

Search Engine Ranking Can Make Or Break Your Business

search-engine-rankingProbably every one of you who has a business and a website have been approached through email or personal contact, and asked to spend money on paid search results (appear on the first page of search results, despite low SEO rank). What most people don’t realize is, according to recent statistics, despite top positioning, only a quarter of sites selected comes from paid search.

Thus I recommend that you stick with organic search, and use SEO to raise your ranking. Paid search engine ranking (PPC) is just buying advertising for your business. Their computers then merge your ads with search results when users search words imply an interest in your products. If you sell widgets, and a user is searching for widgets, your ad will appear on the first page.

This is NOT the same as or better than Search Engine Optimization (SEO). SEO is not placing ads, but tuning your website so that it is more highly ranked by Google, and featured in the first page of results, not in an ad beside the results. PPC is sometimes called “buying your way into search results.” Both have the same end goal of getting people to your website.

With PPC, the goal is for the search user to not only see your ad, but to click on it to get to your website (click-through), and buy your widget (conversion to sale). In this context, there are many parameters and concepts you need to understand before you buy advertising:

  • Cost per impression (CPI). This cost model is the most like traditional newspaper and television advertising, where advertisers pay for each ad appearance or page-view (impression) on a search result page, even if the user pays no attention. For Google, this is pay per impression (PPI), or pay per mille (PPM) per thousand impressions.

  • Cost per click (CPC). In this more popular model these days, advertisers do not pay for each appearance of the ad, but only when a user clicks on an ad and is redirected to the advertiser website. For sites displaying the ads, this is called pay per click (PPC).

  • Cost per action (CPA). Another alternative was added a couple of years ago to mitigate the problem of people clicking just to get paid (click fraud). It pays only if a customer clicks through AND takes a further action (conversion), such as buying a product or filling out a web form. The display side is called pay per action (PPA) or pay per lead (PPL).

  • Keyword research and budget forecasting. All these models start with the advertiser choosing the right search keywords to match user searches. Popular keywords have higher costs. PPC experts charge you to research, analyze, and estimate hit ratios, to optimize your success and set a campaign spending budget for you.

  • Campaign setup and ad copy writing. There are many additional variables that the inexperienced marketer may not even think to consider: competition and positioning strategies, budgeting, match types, search and content syndication, and ad copy testing, as well developing the best ad wording and layouts.

  • Tracking and performance reporting. Advertising is all about getting the most results for the least cost. You may be getting great traffic, but poor conversions. Other PPC experts will track your campaign from click to transaction, providing you with detailed reports on and return on investment (ROI).

If you do all these things right as a search results advertiser, you will make money from selling your product. If you do all these things right by displaying other people’s ads on your website or blog, you will make money from advertising – like Google and Facebook, who offer services for free, and still make millions in revenue.

But either way, it requires big numbers to work (traffic), click-through rates are small, and the pay per click is tiny. Until your traffic is in the millions of page-views per month, don’t expect to live off the conversions or other people’s ads. For credibility with investors, stick to the organic SEO model and other revenue streams until you have the high traffic to survive on PPC revenue.

Marty Zwilling

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Wednesday, June 2, 2021

6 Key Rules To Stay Competitive In The Digital World

digital competitionIn case you hadn’t noticed, the key elements of a competitive advantage for your business have changed as businesses move online, and your domain is instantly global. The old approaches of controlling distribution channels, saturating retail, and methodically scaling your brand awareness don’t protect you anymore. The real challenge is to win massive consumer preference repeatedly.

As a business advisor, I have to recommend even to established companies that they review and revamp their competitive strategy now, even if it appears to be working today. I like the summary of the competitive reality in a new book, “Rethinking Competitive Advantage: New Rules for the Digital Age,” by Ram Charan, who relates a wealth of current experience from global clients:

  1. Customers expect a personalized experience. Features, availability, and brand are just the price of entry. Customers today quickly get beyond these, and put a competitive priority on the experience of others, reflected in reviews and social media, and their own total experience with your sales process, delivery, returns, and support on their schedule.

    As a simple example, the Wal-Mart website now shows shoppers more products that they may like, based on previous purchases. The Wal-Mart home page is customized for each shopper based on location, local weather, and the customer search and purchase history.

  2. Algorithms and data are required to compete. Manual tracking and occasional surveys won’t keep you competitive in today’s high volume and rapidly changing market. Today’s digital leaders all have a digital platform – a set of algorithms stitched together to collect and analyze key data, and tune their algorithms dynamically for every transaction.

    You need a platform that is comfortable with the global scope of today’s market, with it’s wide range of social and economic cultures, trends, and needs. Simple metrics and your personal knowledge of the industry can’t keep up with all the relevant competitive forces.

  3. You need to be part of a larger ecosystem. Apple pulled ahead of other mobile phones in its early days largely because it cultivated an ecosystem of software developers who created iPhone apps to meet every consumer niche and need. Amazon attracts third-party sellers with tools and processes that make then all winners in the marketplace.

    In many cases, growing the ecosystem is so important that your best competitive move may be to invest in facilitating “competition,” such as Tesla Motors giving away their battery patents to other auto providers, without royalties, to build the ecosystem.

  4. Find funders who seek long-term returns. Money-making is different in the digital age. Short-term earnings per share may be low, even as revenues and cash burned are high. Look for investors and organizations who practice 10x or 100x thinking, rather than earnings-per-share (EPS) every quarter. These tolerate negative cash flows for growth.

    That means that many companies are now forgoing the rush to go public (IPO), in favor of major equity investments from specialized venture capital funds, such as Japan’s SoftBank. These have the vision and the resources to fund long-term digital success.

  5. Create a team culture for personalized service. Breaking work into bite-size missions and giving teams the autonomy to figure out the “how” leads to faster, better decision-making. If you have more than three organizational layers below the top executive level, you may not be ready for digital competitors. Select new hires with attention to values.

    Jeff Bezos at Amazon credits much of his success to this approach. He often talks about how he has learned how to disagree and yet commit to creative proposals from his teams, due to trust and the level of confidence he has for their customer insight.

  6. Leaders must constantly create change as a barrier. Competitive leaders today must be hungry for what’s next and willing to create and destroy. They need the mental capacity to imagine a future space that doesn’t exist, and the confidence to overcome whatever obstacles they might encounter, using AI, data, teams, and algorithms.

One thing hasn’t changed in the business world – competition. It’s now more intense than ever, with the cost of entry going down, and new players easily able to join the fray from anywhere in the world. Thus it’s more important than ever that you keep up with the latest trends and rules. Don’t be lulled into a false sense of security that what worked yesterday will work tomorrow.

Marty Zwilling

*** First published on Inc.com on 05/20/2021 ***

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