Wednesday, June 30, 2021

7 Ways To Raise Your Visibility As A Business Leader

potential-business-leadersBy definition, all of you entrepreneurs are leaders, by taking the initiative to start a new company. Yet I have learned over the years as a startup advisor that all business leaders are not the same. Some are great product leaders and innovative technologists, others are leaders in creating new business models, a few can assemble great teams, but only the rare exception can do all three.

Most investors will readily admit that they invest in entrepreneur leadership, more so than innovative ideas, but they often find it difficult to separate aspiring leaders from those that are clearly extraordinary. I often hear a list of high-level attributes, including determination, vision, initiative, and integrity, but these are hard to translate into specific actions.

Based on my own years of experience helping new businesses grow, I’d like to offer my own summary of some key lower-level action items, which I believe every business professional and entrepreneur can learn and practice to their advantage:

  1. Show ambition and a sense of urgency in every role. This means not only demonstrating that you can do whatever is required, but are also in a hurry to show that you are willing to change the underlying system and yourself to get better results than anyone else. That does require a singular focus, but also an awareness of the big picture.

  2. Visibly accept full responsibility and accountability. Extraordinary leaders never look for excuses or rationalizations when problems and challenges arise, as they will in every job or new business. As you do this, you will move from critic to cheerleader, from what is wrong to what is going right, and people will line up to help you tackle tough challenges.

    For example, a couple of years ago, Starbucks' CEO Kevin R. Johnson accepted full company accountability on Twitter for a racial profiling incident at a Starbucks in Philadelphia. He could have claimed that a fired employee was at fault, but instead he closed 8,000 of his stores for a day to provide additional employee racial-bias training.

  3. Create innovative change from existing resources. You generally don’t fix things by throwing them away and starting over. The most effective leaders marshal existing resources and incent people to create innovative yet competitive solutions. They understand the need to work within existing constraints, and think outside the box.

  4. Build community with team members and advisors. A community requires two-way communication and respect – including advisors, partners, and customers. The best leaders don’t just give orders – you work with people you depend on to build trust, give and accept coaching, and motivate by being a role model for the approach you espouse.

    Sir Richard Branson, for example, often makes a point of personally rewarding outstanding leaders by taking them aside and telling them that they are now in charge of one of his new companies. His Virgin Group today consists of over 400 companies.

  5. Be transparent in communicating your values and needs. Don’t try to hide your real direction or aspirations. True leaders don’t let their ego or competitive nature create a fa├žade. They focus totally on collaboration, highlighting the strengths of others, and celebrating joint successes. People will follow you if they know what you really want.

  6. Continually enhance your leadership through feedback. Just as your business needs feedback from customers, you need regular feedback from those around you on how to do better. That means accepting coaching and seeking mentoring, as well as giving it. Strive to evolve from guru to guide, coaching others to find their own answers.

  7. Espouse a higher purpose than profit or recognition. An acclaimed sense of purpose, such as feeding the disadvantaged, or helping the environment, creates an extra degree of engagement for team members and customers, and tags you as an extraordinary leader. The result is better team productivity, and greater loyalty from your customers.

In my experience, all businesses, especially startups, thrive on leadership, and die without it. No matter what your current role, you can use the themes and strategies outlined here to build and enhance your leadership image and business results. For you the payback is the satisfaction of greater impact, as well as new career opportunities. The time to get started is now.

Marty Zwilling

*** First published on Inc.com on 06/17/2021 ***

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Monday, June 28, 2021

6 New Venture Realities To Target Your Funding Effort

adam-somlai-fischerEntrepreneurs who require funding for their startup have long counted on self-accredited high net worth individuals (“angels”) to fill their needs, after friends and family, and before they qualify for institutional investments (“VCs”). The many crowd funding platforms on the Internet, led still by Kickstarter and IndieGoGo, were expected by many to put regular people in charge of funding new opportunities, and kill the need for angel groups.

I still don’t see it happening any time soon. Neither does David S. Rose, according to his classic book, “Angel Investing.” David is still one of the most active angel investors in New York, and also the CEO of Gust, which is an online platform for startup financing used by 800,000 entrepreneurs over the years, providing access to 85,000 angel investment professionals.

In fact, angel investing worldwide does seem to be leveling off at around $25 billion annually, while crowd funding is setting new records, achieving over $34 billion in 2020, despite the pandemic. Of course, both are impressive, but still small compared to over $300 billion from VC investments annually.

Nevertheless, according to Rose, both are poised for further growth due to online technology, and there is indeed plenty of opportunity. He does caution both entrepreneurs and investors to skip the hype and recognize the fundamental truths of the startup industry, before joining the crowd, or joining angels:

  1. Most startups fail. Small business statistics have long shown that the failure rate for startups within the first 5 years is higher close to 90 percent. Running out of money, or not getting funded is often given as the cause, but it’s often more an excuse than a reason. Thus investing in startups should always be approached as a low odds game.

  1. No one knows which startups are not going to fail. Even David Rose, who has invested in over 100 startups, and proclaims real success, reminds everyone that there are too many exogenous factors affecting business outcomes for anyone to be able to pick only winners. Professional venture capitalists will tell you the same thing.

  1. Investing in startups is a numbers game. Most startup investors today will tell you to put the same amount of money consistently in at least 20 to 25 companies, if you hope to approach a target 20 to 25 percent overall return. This is called the “portfolio approach,” which counts on hitting only a couple of big winners, while the others return very little.

  1. What ends up, usually went down first. Because unsuccessful startups tend to fail early, and big successful exits tend to take a long time to develop, graphing growth follows the classic J-curve. This means that winning investors need to spread their investments across a long period of time, as well as across a large number of companies.

  1. All startups always need more money. It doesn’t seem to matter what the founders’ projections are, or how fast they believe they will turn profitable. They will need more money. Thus every serious investor reserves a certain amount of his investment capital for follow-on rounds, which allows them to stay to course to success, even with dilution.

  1. If you subscribe to truths one to five, startup investing can be lucrative. There is a rarified brand of successful investors who can show average IRRs of 25 percent or greater over the years. Investing can be satisfying, if not lucrative, for the rest of us, for keeping up with technology, as a give-back to entrepreneurs, and building a legacy.

Angel investors have long been required to "certify through signature" that their net worth or income qualifies them to become accredited, so their burden and risk haven't changed yet. Some investors fear that the recent general solicitation rule will lead to bank statement or tax return disclosures, increase their burden, and may cause qualified angels to back out of the process.

Angel groups fear the loss of members for the same reason. Here again, the entrepreneur will be the one hurt most, by having fewer funding sources to access. I predict that angel investors, who are generally early adopters, will actually be quick to adapt to the new requirements and online systems, and will operate side by side with the new influx of non-accredited investors.

After all, investors of all types who fund entrepreneurs, starting with friends and family, have always been all about creating win-win situations. The investor wins only when the startup wins, and today’s angels can only cover about 3 percent of funding requests. We have a long way to go, in this new era of the entrepreneur, before angel investors aren’t needed.

Marty Zwilling

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Sunday, June 27, 2021

9 Key Issues That Can Support Your Breakthrough Ideas

Elon Musk, serial entrepreneur, at TED2013: The Young, The Wise, The Undiscovered.  Wednesday, February 27, 2013, Long Beach, CA. Photo: James Duncan DavidsonThe entrepreneurs I see are always talking about “disruptive innovation” ideas, but the plans I read are more often linear extensions of a current hot offering, like one more social network with the best of Facebook and Twitter, one more dating site dimension, or another “must-have” accessory for smartphones. Perhaps hard questions need to come before ideas, rather than after.

This approach was highlighted in the classic book by Warren Berger, “A More Beautiful Question,” which makes the case for the power of questions to spark breakthrough innovations. He and I agree that the most creative, successful business leaders tend to be expert questioners. They master the art of inquiry, raise questions no one else is asking, and find powerful answers.

Berger suggests nine key questions, which I have adapted for entrepreneurs and startups, from his focus on existing companies. Every smart entrepreneur needs to ask himself and his team these questions before charging down the road to meet the other ninety percent of his peers that fail:

  1. What business are we really entering? Many aspiring entrepreneurs, especially engineers, are focused on their invention or technology, and never consider the challenges of entering the business realm until too late. Hydrogen auto engines, for example, have tremendous advantages, but haven’t cracked the bureaucracy of government regulations, the power of existing energy companies, and big auto biases.

  1. Why have other smart people failed on a similar idea? All too often I hear the refrain that big existing players, like Microsoft or IBM, are too fat and slow to be real competitors. While these companies do have their challenges, they also have some of the smartest people out there. You need to question strongly why these failed on your innovation.

  1. What will happen if we build it and no one comes? The “unthinkable” questions need to get asked before the crisis. Customers always have alternatives, most notably continuing to do what they do today without you. Asking the hard questions early will force more thinking outside the box, and improve the potential for real breakthroughs.

  1. What if we could become a cause and not worry about profit? Every startup should start with a set of values that would fit the definition of a good cause. The new age of consumers, and the new age of young employees want to align themselves with good cause principles. Figure out what you are against, as well as what you are for.

  1. How can we create the best test, and assume the need for pivot? Your first offering will likely be a learning experience, rather than a run-away success. Plan to make it the best experiment that you can, with metrics to focus on the “why,” as much as “what.” Create a safe environment for your team to question every aspect of the offering.

  1. If we brainstorm in questions, will lightning strike? Collaborative thinking in problem solving and early planning is essential because it brings together multiple viewpoints and diverse backgrounds. Innovation flourishes when diverse ideas and thoughts are aired. Tackle the startup unknowns by generating questions instead of generating solutions.

  1. Will anyone follow if we initially embrace uncertainty? Entrepreneurs are normally all about giving answers, not admitting uncertainty. They are reluctant to take advantage of questioning input from outside advisors, investors, and even friendly customers. Business leaders from Google, Netflix, and others have uncertainty built into their DNA.

  1. Should our mission statement be a mission question? The declarative mission statement is usually seen by the team as non-questionable, thus limiting business thinking. In these dynamic times, it may be appropriate to take that static statement and transform it into more open-ended, fluid mission questions that can still be ambitious.

  1. How do we create a culture of continuous inquiry? The first mistake is not wanting a culture of inquiry, in today’s age of continuous change. Some leaders and entrepreneurs don’t want to continually explain and rationalize their actions. The challenge is to reward questioning by your actions, culture, hiring, and the way you treat customer feedback.

If you want more specifics as well as the theory behind it, I recommend Berger’s book as a practical system of inquiry that can guide you through the process of innovative questioning, helping you find imaginative, powerful answers and building the culture of continuous innovation.

Disruptive innovation is always hard, and takes a very special breed of entrepreneur who is willing to ask the hard questions, as well as listen to tough questions from advisors, team members, and customers. How effective are you and your business in asking more “beautiful questions” and sparking the breakthrough ideas you need to survive?

Marty Zwilling

*** Ukrainian translation provided by Anna Matesh ***

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Saturday, June 26, 2021

7 Ways Of Using An Immigrant Culture In Your Business

immigrant-culture-in-businessAs a long-time advisor to new entrepreneurs here in the USA, I’ve long been impressed with the number that come here from other countries, and the positive traits that most of these seem to bring with them. Logically, I would expect these non native-born entrepreneurs to be at a big disadvantage, having to learn the culture here, local idiosyncrasies, and new relationships.

Yet, I find them often jumping to the forefront, with many notable successes, including Elon Musk (South Africa) at Tesla, Sergey Brin (Russia) at Google, and Arianna Huffington (Greece) at the Huffington Post. All of these seem to display a common set of traits, which I believe should be high on the priority list of every entrepreneur and business professional:

  1. Use multi-cultural insights and unique experiences. I find that most new business innovations are ideas from one discipline or culture, applied to another. Immigrants may have an advantage here, but everyone has to opportunity to apply what they know to different contexts, and all must continually broaden their thinking and knowledge base.

    A good place to start is to choose to support a higher purpose, common to all cultures, such as protecting the environment, or helping the underprivileged. For example, TOMS Shoes pledges to match every pair of shoes purchased with free pair for a child in need.

  2. Look at the world as today’s global market. With the advent of the internet, every opportunity is global, since every customer can see you from anywhere in the world. That means you need to tune your advertising, business model, and product features to meet multiple cultural norms, and have the broadest appeal. Think and act like a world traveler.

    That doesn’t mean that you should try to rollout your business globally with your limited initial resources. But it does mean that every move be made with a global consideration. For certain, don’t choose a long-term strategy that does not scale from local to global.

  3. Willing to make a serious commitment to a project. I still find too many people looking for a “side hustle,” hobby, or shortcut to success. Building a business requires hard work and sacrifice, so no part-time or just-for-fun efforts are likely to succeed. People starting with nothing in this country expect to have to work harder and longer to get ahead.

  4. Go out of your way to meet and learn from others. Creating and growing a business today is no place for the lone inventor. In this world of rapidly evolving technologies, as well as changing customer expectations, it is hard for anyone to keep up with all they need to know. Success means seeking complementary partners and relationships.

  5. Practice persistence in overcoming all obstacles. Every new business starts as an unpredictable series of challenges, so winners need a “never-give-up” mindset, and always living outside their comfort zone. Perhaps immigrants come with an advantage here in adapting to the unknown, but with passion, we can all climb any mountain.

  6. Thankful for every small success along the way. It’s hard for anyone to stay positive and moving forward, while encountering a never-ending series of challenges. It’s key to celebrate each step of progress, and even failures, for the opportunity to learn. People who have had a long hard road before the business, tend to appreciate each progress.

  7. Realize that a business requires much time and effort. Aspiring entrepreneurs need to all understand that starting a business is not for short-term returns. Investments all have risks, and require a bold commitment of key resources. People moving to unfamiliar environments understand this investment mentality, and are focused on a desired result.

From a business perspective, every professional needs to recognize that their domain is now global, not local, and expand their thinking and learning accordingly. This applies not only to finding customers, but also to manufacturing, financing, and future growth. It starts by not giving your company a name that means something totally offensive in some future important market.

In summary, there is no reason that people coming to your country from another one should have an advantage in business. If you adopt the right mindset, and do your homework, you too can compete in their domain, as they can in yours. Expand your focus and learning today, and we all win.

Marty Zwilling

*** First published on Inc.com on 06/12/2021 ***

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Friday, June 25, 2021

6 Success Stages Every Entrepreneur Idea Has To Pass

business-ideas-stagesIt seems like everyone wants to be an entrepreneur and get rich these days. As a business mentor, I sometimes feel besieged by people begging for my view and support of their latest idea. In reality, I like most ideas, but I have to tell them that the real challenge is taking the inspiration from a dream to a business reality. All the evidence says that over 99% fail to make that leap.

So a better question than asking about the quality of an idea, is asking about the quality of your plan to implement the idea. There are lots of resources available for that question, including the Internet and mentors like me. It’s really a multi-step process, with the first step getting you from an idea to a viable product, and the remaining steps creating a sustainable business.

As an example of a good resource, I enjoyed the classic book, “Idea To Invention,” by Patricia Nolan-Brown, that does a great job on the key steps. Here is my interpretation of her realistic process for deciding and then actually taking your inspiration from an invention idea to a sustainable business:

  1. It all starts in your head (think it). Start with what you know, but think outside the box. As you think and explore and imagine the possibilities for new products, remember that it should have a broad opportunity, appeal to people who have money to buy, and needs to have pizzazz to get people’s attention in this age of information overload.
  1. Now get real (cook it). Before you get too excited, it’s time to do some homework. Find out if something very similar is already selling, and who your competition would be if you proceed. Ask some potential customers to see if there is real interest, and start thinking about price versus cost. Look hard at the technology for feasibility and risk.
  1. Keep thieves away (protect it). Limit your disclosures to people you trust, and learn the use of non-disclosure agreements (NDA). File at least a provisional patent and one or more trademarks. Be wary of crafty shysters who will flood your mailbox with official-looking mail offering to help for a fee, or demanding fees you forgot to pay.
  1. Make ‘em want it bad (pitch it). “Pitching” is the insider term for presenting your product idea to people who could conceivably buy it or fund your efforts. Start by developing an “elevator pitch” that you can deliver in 30 seconds to hook a potential investor. Attend trade shows and network to find the right players and pitch your product.

  1. Factory in the garage (make it). This is the point where you work on the specifics of being able to deliver your product or service. Relevant questions include the type of business entity (LLC or C-Corp), licensing or manufacturing, sales and marketing, and staffing. It’s also time to build prototypes to make the product come alive.

  1. Continuous improvement (replace it). Once you have a real product, and it’s actually selling itself online, or on store shelves, you may think you can just sit back, relax, and collect your riches. But remember that complacency kills, and you always need to be thinking of the next product iteration, new territories, and new competitors.

Thus you see that framing your idea is the first of at least six steps in making it a business, and probably less than one percent of the entire effort required. Now you see why no one should judge business success potential by the idea alone. I’ve heard the pitch for many million-dollar ideas, but I haven’t seen anyone pay that for one yet.

In fact, the common element in all these steps is “you.” Investors learned this a long time ago, so most will tell you that they invest in people, not ideas. They safely assume that an entrepreneur with the right attributes will start with a great idea, and spend their time honing and presenting a great plan to deliver, leading to a successful business.

You don’t need the intelligence of a genius to cash in on your dream, and you don’t have to be born with special genes to be an entrepreneur. But you do have to be passionate, positive, determined, and a problem solver to get it done. Talkers and dreaming without follow-through will fail. Are you ready to cash in on your inspiration, or are you comfortable in the other 99 percent?

Marty Zwilling

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Wednesday, June 23, 2021

8 Ways To Ensure Customer Interactions Are Memorable

memorable-customer-experienceAs a consumer, I rarely pay attention to your marketing pitch, but I certainly always remember a exceptionally positive total experience with your team, based on a memorable set of interactions from first contact to discussions with friends. Yet, as a business consultant, I often find minimal focus on improving employee engagement and assessing their customer-facing performance.

For example, I commonly see metrics to keep track of revenue per employee, overtime, and absenteeism, but I don’t often see measures of overall customer satisfaction with individual employees. I assure you that even one or two employees with bad attitudes or lack of customer attention can override the best efforts of everyone else.

These days, it’s critical and not that difficult, to upgrade your focus on delivering exceptional customer experiences from every team member, all the time. Here are my recommendations for training and managing your team to keep their delivery memorable for customers, as well as profitable for your business:

  1. Hire team members who enjoy customer interaction. I find that many managers are expected to hire new team members primarily on the basis of technical qualifications and years of experience, rather communication ability, attitude, or previous customer reviews Remember that everyone will interact with customers, due to billing or delivery issues.

  2. Provide training, tools, and required decision authority. No customer will give you positive marks if employees can’t resolve an issue, or just pass you to the next level. At any Ritz-Carlton, for example, employees are trained well, and authorized to spend up to $2,000 per guest, without pre-approval, to solve a guest issue or improve a guest's stay.

  3. Incent and reward employees who delight customers. Incentives should be a combination of metrics and recognition to highlight results. Studies show that peer recognition programs are often more effective than bonuses or cash rewards. If you provide recognition for the right behaviors consistently, the desired results will accrue.

  4. Make sure all have the opportunity to meet customers. Every employee needs to understand that great customer experiences make your business, and to feel they are contributing. In the old days, key employees were rotated through all roles as part of their training, to help them understand the business. That approach still is meaningful today.

  5. Communicate and be a role model for customer focus. Employees need to be regularly reminded of your business mission, brand positioning, and customer focus, and they need to see you acting these out in your day-to-day behavior. It’s called walking the talk. You need to treat your employees just as you expect them to treat customers.

  6. Build customer relationships to supplement surveys. Today I see too much dependence on surveys, and not enough real customer interaction by business leaders. Relationships get the body language to supplement numbers, and provide critical feelings not found in surveys. Relationships also build loyalty, get referrals, and drive more sales.

  7. Under-promise and over-deliver on customer requests. Customers always remember positive surprises, and they never forget negative ones. I’m still impressed when a package arrives a day earlier than promised, or I get a free promotion with my order. Pleasant surprises don’t have to be big – like how fast you return a phone call or email.

  8. Sponsor experiments to create memorable elements. Don’t let your customer interactions go stale. Customers enjoy fresh perks to give them something to talk about, and make your business stand out. Encourage employee innovation in service, just like you must always be looking for ways to improve your product offerings.

For example, a few years ago, TD Bank wanted to thank their customers in a memorable way for being their customers. They did so by temporarily transforming their ATMs into "automatic thanking machines" that dispersed gifts, as well as money.

More and more, I see that companies with the most fiercely loyal customers and the best image in the marketplace provide the most memorable overall customer experience, not just the lowest price or the best quality product. That customer experience is the best competitive advantage you can have, and the best predictor of long-term success. Today is the time to start down that road.

Marty Zwilling

*** First published on Inc.com on 06/09/2021 ***

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Monday, June 21, 2021

8 Reasons To Initiate A Startup While Career Probing

startup-versus-careerIf you are one of the many professionals still trapped between jobs by circumstances outside your control, or are about to dump the loser job you have now, you should be actively defining and starting your own business, in parallel with looking for that ideal job. Let me explain why this is a win-win deal, no matter what the outcome.

You have probably secretly always wanted to run your own show, but with an existing job, never took the time to consider a startup. Then there was always the risk of failure, which of course doesn’t apply once your real job is gone. Also, for most of us, not having done it before, we have no idea where or how to start.

Here are my top recommendations on how and why initiating a startup while looking, or about to be looking for a job, is the right thing to do:

  1. No gap in your resume. Instead of an embarrassing gap in your resume for your period out of work, you have an entry for your startup business, showing initiative, leadership, and breadth of experience.

  1. Fun learning experience. It’s more fun tackling the challenges of a startup in between job search activities, than sitting around feeling sorry for yourself and waiting for status callbacks on interviews (which seem to have gone out of style).
  1. Explore finding a business partner. Unless you are a true loner, you need someone like-minded but complementary in skills to help you with the startup plans. It’s always good to have someone to test your ideas, keep your spirits up, and hone your business skills. Now you have a reason for talking to people who may become lifelong friends.
  1. Learn how to incorporate a business. First, pick a name for your company and do the paperwork on starting a Limited Liability Corporation (LLC). Almost anyone can handle this without professional help, and the cost is less than $100 in many states. It shows everyone you are serious, and limits your liability on any mistakes.
  1. Practice developing a business plan. Pick a startup business that you can do for minimal cost, like a services business with the skills you have. With simple software available today, find a domain name and implement your own website. Use social networking and blogging to get your message out. You don’t even need an investor.
  1. Get business cards made. Nothing says you are serious about a business like handing out professional business cards at local events and Chamber of Commerce meetings. Do them on your home computer for a few dollars. Offer to help a couple of customers free, just to get your act together and your presence known.
  1. Have startup efforts to highlight in job interviews. Work your startup efforts into every job interview and application. It will definitely show off your energy and vision, and will make you a more competitive candidate for any role.
  1. Give yourself a choice – job or your own business. Obviously, at some point you will need to decide whether your startup business is better than the job opportunities. That’s good because it’s always nice to have an alternative, rather than feeling that you just have to take the first dead-end job offered.

There are other startup related points I could make here, like joining an existing startup as a “volunteer” for a time, just to learn more about what is required. Also, in most geographies, there are organizations springing up, and university workshops, to mentor people out of work and contemplating a startup. Get some help from them if you need it.

Just remember that problems are really often opportunities in disguise. Don’t miss out on what may be the best opportunity you will have in your lifetime for a new career. Start up now.

Marty Zwilling

*** Kazakh translation provided by Alana Kerimova ***

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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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