Friday, December 31, 2021

7 Keys To Positive Solutions For Business Conflicts

business-conflictsMany entrepreneurs are not prepared for conflict, or actively avoid it. Their vision, passion, and focus are so strong that they can’t imagine someone disagreeing, much less fighting them to the death. But the reality is that startups are composed of smart people, with emotions as well as intellects, working in close proximity under much pressure, so conflicts will occur.

In fact, most business conflict is constructive and should be embraced in steering through the maze of innovation and change that is part of every successful business. Surround yourself with “yes” people, and you may feel good initially, but the brick walls no one mentions will hurt later.

On the other extreme, constant and unmanaged conflict will quickly drive your startup to be dysfunctional. Here are a few simple principles leading to constructive conflict resolution that I espouse, as summarized from the classic book by Peter T. Coleman, “The Five Percent: Finding Solutions to Seemingly Impossible Conflicts:”

  1. Know what type of conflict you are in. The first step is to assess whether the conflict is win-lose, win-win, or mixed (some competing and some shared goals). Each of the three types requires different strategies and tactics. Learning how to identify and respond to each type is central to success. Try a good business mentor to get you on the right track.
  1. Not all conflicts are bad. Most often, conflicts present us with opportunities to solve problems and bring about necessary changes, to learn more about ourselves and the business, and to innovate – to go beyond what we already know and do. Avoid the ones that are irrelevant to your startup, but don’t hesitate to engage in the others.
  1. Whenever possible, cooperate. Research has consistently shown that more collaborative approaches to resolving win-win or mixed-motive disputes (the majority of conflicts) work best. Therefore you should always approach conflicts with others as mutually shared problems to be solved together.
  1. Be flexible. Try to distinguish your position in a conflict (“I need a raise”) from your underlying needs and interests in the relationship (“I want more respect for my contribution”). Your initial position may severely limit your options. Creativity and openness to exploration are essential to constructive solutions.
  1. Do not personalize. Try to keep the problem separate from the person when in conflict (do not make them the problem). When conflicts become personal, the rules change, the stakes get higher, emotions spike, and the conflict can quickly become unmanageable.
  1. Meet face-to-face and listen carefully. Meet in a neutral location, and work hard to listen to the other side in a conflict. Accurate information is critical, and careful listening communicates respect. This alone will move the conflict in a more friendly and constructive direction. Don’t mistake sending text messages and emails as listening.
  1. Be fair, firm, and friendly. Research shows that the process of how conflicts are handled in usually more important than the outcomes of conflicts. Always attempt to be reasonable, respectful and persistent, but do not cave in. Find a way to make sure your needs are met.

Applied correctly, these methods can move most business conflicts in a positive and satisfying direction. But Coleman asserts that there are five percent that will always be “intractable.” These usually involve issues that won’t ever be resolved in the workplace, and should be avoided, like politics, religion, personal enmity, and cultural biases. Your best bet on these is not to engage.

For the rest, you must engage (avoidance just hardens positions and delays the consequences), and you must bring closure to the argument or conflict. Closure in business should include formalizing the result in a written document, with clearly outlined terms and activities, and follow-on milestones as required.

The most successful entrepreneurs are creative and skillful in handling conflicts, and actively seek constructive conflict with key stakeholders. The result is better decisions, more consensus, and better communication. In business, as in life, real change rarely happens without some pain. Learn to deal with it.

Marty Zwilling

Wednesday, December 29, 2021

6 Ways To Make Your Solution Stand Out Above The Rest

chelseamarket_marketingI’m often surprised when you as an aspiring entrepreneur, looking for investors, tell me your solution is so innovative that you don’t have to worry about differentiating it from competitors, and customers will flock to it without a real marketing campaign. Unfortunately, what I see in this Internet age is information overload, and new product differentiation is harder than ever before.

In this context, based on recent feedback, over 30,000 new products get introduced every year, and 95 percent fail, primarily because they don’t stand out over existing alternatives. Thus I recommend that every new business owner needs to really develop and execute a strategy for getting noticed in the marketplace, no matter how unique and impactful they see their solution.

Here are some suggestions for winning strategies that I see in use today:

  1. Enlist experts and influencers to make your case. Customers today feel they are too savvy to believe your marketing pitches, so they look around to see what other credible people are saying about your offering. These include recognized social media influencers, industry experts, and even early customers. Perception is better than reality.

    For example, when Children's Place was looking for brand awareness for their solution, Kidpik, they found the best way to reach the target audience of young girls was by enlisting a small army of pintsize social-media stars, rather than conventional advertising.

  2. Focus your marketing on real customer value. Skip the old-fashioned marketing hype, such as “leading the market,” “next generation,” and “more user friendly.” Concentrate on providing real data demonstrating value and return in actual scenarios, from existing customers. Case studies, supporting videos, and giveaways still work well in this regard.

    For auto owners, Discount Tire has found that repairing simple tire punctures free and checking inflation gives real value to customers, who then return when it’s time to replace worn out tires, or bring in the car for other maintenance. I now use them exclusively.

  3. Target most relevant customer segments first. Don’t confuse and dilute your potential customer base by weakly trying to appeal to all. As an example, a high fashion customer has little in common with a bargain shopper, so don’t even try to appeal to both. For maximum impact, hone your differentiation strategy even before you build your product.

    The first step in this regard is to define your target market, and size the opportunity for growth and potential. As an investor, I often see entrepreneurs with passion for their innovation, who haven’t realized that their market is highly fragmented or limited.

  4. Personalization is the ultimate differentiation. If you can allow customers to personally configure the product they get, you should highlight this ability for memorable differentiation. Today’s generation of customers assign value to uniqueness, flexibility, and a perfect fit, so this is a competitive advantage you can highlight with credibility.

    Of course, it’s still a requirement to balance the cost and scalability of personalization against the value of this differentiation. On the other hand, it's easy to overlook the value of personalization because it either seems too simple or too complex to bother.

  5. Grow customer relationships versus transactions. In today’s ease of global communication, people buy from people, not from companies. By actively participating in social media and customer support channels, you can differentiate by building advocates and loyalty. Actively ask for feedback, and provide rewards for participation.

  6. Show your commitment to a higher purpose. Customers today are more socially conscious than ever before, which is a great trend. Find a social or environmental issue where you can make an impact, and make that your differentiation. This also works well in getting a greater level of engagement and productivity from your own employees.

Remember, the days are gone when you could assume that “if we build it, they will come,” no matter how innovative your solution. Effective product differentiation requires a continuous marketing effort and strategy, to find a place in the hearts and minds of your targeted customers, and drive the growth and success you always dreamed of for yourself and your business.

Marty Zwilling

*** First published on Inc.com on 12/15/2021 ***

Monday, December 27, 2021

9 Routes To A Startup Success With Minimal Invention

coffee-shop-StarbucksAs an advisor to startups and entrepreneurs, I often hear the myth that all new businesses must start with a great idea. I have to disagree. I believe the best entrepreneurs start by finding a large opportunity, and only then use good ideas to capitalize on that opportunity. The best opportunities are recognized from painful needs, plus a growing population of customers with money to spend.

For example, technologist entrepreneurs often come up with a new device or application, just because they can, and assume everyone will want one. Social entrepreneurs pitch me their latest idea for eliminating world hunger (producing algae), but may forget that really hungry people probably don’t have any money. It takes a real selling opportunity to sustain a business idea.

You will find specifics in a classic book, “The Entrepreneur’s Playbook,” by Leonard C. Green, which supports my view, and is full of practical advice for aspiring entrepreneurs, including easy ways to identify sure-bet opportunities, most not requiring any invention, before you finalize your innovative business idea. Here are some approaches that both of us recommend to get you started:

  1. Take a basic product and make it special (upgrade). Premium bottled water (Fuji), expensive coffee (Starbucks), and gourmet cookies (Mrs. Fields) are examples of what were once pedestrian products that have driven successful new businesses. Sometimes you need to take a commonplace item, like a cup of coffee, and make it an “experience.”
  1. Offer a no-frills version of a high-end product (downgrade). For example, Southwest Airlines eliminated all the frills that usually come with an airline ticket, and now they are a market leader, being copied by the majors. In supermarkets, everyone today knows that generic brands often offer more value and quantity, without giving up key ingredients.
  1. Find products that seem to fit together (bundle). Instead of requiring people to shop and pay for related items, combine them into one package. Today’s smartphones are more attractive than a separate phone, camera, computer, and software packages. Sometimes just including training and installation makes a product more attractive.
  1. Break existing bundles into separate packages (unbundle). This is obviously the inverse of the bundle approach. Home computers have long been offered in unbundled as well as bundled hardware and software, to allow for a lower entry cost and flexible configuring versus simplicity. Long-term warranties are now unbundled from appliances.
  1. If a product sells in one area, transport it to another. Importers/exporters make their living this way with products from different parts of the country or the world. The same concept resulted in the birth of franchises, which are essentially proven business models transported to new locations. The Internet is a business for transporting web services.
  1. Expand a narrow product offering to the mass-market. A popular incarnation of this approach today is to take an Internet-only product into brick-and-mortar retail for access to a much larger audience. The same concept applied to every startup which test-markets its product in a local area, then scales the business for national or global access.
  1. Take a broad-appeal product into a niche. With the widespread popularity of social media, I now see many businesses looking at niche market interest groups, such as sites for travelers, hunters, cancer support, and crafts. In television, this is called narrow-casting, to gear specific channels to a special audience, like golf, old shows, or history.
  1. Maximize the selection of products offered (think big). This approach brought us the “big box” stores, including Walmart, Lowe’s, and Home Depot. Online, the same concept has been implemented by Amazon and Alibaba. It allows customers to complete their shopping in one place, and businesses get the value of volume and common processes.
  1. Focus on in-depth expertise and support (think small). This is the inverse of the “think big” strategy, which you see at your local hardware stores, with knowledgeable and friendly support staffs. They specialize in the depth of their selections that a true connoisseur demands. Online sites now advertise customized designs and personal fits.

It shouldn’t be hard to see from these examples the wealth of business opportunities available without inventing a totally new product or technology. Thus I continue to tell entrepreneurs that business success is more about the execution, and the quality of the team, rather than the idea.

Also, by looking at the size of the opportunity, you can take a calculated risk, rather than close your eyes and step into the total unknown. Calculated risks are less likely to be fatal, and more likely to be fun and profitable. Think about it before you send me your next business plan to change the world.

Marty Zwilling

Sunday, December 26, 2021

5 Venture People To Avoid While Funding Your Startup

venture-capitalist-negotiationEvery entrepreneur seeking funding loves the challenge of getting customers and investors excited, but dreads the thought of negotiating the terms of a deal with potential investors. They are naturally reluctant to step out of the friendly and familiar business territory into the unfamiliar battlefield of venture capitalists from which few escape unscathed.

In reality, a financing negotiation is not a single-round winner-take-all game, since a “good” deal requires that both parties walk away satisfied -- with a win-win relationship. Brad Feld and Jason Mendelson, in their classic book “Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist” emphasize that there are only three things that really matter in this negotiation: achieving a good and fair result, not killing your personal relationship getting there, and understanding the deal that you are striking.

To be an effective negotiator, I agree that you first need to quickly identify and adapt to your opponents negotiating style. Feld and Mendelson identify the five most common negotiating styles that you will see on both sides of the table, and talk about how you can best work with each of them:

  1. The Bully (aka UAW negotiator). The bully negotiates by yelling and screaming, forcing issues, and threatening the other party. They usually don’t understand the issues, so they try to win by force. Unless this is your natural negotiating style, their advice is to chill out as your adversary gets hotter.
  1. The Nice Guy (aka used-car salesman). This style is pleasant, but you always feel like he’s trying to sell you something. While he doesn’t yell at you like the bully, it’s often frustrating to get a real answer (need to talk with the boss). For these, be clear and direct, and don’t be afraid to toss a little bully into the mix to move things forward.
  1. The Technocrat (aka pocket protector guy). This is the technical nerd who can put you into endless detail hell. The technocrat has a billion issues and has a hard time deciding what’s really important, since to him everything is important for some reason. Make sure you don’t lose your focus and fight for what you really care about.
  1. The Wimp (aka Marty McFly). You may be able to take his wallet pretty easily during the negotiation, but if you get too good a deal it will come back to haunt you. You have to live with him on the Board and making decisions. You may end up negotiating both sides of the deal, which is sometimes harder than having a real adversary.
  1. The Curmudgeon (aka Archie Bunker). With the curmudgeon, everything you negotiate sucks. He may not yell, but he’s never happy, and keeps reminding you how many times he has been around the block. If you are patient, upbeat, and tolerant, you’ll eventually get what you want, but don’t expect to ever please him.

Secondly, you should never walk into any negotiation blindly without a plan. Know the key things that you want, understand which items you are willing to concede, and know when you are willing to walk away. When determining your walk-away position, you need to understand your best alternative to agreement, and have a Plan-B (bootstrapping, competing investor, or more time).

Another key preparation is to get to know the investors you will be dealing with. Do your homework on the Internet and through contacts to find out their strengths, weaknesses, biases, curiosities, and insecurities, Knowledge is power, and that can be used for leverage.

On the other hand, when negotiating a financing for your company, you should never present your term sheet first. Always wait for the investor to play his hand. Next, make sure you listen more than you talk. You can’t lose a deal point if you don’t open your mouth. Finally, don’t lose sight of the deal as a whole, by being forced to a decision linearly on each point in isolation.

If you are the least experienced person around the negotiating table, it’s time to hire a great lawyer to help balance things out. Remember, your lawyer is a reflection of you, so check their reputation and style, as well as their win-loss record. The financing is only the beginning of a critical relationship, and a small part at that. Don’t work so hard at winning the battle that you lose the war.

Marty Zwilling

Saturday, December 25, 2021

10 New Realities Drive The Customer Decision Process

customer_shopping-decisionToday’s customers are overloaded and overwhelmed by too much information, so making a decision is a challenge. You may think this is only important to your marketing and sales people, but in reality it doesn’t matter how great your product or technology might be, you won’t succeed if you don’t understand your target customer decision process. Every aspect of your business must be about sales.

In my role as an advisor to startups, I often have to remind entrepreneurs to think more like sales people from day one, in finding a real problem to solve and designing the solution. Even the best technology won’t sell itself. Everyone on your team needs a regular update on the latest insights for sales people, like the classic book, “Heart and Sell,” by sales training expert Shari Levitin.

Levitin outlines ten universal truths about selling, and the customer decision process, which every business needs to address in their product, business model, and their whole customer experience. Just think of your whole business as the sales engine, rather than just the sales reps:

  1. Success requires continuous learning and improvement. No matter how certain you are that your solution perfectly matches customer needs, you will be wrong. Success requires a willingness to take responsibility for shortcomings, better understand customer needs, and the ability to quickly learn and adapt. This is the growth equation for a startup.
  1. Emotions drive customer decision-making. Your ability as a business to uncover and capitalize on customers emotional motivators will dictate your success. That’s why Steve Jobs spent as much time on “insanely great design” as technology, and marketed to customer emotions. The lowest price is not always the real customer motivator.
  1. Every growth business must have a repeatable process. Just like good sales people have a repeatable process they follow, every startup has to overcome the chaos of a new business, put structure in place, document their processes, and focus on scaling up the engine. Everyone on the team must adopt the same culture and recipe for success.
  1. Resilience is the life skill of a business. Setbacks are inevitable, but good businesses and good sales people always bounce back. Both should assume that “no” never means “never.” A good entrepreneur actually gets stronger as he or she learns from each growth failure, and responds ever more effectively to customer needs and expectations.
  1. Business brand trust begins with customer empathy. Empathy is about being fully engaged with your customers, through interactive social media, and taking the time to listen to real customers face-to-face. You have to demonstrate common ground and shared values with your customers over the entire customer experience.
  1. Integrity matters in all aspects of a business. A business has to demonstrate integrity, reliability, and competency, just like a good sales team member. Integrity means doing what you say you’re going to do as a business, being responsive to changing needs, and making the right kind of promises to your target customer segment.
  1. Grow by helping customers rather than pushing a message. If you ask customers how you can help, you will uncover what matters most. This is more effective in directing their thinking and actions than selling technology. Well-crafted questions pull in customers. Good questions create change. Great questions can change the world.
  1. Emotional commitment precedes economic commitment. Don’t try to create a sense of urgency by appealing to greed. Your business and your team need to understand and demonstrate how your product connects precisely to what motivates your customer. These days, that includes a memorable total experience and testimonials from friends.
  1. Removing customer resistance takes persistence. All customers are prone to raising objections, because change is hard, there are many competitors, and decisions take time to make. As a new business trying to grow, you need to be able to isolate the toughest customer objections, and adapt your solution or business model to eliminate them.
  1. Looking for wrongs never makes you right. Every entrepreneur struggling with business growth has the urge to blame it on a lack of funding, an economic downturn, or unfair competitor. Instead, look for what has worked, and what you haven’t yet tried with your customers, to get it right. Focus on the real purpose that customers seek.

Businesses that think and act as a whole like their best sales people will build what their customers want and need, making everyone’s job a lot easier, and the customers a lot happier. That’s a recipe for business success that I recommend to every entrepreneur and professional.

Marty Zwilling

Friday, December 24, 2021

9 Keys To Group Participation, Alignment, and Results

richard-branson-leadership-leversBased on my experience in business, it takes a team that works together to be successful, in conjunction with leadership from the top. You may be able to establish a startup while working alone, or managing autocratically, but long-term business growth and success requires the power of effective group relationships to achieve exceptional engagement, team alignment, and results.

I believe this is a lesson that the great Steve Jobs learned the hard way, with his singular focus when starting Apple, with a low priority on relationships until he was forced out during a growth crisis. Fortunately, he learned from experience and returned to lead his team to new heights.

I recently saw a great summary of specific guidance on how to build relationships with your leadership teams, to minimize the learning curve experienced by Jobs and many others, in a new book, “Leadership Levers,” by Diana Jones. She is a trusted and experienced leadership advisor, executive coach, and author. I will paraphrase her key recommendations here:

  1. Humbly share your knowledge and your expertise. Being willing to able to contribute subject matter expertise is important to positive peer relationships, as long as you do it positively and with an open mind. You need to be a role model for your staff, in teaching them how to think about the implications of pushing their expertise in decision-making.

  2. Be an astute context discerner and direction setter. To be perceived as a great group leader, you must display an ability to read today’s rapidly shifting contexts, and be able to help the team navigate the way forward. Be especially sensitive to issues that can weaken customer relationships, antagonize stakeholders, and need timely responses.

  3. Offer insights and learning from your experience. Impactful leaders highlight key activities in their career when offering insights and recommendations. Richard Branson kept meticulous notebooks of scribbled ideas, insights, and to-do's from key events in the past, for sharing with his leadership team for his many companies in Virgin Group.

  4. Be future focused with your vision and direction. Compelling leaders share often their vision, direction, and the results they want. In this world of continuous change, these are the constants that can keep your team aligned while they clear the inevitable roadblocks and navigate to a shared future and success. In so doing, you actually create the future.

  5. Keep the team’s eyes on progress and results. You do this by sharing results in team meetings, rather than activities to date. Results bring optimism to groups, and they are your success measures. Don’t take them for granted. Focus the conversations on creating the future, not unraveling the past. Ask for results to be praised for the week.

  6. Be an insightful process navigator for meetings. Navigating is essential when a group is going around in circles, or a team member has gone down a rabbit hole, or is diverting with curve balls. It’s up to you to address the whole group, share your insight on what is happening, and reset the path forward. Navigators are able to move the group forward.

  7. Become a silent observer as well as a participant. The most effective leaders always manage to regularly step back out of the action in a meeting to observe patterns, reflect, generate insights, and then rapidly act to get things back on track or set a new direction. Monitor staff engagement, and act quickly to solicit re-engagement from key players.

  8. Be sure to notice and champion others’ contributions. As the leader, you must take responsibility for the development and visibility of others in group meetings. In a short period, appreciative alliances are built among all members. This leads to better group problem-solving and speedier decision-making across the whole leadership team.

  9. Move often from silence to collaboration and alignment. Letting others know what you think and feel on important matters is more likely to create collegial alignment in any group than remaining watchful and silent. Avoid being oppositional by saying “I disagree.” Better to be curious by asking questions or offering you own collaborative insights.

One thing that continues to surprise me with business leaders I meet is how many tend to sit silently in a group meeting, mistakenly thinking it is positive to let the team debate and come to consensus without your intervention. As you can see from these recommendations, your insights and relationship are critical to the best results, and to a positive group view of your leadership.

Marty Zwilling

*** First published on Inc.com on 12/10/2021 ***

Wednesday, December 22, 2021

7 Keys To Sustainably Enriching Your Customers’ Lives

very-happy-customerAs I talk to many of you in my role as business advisor, I still often hear the concern for maximum return to the business and stakeholders, more than a passion for sustainably enriching the lives of your customers and team. In this age of instant and global communication via social media and the Internet, I see more and more evidence that delighted customers should be your top priority.

Happy customers quickly become your biggest advocates, today reaching far beyond friends and family, and they make traditional marketing efforts pale in comparison for growth, loyalty, and new customer acquisition costs. I was happy to see quantified evidence of this in a new book, “Winning on Purpose,” by Fred Reichheld, creator of the Net Promoter system of management, in concert with Darci Darnell and Maureen Burns.

In the book, Reichheld outlines seven key strategies, paraphrased and outlined here, for your business focus today to adopt and build a community of enriched customers that can drive your brand image and your financial returns to the next level:

  1. Seek meaning and purpose for the people you touch. This applies to your own team, as well as customers. Everyone in your community has a desire to live a life of purpose, and will return the favor if you provide that opportunity. Customer and employee happiness are inextricably intertwined, and are linked to organizational success today.

    A winning linked focus example is to choose a higher purpose common to all cultures, such as protecting the environment, or helping the underprivileged. In this context, the TOMS Shoes team delivers a free pair to a child in need, for every pair purchased.

  2. Make every customer experience memorable. Too many businesses I know still see customer service as a burden, rather than an opportunity to gain loyalty and advocacy. Your goal must be to make every aspect of a customer interaction a joy to both you and them, starting from the shopping experience, to the sales close, to delivery and service.

    At every Ritz-Carlton, for example, employees are authorized to spend up to $2,000 per guest to solve any guest issue and make the stay positively memorable. The cost has been far more than offset by both customer loyalty and advocacy, as well as team spirit.

  3. Inspire your teams with love and affirmation. First, you as the leader must be a role model for the actions you desire – including positive communication, active coaching, rewards for results, as well as providing required tools and training. Really listen to feedback from the team, and empower them with the ability to make customers happy.

    Jeff Bezos credits much of Amazon’s whirlwind success to his support of team change “experiments,” including ones he does not personally believe will succeed. He is sold on supporting his team on the front line, who have the best view of customer needs.

  4. Provide constant innovation in processing feedback. Management by walking around is only the beginning. Today’s complex environments requires the use of innovative systems and technology for timely and reliable feedback from customers and colleagues. Old-fashioned surveys need help from new algorithms, data science, and digital bots.

  5. Nurture a culture of safe and relentless learning. Make feedback and change your friend, rather than the enemy. Foster a culture of using it to improve your ability to make happy customers and communities. I still see organizations that penalize teams for change requests, and try to live by the old adage of “it’s always been done this way.”

  6. Use metrics to assess needs and growth economics. Business and customer satisfaction data measurements are required, in addition to subjective assessments of team progress, tradeoffs, and investment decisions. A popular set of metrics for customer views is the New Promoter System (NPS), available from Bain & Company.

  7. Regularly invent new ways to delight customers. The business environment and customer cultures around the world change rapidly these days, so the status quo is never good enough. You need to incent and reward your leaders and teams to continuously experiment with new ways to delight customers with innovative products and services.

Through these strategies, and the community they engender, I’m confident that your business, your satisfaction, and ultimately your legacy will grow and prosper, even in these difficult times. Above all, don’t forget that delighted customers are the key to your business in the long term. Make them happy, and they will make you, your team, and your business a success.

Marty Zwilling

*** First published on Inc.com on 12/08/2021 ***

Monday, December 20, 2021

5 Practices For Developing A World-Class Startup Team

world-class-business-teamIt takes an effective team to attract and serve a community in business these days. With real-time online reviews and feedback via the Internet, and instant relationships via social media, a voice from the top that is inconsistent with what is heard from the firing line defines a dysfunctional and noncompetitive company for today’s customer. Thus team makeup is the critical success factor.

A few companies seem to be leading the way in building and maintaining ultra-effective teams, sometimes called extreme teams. These include companies across multiple industry spectrums, notably NetFlix in entertainment, AirBnB in hospitality, and Whole Foods for groceries. I see the commonalities detailed well in the classic book, “Extreme Teams,” by Robert Bruce Shaw.

Shaw is a consultant specializing in team performance, and he brings real experience building and working with extreme teams in companies like the ones mentioned above. In my many years of experience in business, and recent work as a mentor to entrepreneurs, I have seen the business world change, and can relate well to his five success practices paraphrased here:

  1. Build the team from people with a shared obsession. The most effective teams are built from people with a strong sense of values and commitment, starting at the top of the company. Team members need to view their work as a calling, much more than a job, and embrace a higher purpose that shapes their collective thinking and behavior.
  1. When selecting members, value fit over experience. Companies with the best teams seek out candidates with the right mix of personal motives, values, and temperament to be a true team player. Cultural fit matters more than job history or functional skills. Those that have these traits are incented to join, and those who don’t are often paid to leave.
  1. Incent them to focus and always look to the future. Extreme teams are tightly aligned around the company’s top few priorities, while remaining open to new ideas. For team members, the ongoing challenge is figuring out what not to do. These teams are motivated to develop approaches to creatively explore new opportunities for growth.
  1. Let them deal with people performance, as well as results. Teams today need a culture of being simultaneously tough in driving for measurable results, and direct in support of individuals who best create an environment of collaboration, trust, and loyalty. Teams must openly deal with their own weaknesses and take action on underperformers.
  1. Embrace healthy conflict to avoid the comfort of stagnation. Members push themselves and each other to speak up, question the status quo, take bold risks, and confront hard truths. They recognize the value of being uncomfortable as a way to push thinking outside the box, and as a wakeup call when something is not working.

I recognize this is a revolution in the way most companies and employees work today, viewing work as a set of tasks with no passion, new members selected primarily on past experience and functional skills, and viewing conflict as something to be avoided or a sign of failure. They value harmony among members, and measure success as a function of the number of priorities concurrently managed.

Building and managing teams along the new lines outlined is not easy, and that’s why it’s a real competitive advantage when you do it. It takes a new kind of management team with a strong belief that a company can thrive with a larger purpose, total customer experience is critical to success, and the new generation of workers needs a new culture of passion and relationships.

As hard as it is to build extreme teams from the beginning, it’s much more difficult to turn around a failing or stagnant team. In fact, many would say that it’s impossible, without first replacing the top leaders and key team members in an existing organization. Thus, if you are a business leader who intends to survive and thrive in the long-term, it’s time to start today by checking the culture of your teams.

Your career and your company’s future depend on it.

Marty Zwilling

Sunday, December 19, 2021

10 Tips For Crafting An Investment Grade Venture Plan

investment-grade-business-planIf you want people to invest in your idea, then my best advice is first write a business plan, and keep it simple. Don't confuse your business plan with a doctoral thesis or the back of a napkin. Keep the wording and formatting straightforward, and keep the plan short. For minimum content, see my original article “These 10 Key Elements Make a Business Plan Fundable.”

The overriding principle is that your business plan must be easy to read. This means writing at the level of an average newspaper story (about eighth-grade level). Understand that people will skim your plan, and even try to read it while talking on the phone or going through their e-mail.

But don't confuse simple wording and formats with simple thinking. You're keeping it simple so you can get your point across quickly and effectively to team members and investors. With that in mind, here are some specifics that bear repeating, updated from an old, but still accurate, article on simple plans by Tim Berry:

  1. Keep the plan short. You can cover everything you need to convey in 20 pages of text. If necessary, create a separate white paper for other details and reports. The one-page Oprah plan is a good executive summary, but it’s not enough to get the investment.
  1. Polish the overall look and feel. Aside from the wording, you also want the physical look of your text to be inviting. Stick to two fonts in a standard text editor, like Microsoft Word. The fonts you use should be common sans-serif fonts, such as Arial, Tahoma or Verdana, 10 to 12 points.
  1. Don't use long complicated sentences. Short sentences are the best, because they read faster, and reader comprehension is higher in all audiences.
  1. Avoid buzzwords, jargon and acronyms. You may know that NIH means "not invented here" and KISS stands for "keep it simple, stupid," but don't assume anybody else does.
  1. Simple straightforward language. Stick with the simpler words and phrases, like "use" instead of "utilize" and "then" instead of "at that point in time."
  1. Bullet points are good. They help organize and prioritize multiple elements of a concept or plan. But avoid cryptic bullet points. Flesh them out with brief explanations where explanations are needed. Unexplained bullet points usually result in questions.
  1. Don’t overwhelm the plan with too many graphics and flashy colors. Pictures and diagrams can effectively illustrate a point, but too many come across as clutter.
  1. Use page breaks to separate sections. Also to separate charts from text and to highlight tables. When in doubt, go to the next page. Nobody worries about having to turn to the next page.

  1. Use white space liberally, spell-checker, and proofread. Include one-inch margins all around. Always use your spell-checker. Then proofread your text carefully to be sure you're not using a properly spelled incorrect word.
  1. Include table of contents. No investor likes searching every page for key data, like executive credentials, or exit strategy. Most word processors these days can automatically generate a table of contents from your section headings. Use it.

Investors hear from too many entrepreneurs that envision a great business opportunity, but don’t have any written business plan at all. They think they can talk their way to a deal. It won’t work. On the other end of this spectrum are entrepreneurs who present long product specifications with a few financials at the end. This is a failing strategy as well.

If you're not the type who can connect with people based on a simple message, told succinctly, then hire someone who can. In fact, simplicity and readability is one of the most effective strategies for selling even the most complex proposal. A business plan that is easily understood and looks professional is already half sold. Simple is not stupid.

Marty Zwilling

Saturday, December 18, 2021

How To Test Your Brand Relationship To Real Customers

Marriott-Hotel KölnBrands are people first. Customers are people too, so customers tend to take their relationship with a brand personally. Thus it’s not a surprise that people love their favorite smartphone brand, cringe when you mention their cable company, or even hate the mention of a particular bank.

Startups, as well as every existing business, need to realize that this brand perception is becoming more and more driven by their relationships with customers, as well as feedback from other customer brand relationships, made visible on social media and Internet websites like Yelp and Foursquare. Proving the new model today are sites like Patagonia and Zappos.

According to Chris Malone and Susan T. Fiske, in their classic book “The Human Brand,” humans are very perceptive, from early survival evolution, and make quick judgments about other people’s intents toward them (warmth), and the capability of carrying out intents (competence). Thus your brand (people) needs to project both warmth and competence, for loyalty today.

But how do you know if your brand is projecting warmth and competence to your customers? Here are some key signals, outlined by Malone and Fiske, which I believe every startup founder and business leader should evaluate in their own business to see if their brand is positive:

  1. The loyalty test. For loyal customers, a business has to first demonstrate genuine warmth, concern, and commitment. Selling to loyal customers is 3 to 10 times cheaper than acquiring new customers. Go beyond loyalty expectations, and you can turn loyal customers into passionate advocates who actively recommend your company to others.
  1. The principle of worthy intentions. This principle is a relationship building strategy that involves attracting and keeping customers by consistently putting their best interests ahead of those of your company or brand. Competence alone won’t ensure loyalty. Only the emotional connections of worthy intentions has the power to change minds.
  1. The price of progress. Faceless commerce these days leads to a focus on discounts. Discounts are viewed as less-than-worthy intentions, and do not buy loyal customers. Every website must offer more than one-way commerce and discounts. It must also offer interactive relationships, and warmth and competence, through worthy intentions.
  1. Take us to your leader. Customers today have a primal desire to judge brands by the people behind the brand, most notably the CEO. Customers look for transformational rather than transactional leaders, who inspire employees to exert the extra effort on customers’ behalf. Leaders need to come out from behind their curtain.
  1. Show your true colors. Mistakes and crises are a golden loyalty opportunity. We are apt to forgive when we feel empathy for an offending partner. Customers watch and judge whether people or profits come first. A brand spokesperson can show worthy intentions, or can deflect blame and take a narrower more self-serving view.

Today’s business market exists in the renaissance of relationships. Perception is reality, and businesses can no longer hide behind their brand. Transactions move faster and mistakes happen faster, with customers able to watch for warmth and competence, or no worthy intentions. Here are key imperatives, sanctioned by Malone, Fisk, and myself, to keep you on the right track:

  • Become more self-aware. On-going self-awareness is a crucial competency of every brand and every business leader. Don’t be afraid to ask customers the direct questions – do you see us as warm and trustworthy, as well as competent and capable? Then listen with an open mind and genuine interest, and be willing and able to change.
  • Embrace significant change. Change is now the norm, so no change over a period of time is actually moving backward. Companies and brands must shift from a mentality of control, defensiveness, and unresponsiveness to one that is more open to understanding how they are perceived, and to adopt change as a good thing, rather than a problem.
  • Fundamentally shift priorities. Lasting change requires a sincere examination and adjustment of the goals and priorities that have led companies astray in the first place. Sustained success in the future will require companies to dramatically shift their emphasis from short-term shareholder value to shared value for multiple stakeholders.

Overall, your customers now have near-instantaneous power to hold companies and brands accountable for their words and actions. That power will continue to grow in the years ahead. Is your brand ready to flourish in that environment, or highly at-risk for any slight misstep?

Marty Zwilling

Friday, December 17, 2021

7 Concepts To Keep In Mind When Running Any Business

Elon Musk, serial entrepreneur, at TED2013: The Young, The Wise, The Undiscovered.  Wednesday, February 27, 2013, Long Beach, CA. Photo: James Duncan DavidsonWhen I started mentoring entrepreneurs and startups a few years ago, I anticipated that I would get mostly tough technical questions, but instead I more often hear things like “Where do I start?” I find that the basics are actually the hardest to answer, just like your parents found out when they first tried to fill you in on the “facts of life” a long time ago.

Most entrepreneurs are not born with the knowledge to run a successful business, so the right place to start is some business training in school, or some practical work experience in a business of your interest, prior to starting your own company. Jumping into a business area you don’t know, because you see a chance for big money, is a surefire path to disaster.

I also found a wealth of books are available to address the basic facts of business life, like the classic by Bill McBean, aptly named “The Facts of Business Life,” based on his forty years running large and small businesses. Bill does a great job of outlining the key realities as follows:

  1. If you don’t lead, no one will follow. Good business leadership begins with defining both the direction and the destination of your company. That’s where you start. From there you need to hone a whole set of skills to survive and prosper, including effective communication, leadership under pressure, and constant adaptation to change.
  1. If you don’t control it, you don’t own it. Control in business requires teamwork, which occurs in successful companies when team members, products, and processes work in unison. You have to define the key tasks that must be handled every day, and institute the proper controls to make sure they happen effectively and consistently.
  1. Protecting your company’s assets must be your first priority. Assets include the obvious equipment, accounts receivable, and cash. Maybe more importantly, your long-term survivability is tied to intellectual property, like trade secrets and patents, as well as other less tangible items like your customer base, your experience, and your skills.
  1. Planning is about preparing for the future, not predicting it. Planning is not just an early-stage activity, but must be an ongoing activity, based on current accurate information as well as educated guesses on future changes. Planning should keep you focused on what’s important, and prepare you for what lies ahead.
  1. If you don’t market your business, you won’t have one. Marketing and advertising are business realties. Word-of-mouth and viral are not long-term solutions. It doesn’t matter how good your product or service is if most of your potential customers don’t know about it. With 200,000 new websites per day, customers won’t find you by accident.
  1. The marketplace is a war zone. Every company has competitors, or there is no market for what you offer. Successful entrepreneurs know they have to fight not only to win market share, but to retain it as well. Past success is no guarantee of future success, and the only way to remain successful is to maintain a fighting mentality.

  1. You don’t just have to know the business you’re in, you have to know business. Understanding one’s industry is necessary but not sufficient to be successful. Many businesses fail simply because they ignore or do poorly one or more of the basic aspects of every business, like accounting, finance, personnel, or business law.

In business, as with people, there is a life cycle of birth, constant maturing, change, and rebirth. Entrepreneurs are ultimately responsible for guiding their business through this life cycle, rather than getting suck in any one stage. This means the entrepreneur has to focus correctly not only on what is important, but also on when it’s important.

Before you start building a business, you really do need to know the basic concepts of leadership, management, and operations, and you need to know how these areas change as a business goes through its life cycle. These are the “street smarts” that many entrepreneurs try to acquire by fast talk and bravado. That’s a painful and expensive way to learn any facts of life.

Marty Zwilling

Wednesday, December 15, 2021

8 Mindset Principles That Lead To Success In Business

business-success-mindsetAs a long-time business advisor and mentor to entrepreneurs, I’ve always been impressed with the few who seem to always come out ahead, no matter what the challenge. It seems to be more a function of mindset and principles, more than education or natural ability. I’m convinced that we all have a similar potential, if we practice the right principles and persevere through thick and thin.

We have all heard of examples where people have overcome physical odds to success, such as Richard Branson with dyslexia, causing him to get low marks in school and communicate poorly as a young business person. He learned to use a positive set of principles and his personality to overcome these disadvantages, and now is a self-made billionaire, leading over 400 companies.

Here is my assessment of some of those key principles that I find practiced around the world by successful business people in today’s rapidly changing business environment:

  1. Show that you are willing to lead, as well as follow. People are always looking for leaders in tough situations, but not egos unwilling to bend to new learning and expertise from others. It’s important that you communicate your expectations to people around you, and provide feedback and rewards for the contributions from peers and team members.

  2. Surround yourself with people that are smarter than you. Your future is bound by the relationships you keep. It may feel good initially to have people around who wait for your requests, but they can’t always help you. You need to learn from friends who think independently, have been there and done that, and live in different business domains.

  3. Don’t be afraid to take risks, but seek to limit your losses. Whether you are a professional in a team role, or an entrepreneur looking for a new startup, you never get anywhere unless you take a chance. On the other hand, closing your eyes and jumping blindly into an abyss is not smart. Always push your limits, but leave enough to recover.

  4. Stop thinking, make a decision, and take action. Some people are all about new ideas, but hesitant to commit and implement a specific plan. In today’s rapidly changing world environment, you can easily loose an opportunity by not moving quickly and decisively. There is always room to learn and pivot as required, and things change.

  5. Play to your strengths, and acknowledge your weaknesses. Your strengths are your real competitive advantages, so focus on them. Recognize your weaknesses, and find help in filling the gaps, rather than trying to do everything yourself. A successful business requires a team of strong people, rather than one hero. Build a complementary team.

  6. Always maintain and express a positive attitude. It’s easy to see every challenge as a problem, instead of an opportunity. The mindset and attitude you adopt will impact what you can accomplish, as a self-fulfilling prophecy, as well as how other people see you. Others need to count on you as one who is willing and able to tackle the hard challenges.

  7. Deliver value to your customer, to accrue value in you. Too many business professionals I know spend more time advertising their own value, rather than making sure their team and their customer recognizes value and becomes their best advocate. Value to a customer means you are solving their problem, not highlighting yours.

  8. Approach success with small steps, rather than a ‘big bang.’ We all dream of that big event or opportunity that will propel us to success, but these rarely happen. Smart people will tell you about all their little steps forward, and many failures, that they enjoyed and endured in life. Celebrate small wins to build a mindset for long-term success.

There comes a time in every career when more education and planning has to give way to actual participation and performance in business. I recommend that you start early in overlapping these activities, and gradually switching your mindset to how you deliver, versus what you know.

In my experience, that mindset, and the delivery principles you follow, are the overriding keys to your ultimate success.

Marty Zwilling

*** First published on Inc.com on 12/02/2021 ***

Monday, December 13, 2021

7 Steps To Greater Satisfaction As A New Entrepreneur

entrepreneur-newIn my role as mentor to many of you aspiring entrepreneurs, I often find you convinced that all you need to start is a unique innovation or idea, and now you are ready to jump in with both feet and enjoy the ride. Unfortunately, from my own experience, it’s not that simple, and not doing some preparation first can easily result in stress, lack of satisfaction, and a hard road to success.

Over the years, I’ve found some practical steps which will give you a better foundation, minimize the risks, and greatly increase your chances wealth and happiness from your first new venture. I’m certainly not saying that all of these are required, but they are certainly all worth some consideration:

  1. Get some business education, as well as technical. Remember that being an entrepreneur is all about starting and running a business, after the initial invention. If you are a technologist, and business just isn’t your thing, then find a partner you trust who can complement your technical skills with a passion for business. You can win as a team.

    In my view, practical business courses in school are better than an advanced degree or MBA. A breadth of understanding of common business principles, such as management, personnel and finance, is more important than a depth of knowledge in any specific area.

  2. Join an existing startup for a reality check. Of course, working for a startup is not like running one, but it will give you a feel for the lifestyle implications, the mindset required, and how things look from the inside out. The education will be invaluable in setting up your own business, managing a team, and learning how to deal with constant challenges.

    Other successful entrepreneurs, including Jeff Bezos, worked in corporate jobs for a few years before deciding to step out on their own. They always give credit to the many things they learned, and the resources they needed, before risking their own career.

  3. Actively share info with entrepreneur peers. It’s amazing how much you can learn from people who have been there, and love to talk about their successes as well as their failures. Aspiring entrepreneurs who are determined to operate in stealth mode, for fear of giving away their secrets, will find they lose more than they could gain by sharing.

    In many cases, you can learn more from someone in an industry not exactly like yours. Bill Gates, for example, maintained an information sharing relationship with Warren Buffett for many years, and both will attest to the learning they achieved from the other.

  4. Do in-depth research on relevant startups and leaders. Use networking, the Internet, and personal contacts to really understand the ‘how’ and ‘why’ behind related success stories. Don’t be afraid to contact insiders directly, reach out through social networking, and reserve some time each day to expand your insight until you understand their story.

  5. Enlist a mentor and advisor who is not a ‘yes’ person. For some reason, aspiring entrepreneurs seem to like to surround themselves with friends and family, who are quick to tell you what you want to hear. You need critical guidance, tempered with experience and a positive outlook, to overcome obstacles and tune your strategy for the real world.

  6. Start a ‘practice’ business to learn the ropes. I’m always impressed when I see very young people running a lemonade stand, selling t-shirts, or servicing a newspaper route. These activities may be low-risk, but they teach volumes about the entrepreneur mindset, as well as the challenges and potential satisfaction. Find your level of passion early.

  7. Write a business plan for your first startup. Don’t believe the myth that business plans are a waste of time, since investors never read them. In reality, the business plan is for you, to make sure you have answers for all the relevant requirements, including costs, revenue projections, competition, marketing, and operational considerations.

All of these steps will force you to assess the depth of your motivation and preparation to be an entrepreneur. If you want to start a business because you see it as a path to easy money, an escape from an existing boss, or a response to family pressures, it’s better to learn earlier rather than later that startups don’t work that way.

If you do your preparation, the entrepreneurship lifestyle can be a labor of love, and lead to great personal satisfaction, as well as positive change in the world for the rest of us. Don’t take shortcuts to make it happen.

Marty Zwilling

*** First published on Inc.com on 11/29/2021 ***

Sunday, December 12, 2021

9 Keys To Employing Social Media To Grow Your Startup

Digital-AnalyticsIf you are an entrepreneur these days, or trying to grow an existing business, everyone is telling you that you need to use social media. There are many ‘experts’ out there telling you how to do it, or even offering their services. But very few are talking about how to measure your results and return on investment (ROI), and the right metrics for optimizing your marketing environment.

Jim Sterne, who has written many books on Internet advertising, marketing, and customer service, tackled this complex world of social media metrics in a classic book titled simply "Social Media Metrics." He has one of the first books on this subject, and he breaks the process down into nine key activities, as follows:

  1. Get focused and identify goals. Social media is the realm of public opinion and customer conversations. If you don’t have a clear idea of why you are there, anything you measure will be useless. He suggests you begin with the “big three” business objectives of higher revenue, reduced costs, and improved customer satisfaction.
  1. Get attention and reach your audience. Measuring message delivery in social media is a lot like measuring it in classic advertising, so classic metrics apply. With social media, it is also important to identify how many people see your message as remarkable. That leads to the extra reach of word-of-mouth, commenting, and telling their friends.
  1. Measure respect and find influencers. Your task now includes reaching the people who are key influencers, and understanding their impact. Therein lies the multiplier effect. Your message multiplier velocity and reach are the signals that your offerings have the right scope, spread quickly, and resonate with your target audience.
  1. Track the emotional sentiment. Counting is fine, but analyzing the outpouring of millions of souls can reveal attitudinal shifts. Tracking public sentiment over time provides invaluable insight and gives you the chance to stay right on top of changes in the marketplace and your organization’s brand equity.
  1. Measure customer response and action. If they read it and like it, do they click through to your web site, or engage with your organization in new and different ways? Action is when people are drawn into a profitable and sustainable relationship with your company. That’s where the money is.
  1. Get the message from your customer. With the customer in control, you need to make sure you are getting the right message from the right people at the right time. That’s real-time market research, and you need to measure how well you are hearing it and acting on it in your business strategy planning.
  1. Drive business outcomes and get results. Now it’s time to cycle back around to measuring what sort of business impact your efforts are having. Measure to see if you have an increase in revenue, a lowering of costs, and improvement in customer satisfaction. Then it’s time to re-examine your goals to look beyond the “big three.”
  1. Get buy-in from your colleagues. Some executives are slow to understand and embrace new communications methods. Use your results to convince them that social media is a vital part of your marketing mix, and deserves the resources necessary for proper implementation and measurement.
  1. Project the future. Start now to look at where social media will be in two to ten years, and prepare for it. Don’t let the changes takes your organization by surprise, or allow your organization to be the last to implement and measure you in the new world.

The tools to help you with all these actions continue to evolve. You can scan the Internet for the many offerings to gather data, but the evaluation of the ‘why’ behind the results is still largely manual. That’s the insight you need to support your efforts to reach higher performance goals. The sooner you find these insights, the quicker you can make better decisions to positively enhance your bottom line.

Marty Zwilling

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

Saturday, December 11, 2021

5 Keys To Making Your Online Profile A Winning Resume

job-interview-online-presenceWith the reality of LinkedIn, Facebook, and dozens of other websites profiling you, the old-fashioned written resume is an artifact of a hiring practice that is now superfluous. The real “resume” that you have to live with is everything that you or anyone else has posted about you on any site on the Internet. You don’t dare hide, since the biggest negative is no Internet presence at all.

Today, most personnel organizations readily admit that they already use the Internet to validate what they see in your written resume. You can bet that if the stories don’t match, they will more likely believe the online version. That’s why I emphasized in an old article, “Google Yourself to See How Other People See You,” how important it is to keep your online image clean.

In reality, it doesn’t matter whether you are preparing an online profile for your favorite social network, or a written resume (Curriculum Vitae) in the old-fashioned sense, you need to make certain that it helps your case rather than hurts it. Here are some tips on how to make yours stand out above the crowd, online and off:

  1. Focus on publishing results. By focusing on results produced and on the needs of the employer, you’ll stand clearly apart from 90 percent of other applicants. Their profiles say, in effect: “I worked these jobs.” Your profile should say: “Here are results you can expect.” That’s much more refreshing and enticing.
  1. Make it look professional. You only get one chance for a good first impression. Choose a couple of readable font styles and sizes, and no bright colors or highlighting. Spell check and proofread many times – a single typo or incorrect word can get you rejected. Online, avoid slang and other bad language, and keep your comments positive.
  1. Include a current picture. Every professional needs to look professional. You can’t hide, so be proactive and look your best (online or on paper), with a small headshot, rather than force the recruiter to find some not-so-attractive shots on Facebook or Twitter outside your profile. A cartoon picture or photograph of your pet won’t impress anyone.
  1. Don’t leave time gaps. Big time gaps in your professional life are a red flag. Did you skip those years because you were raising a family, unemployed, or in jail? A short entry for the period, stated as positively as possible, will leave a better impression, and avoid embarrassing questions later. Complaining about terrible jobs won’t get you sympathy.
  1. References on request. Mention that references are available, but including them in the profile can leave the impression that these are very generic. Personal references should be customized to support specific requests from a potential employer, and confirmed by you prior to employer contact.

Executives tell me that they are continually frustrated that most of the resumes they see still sound like “job descriptions.” We need to know what you did, not what you were supposed to do. Words like “assisted” and “supported” are not results. Fuzzy words will always hurt you.

Offline, it’s a good strategy to customize your resume to match each opportunity. For example, if you are looking at an entrepreneurial position, show a background in leadership. Mention entrepreneurial groups, and highlight groups you started all the way back before college. If it’s an executive position, highlight your results in that context.

I suspect the day is near when Wikipedia will make even social network profiles obsolete, meaning that every professional will have a public profile entry, maintained by a vast number of “online volunteers” (see Bill Gates, for example). The “open source” cross-check process seems to keep these fairly accurate, and the constraints on who is a “public person” go down every day.

Based on what I see today on Facebook, a lot of people have a long way to go in building that professional resume to show the world. Now is the time to check yours and make sure it highlights your strengths, rather than your shortcomings, before it shows up on Wikipedia and your employer’s desk.

Marty Zwilling

Friday, December 10, 2021

7 Leadership Insights That Lead To Business Success

leadership-business-successDuring my many years in business, both as a professional and an entrepreneur, I always wished I knew the secret to success. Although I was never able to pinpoint any single one, I have gathered some insights which I’m certain are key. In more recent years as a mentor and angel investor, I’ve been even more determined to pass this guidance to those now entering the workforce.

Thus, I was pleased to see many of my insights seconded in a new book, “The Promises of Giants,” by John Amaechi, OBE, a respected organizational psychologist and leader in the global business arena. For your contemplation, I am paraphrasing his list of insights here, with my own experience added:

  1. “Nice guys” don’t necessarily finish last. I’ve long heard the myth that peers who are pleasant, thoughtful, conscientious, ethical, fair, and honest are destined to get run over. Obviously, this does happen occasionally, but in my experience, those who consistently demonstrate an aggressive, yet positive and friendly approach, will win in the long run.

    While new research confirms that people who manipulate others, and narcissists' charm, makes them much more likely to be chosen as leaders, when it comes to getting the job done, it also shows that they tend to achieve less and are considered poor team players.

  2. Success doesn’t require disrespect or cruelty. Success does require making difficult decisions, and the ability to deliver difficult conversations. It just means that successful leaders don’t have to aim to harm people or recklessly disregard the impact of decisions on individuals. Really successful leaders do have sensitivity, and show it to their team.

    For example, Tim Cook, CEO of Apple, elevated the positive values recently at the 2019 Dreamforce conference, stating: "Wouldn't it be great if everyone woke up and said, from now on I'm treating people with dignity and respect. So many problems would go away."

  3. Meeting your goals is the only definition of success. Success for you needs to be enduringly meaningful and purposeful to your life and context. The quickest way to fail is to tie your assessment of winning to someone else’s criteria or dream. In my experience, it must be challenging, even seem impossible, and have major value to others as well.

    The first step is to find out what really motivates you. What do you want to achieve for yourself and your family? What do you value spiritually, emotionally, and materially? That's what will make you happy, and it’s no fun being successful if you are not happy.

  4. Success requires a clear, vivid, and explicit vision. While it’s important to pick a valid target, whatever it may be, you must promise to commit fully to that success. At the organizational level, this may be measured by profit and loss, but that most often is related to employee engagement, quality of experience, and other human factors.
  5. Winning means compromise and making tradeoffs. You need to understand that business is about satisfying your customer, as well as yourself. Having to pivot as you learn is the only way to win, and being a perfectionist is a quick way to lose. Winning in the long run is the definition of success, and is not always the same as winning right now.
  6. You don’t have to destroy others to achieve success. Great success is a win-win solution, rather than win-lose. Don’t let others pit you against everyone else, since there must be enough room is business for customers, vendors, and your team to win, as well as you. Even competitors can provide you will helpful insights and winning nuggets.
  7. Success hinges on minutiae, not pivotal moments. Enduring success is built upon equalizing attention to detail, focus, and effort across everything you do. We all know a respected leader who makes it all look easy, getting positive results and success in the face of mundane, vexing, and even obscure issues. Pivotal moments are for recollection.

Success in business requires that you vigilantly tend to everything that is within your control, including all the dusty stuff in the corners that you would rather not deal with. If you cannot commit to that, then you are not truly committed to success. At the same time, if you can achieve something meaningful for all those around you, they will bring long-term success your way.

Marty Zwilling

*** First published on Inc.com on 11/26/2021 ***

Wednesday, December 8, 2021

6 Reasons For Your Business To Embrace Social Media

social-media-small-businessAn all-too-common question I get from startups and small businesses is “Which is the right social media platform for my business?” Is it Facebook, Twitter, LinkedIn, or one of the other 200 active platforms vying for attention these days? The right answer is that not all of these are worth your attention, but it’s probably more than one.

The “Tyranny of the OR” is a concept from the old classic business best-seller “Built to Last,” by James C. Collins (Stanford Business School). Too many executives believe that things must be either A or B, and can’t be both. The reality is that most businesses need to embrace the “Genius of the AND,” meaning they should use and monitor more than one of the available platforms, based on objectives.

If you are in the almost 30 percent of all small businesses who still ignore social media, you need to read the book by Dave Carroll, “United Breaks Guitars.” It highlights the story of how United Airlines paid no attention to social media while Dave’s story of his crushed guitar and poor customer service went viral around the world. United Airlines spent a long time recovering from that debacle.

Thus your objectives for social media should at least include monitoring your online reputation on the three top platforms, and hopefully taking the minimum actions to turn any negatives into positives for the rest of us. Of course, the right approach is to be proactive along all the following fronts:

  1. Reputation management. You can’t ignore the fact that Facebook now has over 2.32 billion monthly active users who may be talking about you, and there are 23 others, per Wikipedia, that have over 100 million users. You need to protect and grow your brand, so the first step is to know what’s going on, and the best defense is a good offense.
  1. Build your brand and expert visibility. Engaging in social media and blogging on a regular basis is a low-cost way to achieve visibility, and become the “go-to” person for that topic and the voice that people trust in your industry. That’s how you brand yourself as an expert in your niche and make your company the one that others seek out and turn to. Customers today trust those they know and those they see others trusting.

  1. Increase customer leads and conversion. With over three-quarters of the U.S. population now using social media, at least 30% look at profiles on Facebook, Twitter and LinkedIn before buying any product or service. Of those, approximate 70% said they wouldn’t deal with a new company if it didn’t have a social media presence. You need to be there.
  1. Maximize customer retention. It’s a well-known axiom of business that efforts to retain existing customers have tremendous payback, compared to the costs of attracting new customers. Courting them with ongoing updates and special offers through their social networks is a natural way to keep their loyalty.
  1. Proactive customer service. Without social media, companies must rely on incoming calls and letters to address customer problems and concerns with products and services. Why not ask them for feedback before there is a problem, and watch what they are telling their friends, both good and bad?
  1. Keep up with the competition. Last year, Facebook’s revenue from advertising was over $55 billion, which was a 50% year-over-year increase. Almost 40% of small businesses that sell on Facebook say it is their sole sales channel. Ignoring what your competition does is sure to limit your business longevity.

So what are the best social media platforms for small business, according to these industry leaders? It never hurts to look at where the big boys are. According to data from Inc. 500 companies, major hitters are LinkedIn (98%), Twitter (91%), and Facebook (89%). I recommend that these be the point of entry for every business.

For the new platforms and all the rest, that’s where tracking and testing comes in. Set some objectives, pick a likely platform, set some measurements, and do a 30-day trial. If you don’t get results, it might be a mismatch for your target market. If you see progress, double down and add even more content or focus to continue the positive momentum.

So there is no one magic social media platform for any business, just like there has never been just one marketing channel for any business. The best marketing programs today for small businesses are the “genius of the AND,” including traditional print and video advertising, complemented by proactive efforts in a selection of the new social media domains. Don’t put all your marketing eggs in one basket.

Marty Zwilling

Monday, December 6, 2021

5 Options To Consider Before Giving Up On A Business

town-sign-bankruptcyIf you are just plain tired of working so hard, or your startup is not getting the traction you expected, should you shut down cleanly, or just file for bankruptcy and walk away? For those who think that bankruptcy is the easy way out, think again. Bankruptcy should always be the absolutely last resort.

The “advantage” of filing for bankruptcy, of course, is that it gets creditors permanently off your back, with no continuing lawsuits, based on funds derived from selling all assets. You can hand the stressful job of liquidating assets and negotiating with creditors over to the court.

The disadvantages are many and long lasting. Your credit rating will be lost for six to ten years, and your business image will likely be permanently damaged. Once declared bankrupt, you as the business owner will likely always face problems opening new business accounts.

To add insult to injury, for a Chapter 7 filing, most courts charge a $245 case filing fee, a $75 miscellaneous administrative fee, and a $15 trustee surcharge, payable in advance (does anyone see the irony in charging for bankruptcy?).

There are many other negative implications to bankruptcy. These include the fact that some loans may not be forgiven, your bankruptcy records are open to public review, and any irregularities spotted later can lead to criminal charges.

The best alternative is always to get the business back on track, and sell it at a reasonable value, or do a normal closedown with full payout to vendors and investors. The next best alternative to avoid the stigma of bankruptcy (and the cost) is to privately negotiate partial business settlements with your creditors.

Making the business healthy may be easier than you think. Usually the top problem is pressing debt or cash flow, so here are five approaches to these problems you should try before giving up on the business and damaging your ability to start future ventures:

  1. Get a short-term loan. Visit some banks for the best rate and repayment plan that will help your business weather the financial storm. Do not rush out and sign for the first loan that is offered to you, or give up after the first bank declines.
  1. Sell assets to raise cash. Now is the time for a thorough inventory of all assets in your business. Chances are that you will find some items you can sell, or property to mortgage, to help alleviate your short-term cash flow problems.
  1. Trim expenses down to the minimum. If you have employees on your payroll, enlist their help. Be honest with them — let them know you might be able to save their jobs, at a reduced salary, if they can help you trim expenses down to the bare minimum.
  1. Find a friend or family-member investor. If they believe in you, there is always someone who will invest additional cash into your business to help you get back on your feet. You just have to find the right one. At this stage, honesty is the best policy.
  1. Merge with another startup or small business. Every startup brings something unique to the table, so look for another business than can benefit from your contribution. Even if you can’t get the value now that you deserve, the combined ideas and assets could pay big dividends later, and save you the emotional and financial stigmas of failure.

As a rule of thumb, only after you have exhausted all these options, and you still calculate that it will take more than seven years to repay your debt, then you should consider bankruptcy. The question is which of the many U.S. bankruptcy filing types you should choose.

For business bankruptcy, there is really only one choice – Chapter 7 liquidation, with partial payments to creditors. Chapter 11 is for large businesses seeking to restructure their debt and continue operation, and Chapter 13 bankruptcy is only for individuals.

But the worst thing about bankruptcy is the emotional impact. It will hit you over the head like a death in the family, a major illness, or a natural disaster. For your own well-being, as well as your business image, I recommend you hand off a running business. It may look like more work, but you will keep your sanity, your integrity, and your will to come back strong.

Marty Zwilling

Sunday, December 5, 2021

I Haven’t Seen A Startup Yet Thrive Without Marketing

viral-marketingEvery time I challenge a business plan with little or no budget for marketing, I get the answer that they will be using “viral” marketing, which costs nothing. The founder explains that the product or service is so “buzz-worthy” that the merits will spread rapidly through word-of-mouth only, meaning people loving it and recommending it to their friends.

First of all, Seth Godin pointed out a long time ago that viral marketing does not equal word-of-mouth. His view is that word-of-mouth is an unsolicited consumer action, positive or negative, which usually fades quickly, like a good or bad restaurant review.

Viral marketing is a deliberate marketing action, designed to grow attention at a compound rate, without further stimulus, by word-of-mouth. It usually implies an opportunity to win big, like a lottery, or experience something sensational, like an incredible video or free product.

At any rate, “buzz-worthy” and “viral” are marketing illusions that cost big money to create, and these are only the beginning. In a business plan these are only one of the many marketing campaigns which continue to rise in cost. Here are three key cost elements of just the viral marketing campaigns:

  1. Hire brand evangelists. Think of a brand evangelist team online as people blogging about your product, or posting links to it in every forum. Brand evangelists offline talk up your product lines at cocktail parties or recommend your services to friends while watching their kids' soccer game.
  1. Develop viral content. Someone has to design and create those entertaining or informative messages that are designed to be passed along in an exponential fashion, often electronically or by e-mail. It’s harder than it looks to exploit people’s propensity to share humorous, enjoyable or useful information - jokes, special offers, and games.
  1. Seed viral activity. People are more demanding and have more choices than ever before. This means spending more money on search marketing (SEM) to make it look like the buzz is working. It also means making the content appear omnipresent on the Web and in the marketplace, including dedicated video sites and blogs. In addition, special offers and competition prizes may be required.

As a result of the rising popularity of viral campaigns, the cost of developing one has increased significantly, and the increased ‘viral clutter’ has made it more difficult to stand out from the crowd. However, despite this, viral marketing can indeed be more cost effective than traditional marketing when done well.

Seeding is the most expensive aspect of a viral marketing campaign, with some video sites charging in excess of $10,000 to be featured on their home page for one week. Only a few years ago a humorous video or unique toy could be seeded into a couple of relevant online communities, and it would be hugely popular. However, the cost of entry has gone up as the concept of viral marketing has become pervasive.

In general a well-executed viral marketing campaign can cost anywhere from $100K to many millions. There is a reason that sites like Priceline.com Europe and Facebook, which everyone believes were made popular by viral marketing, have spent at least $50 million each becoming a household name.

Some startups not only ignore this and don’t budget for it, but they actually plan on the free viral marketing to generate enough revenue from click-through advertising to fund operations and future growth. That’s a double death wish.

We have all heard of a few cases where viral marketing resulted in a message “spread through the Internet like a cold in a kindergarten,” but counting on this can just as quickly lead to the death of your startup. Unless you have very deep pockets, plan for some very significant marketing costs to kick-start your dream.

Marty Zwilling