6 Work Activities Are Required For Business Success

After many years in business, I’m convinced that none of us has the strengths and interest in all the areas needed for success, including solution changes, finance, marketing, and operations. Trying to do everything is a sure way to maximize stress, lower job satisfaction, and minimize productivity. We all need to play to our strengths, and team with others for complementary needs.

If you are a genius at invention, for example, then that is the role you should seek to keep you motivated and productive. If you are not sure of your best fit, like many people I know, I just found help in a new book, “The 6 Types of Working Genius,” by Patrick Lencioni. He brings real-life insights from his organizational health work with thousands of business leaders around the globe.

I like his model and examples from the field to help you identify the type of work that is your forte, and will likely bring you joy and energy, rather than frustration and burnout. I will outline here his six required activities of every successful business to get you started down the right path for you:

1. Wonder: identify the value and need for change. This early stage is often called the idea stage, best populated by people who see the need for change early, or always have a vision for unmet opportunities, or a better way to do things. Idea people often don’t get funded as entrepreneurs, because a new business is all about results, not just ideas.

   It’s important to remember that your passion for a new idea needs to be supported by market research and customer feedback, before you will get the credibility and support you expect to work at this stage. I recommend that you start online to find data sources.

2. Invention: create a solution that satisfies the need. If your relish the challenges of creating an innovative solution or business model, then this is the type of work you must seek. I find many technologists fit well into this category, but most of them are frustrated by required interfacing to real customers, managing business finances, and marketing.

   In my experience, competition is the biggest challenge here. If you are satisfying a real need, there are others who see the same need, and may also be working on a similar solution. Timing is important, and communication with your customer set is critical.

3. Discernment: evaluate and refine the solution. Activities here include building that first minimum viable product (MVP) without breaking the bank, and getting feedback from customers on required changes and usability. In my experience, pivots are usually required in even the best situations, and it takes a special skill to make the right tradeoffs.

   If this type of work is your strength, I’m sure you understand the need to focus on a niche first, rather than trying to satisfy the broadest possible market. This work requires market feedback, managing trials, and working with the sales team as well as developers.

4. Galvanizing: rally a team and customers for action. Even the best solutions require marketing and motivating advocates these days, with the rise of instant global competition, and flood of alternatives available via the Internet. Great people leadership and communication skills are critical here, as well as managing an organization.

   Rallying the team also requires that they be rewarded for progress and success. Some people are very good as defining metrics, roll-out programs, and reward systems for marketing and sales programs. Assess your satisfaction and ability for this type of work.

5. Enablement: provide support and human capital. These activities require a focus on building relationships with and hiring the right partners for your business, providing funding and facilities, and managing cash flow. Satisfaction comes from the gains you get from highly engaged teams, and the revenue and brand scaling to new marketplaces.

6. Tenacity: make sure desired results are achieved. If you are a problem solver at heart, who never gives up, and enjoys setting and beating deadlines and metrics to show success, then this category of activities is for you. For some people, having and following a repeatable process is satisfaction, while for others, it is winning in a changing world.

Overall, I can easily extrapolate work mismatches in people’s interests and fit to the appallingly low engagement levels I see in the workplace today, as well the high failure rate for new startups. You can help change all this, as well as improve your own well-being, by realistically assessing your own skills and interests, and actively seeking the right roles at work in every opportunity.

Marty Zwilling

*** First published on Inc.com on 10/17/2022 ***

Here Is How To Win Today With The Customer In Control

Today’s customers are much more in control of their buying decision, as they have more choices and more information than ever before. Almost instantly, via the Internet or on their smartphone in the store, they can find the lowest price alternative or their favorite features, without waiting for push marketing or listening to your best sales person.

This can be an advantage to startups who don’t have the resources and brand awareness of mature businesses, if they understand and position themselves to win in the decisive moments of the new customer buying process. These decisive moments, and how to respond, are outlined in Robert H. Bloom’s classic book, “The New Experts: Win Today's Newly Empowered Customers.”

Bloom is a widely known expert on managing business growth, and he starts by summarizing the three key weapons of current customers, which include an instant summary of choices, prices, and features. His research indicates that they don’t have any old-fashioned customer loyalty, and they want precisely what appeals to them at the moment, preferably customized just for them.

New startups actually have a flexibility advantage over more mature businesses in anticipating and reacting to the four key decisive moments that Bloom outlines and I have observed in the new customer buying process:

1. Survive the now-or-never moment. You only get one chance to make a great first impression. If you can’t get a positive customer perception at this first moment, you will likely never get another chance – with so many other alternatives. The key to winning in that moment is to think like a buyer, not the seller. Build a relationship and trust quickly.

2. Win the make-or-break moment. You win here by getting the customer immediately engaged, and keeping him there, by knowing their interests and expectations better than any competitor or alternative. Avoid the extended period of evaluation and negotiation during which the customer will likely move to other transaction alternatives.

3. Sustain the keep-or-lose moment. The buying process is just the beginning of the customer experience, and it has to remain a good one throughout the time that your customer actually uses your product or service. Great startups manage to continually improve the relationship through outstanding follow-on support and service.

4. Capitalize on the multiplier moment. Of course you want your customer to come back, but the best ones also become your evangelists in bringing their friends to you, and broadcasting their positive experiences to the world through social media. This is a key moment where your customer acquisition costs go way down, and your profits go way up.

This new world is all about empowered customers. As an entrepreneur and startup, you should love this environment and cater to it. Many existing businesses see it as a big problem, and can’t adapt easily. That’s your chance to step in and compete at every moment of the customer buying process, usage experience, and follow-on events.

As you bring on employees to facilitate your growth, they have to embrace the new reality. Empowered customers required empowered employees, and your internal business processes have to be aligned with the same principles and the same smartphone and Internet technologies. Make sure you adopt the right hiring practices and training to keep your team responsive.

Then you have to trust the team to think and act proactively on behalf of your vision and mission. Of course, both you and they will make mistakes, which are the best learning experiences. Continuous innovation and change are the keys to staying current, reducing complexity, and delivering the winning customer experience to keep you ahead of the competition.

What most companies don’t realize is that businesses don’t drive customer trends anymore, customers drive business trends. Consumers are well aware of the latest technologies, and their expectations are usually ahead of even the most forward-thinking startups. It’s up to you to understand and capitalize on the decisive moments of empowered customers, or you will become a “has-been” before you even start.

Marty Zwilling

6 Reasons To Build A Working Model Of Your Solution

These days, everyone wants to be an entrepreneur, pitching their latest and greatest new idea, and looking for someone to give them money. Angel investors, like me, have long figured out that asking to see the prototype is a quick way to separate the ‘wannabes’ from serious players. Talk is cheap, but entrepreneurs who show you a working model of their idea know how to execute.

In reality, it doesn’t take a huge investment of money and time to build a prototype today. If it is hardware, look for one of the ‘makerspaces’ such as ProtoStripes, with all the tools you need to prototype almost anything yourself. Software products and apps can be quickly wire-framed with free tools such as MockFlow, or even Microsoft Powerpoint to lay out the key screens.

Here are six results that you can achieve by building a prototype, which are really the reasons that investors and partners will give you a whole new level of credibility as they evaluate your startup for potential funding:

1. Something you can touch and feel helps validate opportunity. When you wave your arms and describe your future product, everyone sees what they want to see, and it looks great. With a realistic prototype, you can get more accurate feedback from customers on their real need and what they might pay, before you invest millions on the final product.

2. Quantify the implementation challenges. Many ideas I hear sound great, but I have no idea if they can be implemented. Building a prototype at least allows both of us to ask the right questions. Visions and theory are notoriously hard to implement. A prototype has to be real enough to be convincing, without looking like science fiction.

3. Give yourself time to pivot without dire consequences. It doesn’t matter how certain you are of your solution, it’s probably not quite right. Every entrepreneur has to deal with the realities of constant change in today’s market, and it’s much easier to pivot the pre-production prototype than to dispose of unsellable inventory.

4. Show investors that you are committed, and past the idea stage. Without a prototype, most professional investors won’t take you seriously. In reality, the process of designing, building, and validating a prototype does dramatically reduce the risk, and allows everyone to hone in on the real costs of going into production.

5. Reduce the time to production and rollout. For both software and hardware technology, multiple iterations are usually required to achieve production quality and performance. Time is money, and may be your primary competitive advantage. Don’t spend your whole development budget, before finding that you need another iteration.

6. Support early negotiation with vendors and distribution channels. A three-dimensional prototype is always better than just a documented specification when negotiating contracts for manufacturing, support, and marketing. As a startup, you need all the leverage you can get.

If you are not comfortable or skilled enough to build a prototype yourself, it’s time to find and engage a co-founder who has the interest and background to at least manage the work. You should never outsource the management of your core technology. At worst, maybe you can find a trusted friend to guide you, or a nearby university with expert professors and the proper tools.

Of course, there are many commercial resources available on the Internet, including the Thomas Registry, which is an online database of 500,000 specialty manufacturers, distributors, and prototype developers, across every state and country. There are also a wealth of invention support sites, such as InventorSpot and IntellectualVentures.

Unfortunately, working with any of these outside services is hard to manage, risky in results, and some have developed a reputation for taking advantage of unsuspecting entrepreneurs. The amount of money you spend on their services is never an indication of potential success. There is no magic formula for success while inventing. Proceed with your wits about you.

Overall, building a prototype is still a great way to bring your idea to life, for yourself, your team, investors, and future customers. Your target cost expectation should be one-tenth of the total commercialization cost, with the assumption that it will be throw-away. Even still, I can’t think of a better way to validate your solution early, and get credibility with the people who count.

Marty Zwilling

7 Steps To Making An Effective Decision in Business

Based on my own experience working with business leaders in large organizations as well as small, success is all about making the right decisions at the right time. Some people believe it’s all about intuition and experience, while others are fanatics in gathering data, doing the analysis, and suppressing intuition and experience. I’m a proponent of always striking the right balance.

I’m sure you all agree that all decisions are not the same, with some being strategic for your future, and others required due to daily operational crises. For some, data collection and analysis is key, while others benefit from using intuition to get instant action. I’m always looking for some insight on how to recognize the parameters that strike that balance between data and intuition.

I found some good guidance in a new book, “Decisions over Decimals: Striking the Balance between Intuition and Information,” by Christoper Frank, Paul Magnone, and Oded Netzer. These seasoned executives and educators bring a pragmatic mix of scientific research and real-world experience to guide you, with my additions, through the following seven decision-making steps:

1. Re-affirm every case and need for a change decision. This is an important first step, since people often resist making any decision, even when the data is clear. You need to clearly show the dissatisfaction and pain of making no decision, as well as a clear vision of the ideal state. Address resistance factors, and why the decision must be made now.

   The most challenging cases are the ones where your intuition tells you that you need to be looking ahead for new growth opportunities, because the market landscape is new, and there is little quantitative data yet. Don’t be afraid to rely on your intuition here.

2. Provide absolute clarity on the desired outcome. Most teams and clients are quick to conclude on what they don’t want, but have disparate views on the best solution. You need to be clear on what success looks like, and be careful to avoid overengineering a decision with too much data or process, reducing the speed of arriving at a decision.

   Another key to this step is to continually communicate your company mission and values to all your constituents. These will solidify who you are, what you stand for, and where you're going next. Amazingly, I still find many decision makers out of touch with these.

3. Clarify how and if a decision must be reversible. Most people don’t like to make irreversible decisions, due to the risk of failure and long-term potential consequences. Identify key points in the process where the decision can no longer be undone, and provide data on when and if the scope of the decision can be reduced to be reversible.

4. Break a large decision into many smaller steps. I have found that skilled decision-makers always break down the overall decision into micro-decisions that require less time and/or have lower risk. This may not be the shortest distance between points A and B, but like sailboats tacking, you can handle new data, priority changes, and redirections.

5. Match every decision to skills, people and timing. Decisions in a crisis situation need to be made quickly, as opposed to strategic changes which may require key leaders or technologists. For most business decisions, I recommend smaller teams with short timelines to keep the focus on the nimbleness required in today’s fast-paced economy.

6. Pressure test every decision – explore the extremes. Usually this means running a pilot program and looking for outliers in the data and subjective feedback from customers. Another extreme may be the impact of doubling the budget, or cutting the price in half. For required fast decisions, consider the impact of an extended data gathering process.

7. Balance data versus intuition, and seek consent. Consent is about making fast, smart, decisions, based on data and experience, and moving on. I do not recommend consensus decision making in business, where everyone has a say, and everyone agrees on a solution, since this too often leads to vanilla decisions and lost agility.

I recognize that the advent of “big data” and the Internet has led to a driving force to always rely on real data, and less intuition, in making business decisions. Yet I caution all of you to not forget the power of your own insights and opinions, and balance your data analysis against the forces driving the need for change, most notably including timing and customer needs in the future.

Marty Zwilling

*** First published on Inc.com on 10/13/2022 ***

7 Agility Initiatives To Keep Your Business Expanding

Most small businesses have now forgotten the recent pandemic, and are back to “business as usual.” They don’t realize that business as usual is gone forever. With social media and smart phone apps, real product information spreads at astounding speeds. Entrepreneurs that are not listening, not engaging, and not changing are destined to be left behind even in the best of times.

Business agility is defined as the ability to adapt rapidly and cost efficiently. It is required today for new innovation strategies, analyzing markets for new opportunities, and organizational changes. Today’s customers are much more proactive in going online for the latest information, rather than simply reacting to the “push” messages that businesses traditionally use to drive commerce.

According to a classic survey conducted by Dimensional Research for Zendesk, 90 percent of respondents asserted that positive online reviews influenced buying decisions, and 86 percent admitted buying decisions were influenced by negative online reviews. Yet there is evidence that nearly 50 percent of small businesses still don’t even have a website or go online.

If you as an entrepreneur are not “listening” to your online reviews, and not moving quickly to make changes, you are losing ground. Moving forward, you should expect the market volatility to increase, driven not only by customers, but by new technology, changing government regulations, and a surge in new competitors.

For a business, volatile markets are a source of great opportunities, as well as great risks. Every entrepreneur must be alert enough to spot the change early, and agile enough to adapt quickly. Here are some key strategies to maximize the agility required for you to survive and prosper:

1. Stamp out organizational inflexibility. Bureaucracy can appear quickly in startups as well as large companies. The real problem is inflexible people. Every organization must constantly review its hiring practices, training, and leadership to make sure the focus is on people who are motivated, open-minded, and empowered.

2. Continually watch for new opportunities. Don’t wait for your competitors to uncover new markets that you wish you had jumped into early. An agile business doesn’t wait for their current product line to fail, before planning some enhancements. The days of the “cash cow” are gone. Make sure you have a process in place to find your next big thing.

3. Rotate team members into new roles. If a key person in your organization has never changed roles, that person is likely limiting their personal growth, as well as the growth of your business. Maybe it’s time to find the real strength of your team by giving top performers additional new responsibilities, and rotating the lower performers out.

4. Define a continuous innovation culture. Innovation doesn’t happen without active leadership, a mindset of commitment from the team, and a defined process. Discipline is required to continually track results, return on investment, and customer satisfaction. Let your continuous innovation become your sustainable competitive advantage.

5. Foster a performance culture, and avoid analysis paralysis. A strategy of speedy execution is required. If you organization routinely thinks in terms of months or years to make any change, it’s falling behind and probably already obsolete. Don’t wait for expensive outside consultants to tell you it’s time to change, or make it happen.

6. Practice small change experiments often. The “big bang” theory of change, where innovations only come through huge and expensive new projects, with big rollouts, is a thing of the past. New innovations should be seen as experiments, which are inexpensive, measurable, quick to fail, and without retribution if they don’t work.

7. It all starts with agile leadership. If you are the entrepreneur, or the top executive, you set the model and the tone of your business. You can’t have an agile business without effective communication, an empowered team, and a constant influx of new ideas. Managing an agile business means managing change, not solidifying a status quo.

Business agility is simply to ability and intent to make small changes, on a daily basis, to penetrate new markets, add new revenue streams, reduce costs, and prune out products that are no longer carrying their weight. All you need to win with customers is to be slightly more visible and have a few more evangelists in the marketplace.

It’s time to take a hard look at your own business. Is it pulling ahead, or falling behind? Standing still in not an option.

Marty Zwilling

7 Forgotten Keys To Productive Customer Relationships

Entrepreneurs and business executives seem to be even more focused on their technology than the rest of us, and less inclined to listen to the voice of the customer, even if they remember to ask. Real two-way conversations with real customers, including the all-important body language, are unheard-of these days. Being connected to the Internet many hours a day is not enough.

In fact, being connected on the Internet has taken on a whole new meaning to me, since I noticed a study commissioned a while back by PC Tools, which found that more than a quarter of people using the Internet have no problem with staying online during sex. Others admit to surfing the web even during religious services. I doubt if any of these are really listening to their customers.

If you are looking for a way to get a competitive edge, now is the time to start building a relationship with your customers, which includes active listening. In a business context, here are some old-fashioned guidelines for effective listening, for you and the members of your staff who have been distracted by all the things you can now do online:

1. Forget selling while asking for customer feedback. It’s easy to focus first on selling, and to treat all customer input as objections to be overcome. It’s harder, but necessary, to resist the response urge and actively listen to customers, while logging their input for later analysis. Customers will sense the relationship being built, and both of you win.

2. Observe customer body language, as well as words. Whether it’s while listening or talking, some studies show that as much as 60 to 90 percent of the communication is nonverbal. This means meeting personally with real customers, in an environment friendly to them. Email surveys and voice response units are not effective listening.

3. Eliminate pride and ego from the equation. If your customer senses your ego is talking, they know you won’t be able to listen. Pride is good, but can easily be heard as selling. You can’t listen if the customer isn’t talking, so make sure more than half of the conversation is input rather than output.

4. Always ask open-ended questions. Questions that start with “why” invite a defensive response, and usually don’t lead to a productive dialog. You are not looking for one-word responses. More effective questions usually start with “what,” and focus on that person as a customer, rather than you, your product, or your service.

5. Pause thoughtfully rather than reply immediately. People sense that you are not listening, when you respond too quickly. Even with the best of intentions, responding on the spur of the moment often results is something we wish we had not said, or said differently. Always listen carefully for nuances, and think before you speak.

6. Respond to general comments with focused questions. Forget the script, and think on your feet to go where the discussion leads. This requirement for effective listening is why customer satisfaction online and phone surveys may identify big problems, but don’t really address customer needs for future of your business.

7. Make social network contacts into two-way conversations. Social network streams that are all output, or all input, are not effective. You need to post non-defensive responses to all inputs on a timely basis, to show you are accessible and listening. Requests for input that are thinly disguised sales pitches won’t work.

Customers want and expect two-way personal relationships with their providers, and they know that the technology now allows for this. “Push” marketing messages are perceived as clutter, and are often simply ignored. Business relationships build loyalty, in the same way that personal and peer-to-peer ones do.

My final message is that you need to be listening online and offline to what customers are saying about your competitors. Listening more effectively to current customers will maintain their loyalty, and listening more effectively to the customers of your competitors will bring you the new ones you need to grow. Talking too much can cost you both.

Marty Zwilling

Businesses Need Your Input, But Can’t Read Your Mind

Neither people nor computers can really help you as a personal assistant unless you are willing to share data about what you like, what you feel, and who and what’s important to you. Even the best technology can’t read your mind, which is why a simple Google search often gives frustrating and irrelevant results, and online advertisers bombard you with opportunities of no interest.

In addition, consumers have traditionally been reluctant to share personal information with any non-human entity, fearing some misuse or privacy invasion. As an advisor to entrepreneurs and a technologist, I’m happy to report that the tide may be turning, and we are experiencing a new era of opportunity for entrepreneurs, and a new appreciation of the power of the digital world.

In his classic book, “Digital Context 2.0: Seven Lessons in Business Strategy, Consumer Behavior, and the Internet of Things,” David W. Norton, Ph.D., a leading researcher on consumer behavior and the impact of digital, reports that decision makers, social media users, and younger demographics are more and more comfortable sharing data in order to close the gap between thought and action.

His study breaks the online consumer audience into the following four categories, based on their level of comfort with sharing personal information, likes, and needs online:

1. High-comfort consumers – 12 percent. These are willing to share data with a variety of companies if there is a perceived beneficial effect to the consumer behind the sharing. They believe that the benefits of sharing data are very much worth the price of providing access to their data. These are typically decision makers, shoppers, and early adopters.

2. Context-comfortable consumers – 27 percent. For these people, data is willingly shared when it leads to more empowerment and better control. Examples cited include biometrics, tool productivity, environmental control, social visibility, relationship data, and brand insight. This is the most rapidly growing segment, based on year-over-year data.

3. Reluctant consumers – 44 percent. This shrinking group is willing to share location, brand history, and tool productivity data, but is still reticent to share social, biometric, and environmental data. They continue to be more strongly influenced by traditional purchase motivators, such as store discounts, recommendations, and proximity to a retailer.

4. No-comfort consumers – 17 percent. These tend to be older consumers, with an average age of 52. They neither frequently use nor derive much satisfaction from social media, and would be classified at late adopters of new technology. They still experience feelings of creepiness online, and feel more susceptible to impulse purchases and offers.

Not surprisingly, brand trust plays a big role in consumer willingness to share data online, across all categories. Google scores high for tools, location, and social media data sharing, but not for biometric data. Apple gets great marks for consumer productivity, Walmart for brand data, and Fidelity for finance data. Another key factor is perceived value, such as rewards and discounts.

The concern over the ability of companies to maintain security and a level of privacy of consumer data is still the biggest inhibitor to consumer comfort with digital systems. Continuing incidences of personal identity theft, as well major personal data breaches, including Capital One (2019), Marriott/Starwood (2018), and Yahoo (2014) still weigh heavily on their decision process.

The biggest positive is the inherent ability of digital tools and digital channels to organize and prioritize the natural consumer tendency to meander and try to do multiple things at the same time. Digital channels create queues and allow truly parallel processing capabilities for individuals, despite the daily distractions of life and business. That’s real value for everyone.

With the advent of the Internet of Things (IoT), every ordinary household object has the potential of becoming a digital tool that can communicate personal data to the owner, businesses, and other consumers. Thus it’s both a challenge and a business opportunity for every entrepreneur to expand into new markets and grow their business. Is your business ready to ride the wave?

Marty Zwilling

8 Keys To Surviving and Thriving In This New Economy

Entrepreneurs and startups are big believers in innovation, but sometimes they forget that innovation must be continual to assure long-term success, rather than the one big-bang idea that initiated their journey. By default, innovation in every business decreases over time, and continuous innovation requires ongoing initiatives and measures of customer perceived value.

The long-standing rule of thumb that companies have ten years between significant disruptions was reset a few years ago to five years, according to experts Larry Downes and Paul Nunes. From an insider perspective, 37 percent of CFOs now see the required target as a significant innovation every one-to-three years, according to a recent IMA innovation survey.

Getting innovation to happen this regularly requires some real disciple and processes. Check out the classic book, “Advancing Innovation: Galvanizing, Enabling & Measuring for Innovation Value!” by Patrick J. Stroh, which details the principles and metrics to follow for fostering innovation in any organization. Here are his key recommendations from my perspective:

1. Surround yourself with a great team. Get the right players on board and enable them to do great things. Don’t wait too long to swap out players that don’t fit from a skill standpoint or a cultural perspective. Hire slowly and fire fast. Build trust and motivation in your teams consistently, and prepare to be surprised at the speed of innovation.

2. Ensure that you have good advisors. Every entrepreneur, no matter how experienced, will benefit from a personal board of directors or advisors to guide them in facets of their business. Good advisors will tell you what you need to hear, while friends will tell you what you want to hear. You need both in business, with the insight to tell the difference.

3. Recognize that customers care about the whole experience. People pay for a great user experience, in finding the right product, buying it, using it, and getting support. Today they demand it or walk to competitors, who are not far away. When is the last time you listened to customers and clients directly, and acted on their feedback immediately?

4. Target a portfolio of solutions, not just one product. A startup may start with a focus on one solution, but long-term growth and success requires a range of solutions, with annual innovations on every one. Sometimes the hardest thing for companies to do is to retire a cash cow product, before its declining market is reinvigorated by a competitor.

5. Incent everyone on the team to be an innovator. Normally the best innovations come from the people on the front line, rather than a top manager or designer. Yet most of the people who count are often paid to make things work the way they have always worked. Remove fear of failure, then demand and measure innovation as key to job performance.

6. Give customers what they want, even if they don’t know they want it. Good people listen intently to customers, apply a knowledge of the industry, and imagine a better experience, based on insights and talent applied to unspoken customer needs. Great innovations always seem obvious and simple to customers, after the fact.

7. Align the interests of partners and other constituents. In many cases, those that appear to be your competitors can actually be your allies, and through partnerships (co-opetition) and agreements you can create more value together than you can achieve separately. Aligning interests fosters growth and innovation from all constituents.

8. You can’t improve something if you can’t measure it. Use the Innovation Value Score® approach described in the above book, or any relevant yardstick, to measure and compare with other companies and achieve more innovation value. It’s all about results, benchmarked against strategic plans and a vision of what is possible.

As the pace of change in the marketplace increases, innovation is required at a faster pace in every organization, old and new, to stay competitive. According to an often quoted McKinsey report, 94 percent of existing company executives said they were dissatisfied with their company’s innovation performance, compared to competitors.

That fact should convince you that galvanizing innovation only gets harder as your company grows and matures. Thus it behooves every new startup to build the suggested innovation practices into their culture and organization from the beginning. Catching up later is not a viable strategy for survival.

Marty Zwilling

7 Keys To A Winning Business As A Phone App Developer

One of the quickest ways to become an entrepreneur these days is to develop and publish a smartphone app. The price of entry can be less than $10,000, so the competition is huge and growing rapidly. According to Tim Cook at Apple, there are over 34 million registered developers in 2022. Yet according to other statistics, vanishing few of these ever generate a significant profit.

We all hear about the big winners, such as the game Clash of Clans, which has now surpassed $1 billion in yearly revenue, and the smartphone version of Skype, which is making huge money through credits as an extension of the website version. We don’t hear about the remaining several million apps that are mostly free, and garnering only trivial revenue through advertising.

Yet I still recommend apps as a good starting target for aspiring technical entrepreneurs, since they don’t require a large initial investment, and you can learn an incredible amount about the realities of business, without risking a lifetime of effort and several investor fortunes.

I also recommend the app development strategies outlined in the classic book, “Vaporized: Solid Strategies for Success in a Dematerialized World,” by Robert Tercek, who has lived on the digital edge for many years. Here are some ways we both recommend to beat the odds and thrive in today’s app ecosystem:

1. Sell a digital service through your app. The ideal business model is to establish a direct-to-consumer service that enables you to bill the customer directly. You provide the free app in the App Store that gives subscribers mobile access to your service. After this connection, you need not share the 30% of all revenue collected by the store platform.

2. Make your app support all platforms. Port every app to all the popular platforms – IOS and Android. Compensate for low profit by aiming for maximum reach. Cultivate a preferred relationship with Apple, Amazon, Facebook, Microsoft, and Google to ensure the best possible placement of your offering.

3. Offer premium services after user is hooked. Through a free base product, you give the first taste of the service or game away for free, get users hooked, and then convert as many as possible to paying customers. This freemium model has been used for years by web apps. Even a conversion rate of one percent can build a healthy business.

4. Build your own marketplace platform. This is a tough one to accomplish, but it has paid off handsomely for the first to win in other categories, such as Amazon Kindle and Netflix. To accomplish this move, you must remain studiously neutral on all contributors, and be prepared to fight to preserve your direct relationship with the customer.

5. Commoditize complementary products. Complements are products that must be bought together in order to be useful, like apps with mobile phones, and fitness products to go with your fitness app. If you want to drive up the demand for your core product, one smart tactic is to drive down the price of all complementary products.

6. Look for value points to control. No company has more value control points than Google, which spans advertising, e-commerce, social media, video and mobile, as well as a full suite of hardware products. But there are a wealth of other categories, new ones are constantly appearing, and the ecosystem is always shifting. Be aggressive and alert.

7. Position yourself to capitalize on the next frontier. Information is certain to grow faster than anything else generated by humans, and the Internet of Things (IoT) is a huge contributor. Apps are adept at collecting information and condensing it, whether it be for healthcare, home control, or gaming. Be there intentionally rather than randomly.

Above all, don’t forget to develop a comprehensive marketing and promotion strategy. Just getting an app accepted into the Store won’t get it found and downloaded by your targeted customers. ‘Free’ doesn’t make it stand out when there are a million alternatives at the same price. Promote your app vigorously, facilitate customer engagement, and listen to the feedback.

Marty Zwilling

5 Startup Funding Models That Depend On The Consumer

Even if you ignore all the hype around crowdfunding, there can be no doubt that it is a real alternative for entrepreneurs to achieve visibility and funding today. According to a classic article on Thrinacia, there were over 600 crowdfunding platforms in existence then, estimated to add more than $89 billion to the economy at a compound growth rate of 17% from 2019 to today.

Yet as I mentor entrepreneurs around the country, crowdfunding still seems to be one of the least understood approaches to startup funding, with more myths than accredited angels and professional venture capital investors combined. The primary challenge seems to be that the crowdfunding term is used to encompass so many different concepts that everyone is confused.

In fact, perhaps the most important model, equity crowdfunding for non-accredited investors was legalized via the SEC way back in 2016, and its impact is still not fully understood. As a summary, crowdfunding today can mean any one of the following five quite different models:

1. Rewards model. Many platforms, such as IndieGoGo, allow startups to solicit funding commitments from non-professional investors in exchange for a pre-defined reward or perk, such as a T-shirt or other recognition, but no ownership in the company. The crowd gets the satisfaction of helping, with minimal risk, and no expectation of any high return.

2. Product pre-order model. With this model, a startup pre-sells their product early, at a cheaper price, in exchange for a pledge. A much-touted early success was the Pebble Watch on Kickstarter, now owned by FitBit, with advance orders exceeding $10 million. Of course, there are thousands of other companies that don’t achieve their minimum goal, requiring all contributions to be returned.

3. Donation good-cause model. This model facilitates donations to charities and creative projects, and has been around for a long time via sites such as GoFundMe. No startup ownership or financial return should be expected, but contributors can enjoy the satisfaction of furthering non-profits or causes with a passion to change the world.

4. Interest on debt model. In this model, often called micro-financing or peer-to-peer lending (P2P), people contribute with the intent to create a pool for all to borrow against. This model been popular in many countries for years, where banks loans are not available, via sites such as LendingClub and Kiva. The allure is the ability to get small loans easily, or excellent returns from the interest, but the risks are high.

5. Startup equity model. In the U.S., only accredited investors can use crowdfunding sites such as EquityNet to buy ownership in their favorite startup. In Europe, other investors can buy equity, with platforms such as Seedrs. Equity investing is very risky, but huge returns are possible if you pick the next Facebook, but failure means your entire investment is lost.

Beyond these models, the crowdfunding term is often used interchangeably or confused with crowdsourcing idea and open source development sites, such as BrightIdea, to get your ideas off the shelf and give you the wisdom of the crowds, or IdeaScale to facilitate the outsourcing of application development in an open source call to others on the Internet.

Other popular sites for startups, including StartupNation and Startups.com are not for crowdfunding, but actually are matchmaking sites between entrepreneurs and professional investors or banks, or incubators. These sites often sponsor pitch contests with small cash prizes for funding, as well as other valuable services to support entrepreneurs.

In fact, entrepreneurs can and do gain from any and all of these approaches, either by achieving some funding, or at least testing their approach and the level of public interest in their startup idea. Smart entrepreneurs often learn the most from their failures, using the feedback to pivot their solutions before squandering a large investment from friends, angels or VCs.

Concurrently, I am seeing an upswing in the number of entrepreneurs and startups, with the cost of entry at an all-time low, and the new focus on entrepreneurship in every university and every community development organization. Since there is never enough money to feed the startup beast, I don’t see crowdfunding replacing or crowding out angels or VCs in the near future.

Marty Zwilling

6 New Venture Funding Realities To Guide Your Efforts

Venture capitalists (VCs) have long been seen as the top of the pyramid for startup funding sources, but in fact angel investors now fund over twice as many companies, according to a classic Crunchbase article. A major chunk of this activity is provided by the newer class of “super angels,” who often look more like micro-VCs, except that they are investing their own money.

Examples of some leaders in this space include Ron Conway in Silicon Valley and Jeff Bezos, CEO of Amazon, who each may have over 500 startups in their portfolio. What characterizes them is the number of companies they invest in, as well as the size of their investments (often less than $250,000), and the seed or startup stage where they specialize.

Based on the best evidence I can find, the genesis of this trend and the advantages come from several evolutionary changes in the startup investment industry, and some innovations driven by the recession several years ago and the recent pandemic:

1. Venture capital funds are regaining momentum. Institutional venture capital dispensed in 2021 reached record highs of almost $330 billion, up significantly from the last few years. Individual angel investors and crowdfunding have been adding to the momentum, some say exceeding VCs in total amount invested.

2. The cost of entry for tech startups continues to go down. Twenty years ago, it cost several million dollars to launch an e-commerce startup, which can be done today for a few thousand dollars. Mobile and web software apps may cost even less. The large investment amounts preferred by VCs are no longer needed to launch winners.

3. Some VC firms are bogged down by their own weight. Many have disappeared, and others have forgotten how to be agile and innovative. They have too many highly paid partners, fat fees, an aging corporate infrastructure and difficulty raising money from institutions. Super angels are individuals or small teams using their own money.

4. VCs are committed to servicing existing portfolios. As lifecycle investment partners, they have become weighted down with portfolios still recovering from the economic downturn. Like big corporations with a heavy investment in existing product lines, it’s hard to stop linear investing to look for innovative new opportunities.

5. The investment model is changing from hard selection to “spray and pray.” The conventional VC approach of giving a big boost to a few good startups that were born to be great, doesn’t seem to work anymore. Now the model is to seed many good teams with a smaller amount, and find out which ones can execute.

6. Super angels have greater scope to match talent with a startup. Because of their high visibility and huge portfolios, this new class of investors can match the right talent to the right startup quickly and efficiently with introductions and mergers. This helps the startups with the most opportunity move forward quickly to greater success.

Of course, every new direction has some challenges, so the super angel model isn’t perfect. Here are a couple of concerns and possible negatives to avoid:

• More startups left in the funding gap. Angels of any size are usually not as capable or interested in multiple rounds of investment, leaving good startups that are not superstars stranded without funding after an initial round or two. VCs tend to carry their partners much longer, in hopes of a big public offering (IPO) that could produce a windfall.

• Super angels sometimes drive up valuations. Perhaps because of their focus on building a large portfolio, or their competitiveness, these angels sometimes accept valuations that cause later friction while moving to VCs, or even other angel groups. This can cause early investor dilution, lower ultimate returns or leave the startup stranded.

Yet, in my view, every early-stage entrepreneur should be exploring this new funding alternative before approaching VCs. It’s the right way to get money without giving up too much equity or control of your business. Yet, it is important to remember that the most optimistic super angel is looking for a proven business model, rather than research and development, or just an idea.

Marty Zwilling

How Baby Boomers Fit In The Realm Of Entrepreneurship

One of the biggest myths in the business world is that startups are no place for Baby Boomers, that aging generation born between 1945 and 1964. They couldn’t possibly understand the new social media culture, new technologies, or have the determination to beat their younger counterparts in the market. Yet credible reports on current trends tell us just the opposite.

According to a report last year from the Kauffman Foundation, the highest rate of entrepreneurship in America shifted a few years ago to the Boomer age group, compared to Gen-X (1965 to1980) and Gen-Y (1981 to 1995). Today people over 55 are almost twice as likely to create successful startups as Gen-Y, age 20 to 34.

Another report from the Pew Research Center confirms that Boomers are still a third of the workforce, equal in size to the Gen-X segment and the Gen-Y segment. Don’t expect them to go away any time soon. Pew says the Boomer demographic is the largest mainstream pool of experienced talent in the market today, and will be for the foreseeable future.

Their trend toward entrepreneurship in that group is sometimes called seniorpreneurship, where people over 50 take the helm of a new leading-edge high-opportunity venture. They include people like Sir Richard Branson, born in 1950, who has founded over 400 companies, and claims to be just getting started.

In fact, they are well-qualified overall, having worked with high technology and computers for at least 20 years, are highly educated, and highly motivated. In addition to being the startup entrepreneur, there are other key roles where Boomers can be a force in driving successful startups, in concert with leaders from Gen-X and Gen-Y:

1. Early-stage angel investors. Boomer investors are much more likely to get in the game with a high focus on mentoring and give-back, as well as the financial return potential. They want to share your satisfaction in success, maybe as a reward for their own mistakes and learning earlier in life in their own businesses.

2. Supportive co-founder and executive positions. Every young entrepreneur needs an experienced partner for credibility with investors, and as a trusted cohort for strategy and growth discussions. Often the Boomer is more willing to work for equity, and easily convinced to step aside when revenues reach that next threshold.

3. Member of the Advisory Board. Every startup needs two or three key advisors who have the domain experience, connections, and complementary skills to guide the founders through those early crises. Boomers are more likely to give you the time and guidance that you need, and give your executive team additional visibility.

4. Manage customer service. They probably have arbitrated differences many times before in their lives, and know how important it is to remain calm and soft-spoken in the face of emotional customers and processes that are not working. Often a little gray hair gives added credibility to their efforts, and provides a role model for other support roles.

5. Personnel Manager. This is one of the key roles in a growing new company which can benefit from someone who clearly has experience dealing with people – whether it be hiring and firing, assisting in performance reviews, or dealing with the day-to-day crises of any growing business. All the learning from parenting pays big dividends here.

On the other hand, there are some roles in a startup where Boomers are probably not the best candidates:

• Constantly-on-the-road sales territory management roles.
• Software and hardware development architects and designers.
• Marketing and sales to Gen-Y customers.
• Labor-intensive roles, including warehousing and construction.

For aspiring new entrepreneurs of any age, this is an opportunity for a win-win situation, with the proper mix of Boomers with Gen-X and Gen-Y employees and executives. It’s time to think again that the domain of entrepreneurs is only for the under-35 crowd.

The large crop of Boomers is only going to get larger as we live healthier and work longer. You too will be one someday, if you are not already. Be inclusive, and let’s continue to make entrepreneurship one of the most fun things around.

Marty Zwilling

7 Indications Of Your Ability To Get Business Results

As a startup mentor, I’m always amazed that some entrepreneurs seem to be an immediate hit with investors, while others struggle to get any attention at all. Finally I realized that venture capital and angel investors are actually humans, despite some views to the contrary. As with most business and personal interactions, first impressions tend to become lasting ones.

Investors know that building any business is a challenging and risky proposition, so they start with entrepreneurs who give a first impression of passion, commitment, and work ethic to succeed. There is no room in this realm for negativism, excuses, or lack of confidence. People like Elon Musk, who have the energy to work 100-hour weeks for years, will always attract investors.

But the right personal characteristics are just the beginning. Successful businesses are measured by their results, so relevant skills, attention to details, and problem-solving abilities are critical. Early in the relationship, every investor instinctively looks for some key indicators of the ability to get results, like the following:

1. Communicates well in every business medium. Some entrepreneurs love to talk and produce videos, but hate to write anything down. Others send investors email and business plans in all uppercase or no punctuation. Effective communication requires real listening, as well as talking. Message delivery must be customized for each investor.

2. Surrounded by the right people and track record. It takes more than one person to build a business, so the lone entrepreneur, without support from any visible team, advisors, partners, or potential customers, will not attract investors. Of course, previous successes provide more direct evidence of a network of the right people.

3. Exudes integrity, humility, and stability. Even business plan has strengths and weaknesses, and the best entrepreneurs are able to recognize the difference. They seek to establish win-win relationships with all partners, including investors, and treat them all as trusted advisors, rather than win-loss opportunities.

4. Registered patents and other intellectual property. From an investor perspective, understanding and acting early to establish a sustainable competitive advantage, and barrier to entry, is the best assurance of a financial return. Being the first mover or lowest cost is not a good long-term strategy.

5. Already set and achieved initial milestones. Contrary to popular belief, most investors are not looking for entrepreneurs who are desperate for funding. They prefer to see a rational staged plan, already in progress, with some checkpoints achieved, as well as future ones planned. A proven business model, ready to scale, is particularly attractive.

6. Evidence of adaptability and flexibility. A strategy of learning and willingness to pivot, based on market feedback, is a great survival skill and attitude, cherished by investors. Rather than hide seemingly non-productive gaps in your work to-date, investors look for logical actions, and iterative small steps that could be quick to market or quick to fail.

7. Expert in your chosen domain. Many key insights to success in any business can’t be learned from books or the Internet. There is no substitute for experience and trained skills in the business area you are attacking. In this context, investors are attracted to thought-leaders visible on social media, and people with strong technical credentials.

By definition, entrepreneurs need to love the art of the start, and that love needs to come across as part of the first impression you deliver to any investor. Since your product or technology may still be in the early stages of development, the investor in actually investing in you, and your previous achievements, as much as your current startup.

My advice is to start your networking early with potential investors, to establish a relationship before they see you as an entrepreneur asking for money. The strengths of those early relationships can override all of these results indicators, and let you fly with the angels without a second look when the time is right.

Marty Zwilling

10 Keys To Raising Your New Venture Funding Potential

Valuing a business based on assets and financial performance is a well-understood process, but every investor knows the real value goes well beyond these parameters, either higher or lower. The key elements of leadership in a company, both individual and organizational, are less tangible, but very critical in setting a market value for investment, acquisition, or going public.

In the investment community, these leadership elements are often called “goodwill.” For early-stage startups, the goodwill component can easily exceed the size of all the financial elements together, or can just as easily mark a company with good financials as not investable.

In his classic book, “The Leadership Capital Index,” Dave Ulrich, a best-selling author, business consultant, and business school professor, provides some real insights and metrics on what makes up the elements of goodwill in the minds of top valuation experts. I have paraphrased his key points here as follows:

1. Leader personal impact. For startups, the entrepreneur and founder is almost always the face of the company. Investors, partners, team members, and customers implicitly value or devalue a startup based on the leader’s physical presence, emotional identity, social skills, intellectual agility, moral values, and past performance in the domain.

2. Strategic proficiency. These same constituents are looking for leaders who can create the future – focus forward rather than backward, seem to see around corners, can turn their vision into committed actions, and are able to engage all the right people into bringing the future into the present.

3. Execution leadership. Everyone wants leaders who get things done and meet commitments. Leaders are judged on key elements of execution, including a focus on priorities, ensuring clear accountability, managing decision making, mobilizing others, adapting quickly, and communicating execution urgency.

4. People relationship focus. No leader can do the job alone, so investors assign great value to leaders who take care of their people. Positive people management elements include good communication skills, building strong teams, finding time for coaching, strong people relationships, and facilitating growth and succession.

5. Leadership brand development. Every business and brand has unique requirements to fit into their market environment. Leaders are assessed for their ability to fit into the brand community, embody the values required, maintain the right strategic priorities, and deal with the current organization stage.

In addition to goodwill justified by a great leader and an outstanding team, investors will use their due diligence process to assess the organizational structure and effectiveness as well. The key parameters of this evaluation will always include:

1. Strength of the business culture. Research has confirmed that culture is a primary driver for financial performance, customer experience, and team productivity. Companies are valued based on their ability to create and align their people with the desired culture, and their ability to communicate that culture to customers, suppliers, and partners.

2. Focus on talent and people growth. Investors want organizations that manage people talent and growth, through good hiring, performance feedback, development on the job, and building commitment. They look for the use of talent analytics, such as productivity per employee, as well as the practices and attitude toward employee satisfaction.

3. Performance accountability processes. Good performance management is more about rewarding desirable behavior than penalizing bad performance. Processes must be in place to clearly define standards, differentiate performance, link to consequences, provide rewards for accountability, and provide regular follow-up.

4. Modern information management tools. Power, and the ability to influence others, comes from knowledge. Having information is more than access to data; it requires knowing how to synthesize, interpret, and act it. Organizations are assigned value by how well they take advantage of the best technology, and turn information into action.

5. Stable and friendly work environment. The most valuable organizations are able to govern their work environment through innovation, to cope with the increasing pace of change in culture and the marketplace. This means adapting to social trends, new technologies, economic conditions, regulatory requirements, and worker demographics.

Investing in strong leaders, including entrepreneurs such as Steve Jobs, or corporate icons such as Jack Welch, has long been recognized as a key to reduced risk, and the key to high valuation on the side of the seller. That’s one of the best reasons I know for every business owner to up his game on leadership and organizational excellence. How much goodwill can you and your company command today?

Marty Zwilling

10 Leadership Traits To Inspire Every Startup Founder

People who have been followers too long as an employee don’t realize how hard it is to be a leader. Every new entrepreneur has to initiate the right actions to be perceived as a leader in their chosen business domain by their team and by their customers, or the road to success and satisfaction will be lost along the way.

Driving these actions are some basic principles that entrepreneurial leaders, such as Airbnb CEO Brain Chesky and LinkedIn CEO Jeff Weiner, seem to have learned early. These have helped them build trust and confidence among team members, and effectively sell their message to partners, investors, vendors and customers.

If you want to be like them, it’s time to take a hard look in the mirror to see how many of these actions already show in your persona, and which need a bit more of your focus and learning:

1. Ability to communicate clearly where you are going and why. This requires that you first know who you are and what you stand for and have a vision for change. Then you need to be willing to communicate that vision to everyone around you. People won’t follow you if they have no idea where you are headed and why it’s good for them as well.

2. Feels a passion and commitment to the cause behind your business. This conviction is what motivates everyone around you to their best efforts, and keeps them going in hard times as well as good. Building a business is harder than it looks. Seth Godin said that “the average overnight success takes six years,” and he is an optimist.

3. Can demonstrate domain expertise and experience. In any business domain, there is no substitute for skills acquired by personal experience to supplement any academic training and the Internet. You have to lead by example, setting a personal standard for competence for all to follow if you intend to lead your competitors and customers.

4. Constantly strengthening your network of relationships. No entrepreneur can build a business alone. Your network of connections needs to grow with you and your business. That only happens if you take an active role in your community and relevant business associations with like-minded people. Make an honest effort to help others.

5. Willingness to make timely decisions and take action. Remember that a good decision made early will more likely save your business than a better decision made later. In general, any decision is better than no decision. Smart entrepreneurs take reasonable time to consider alternatives, and then move forward, never looking back.

6. Practices self-discipline and calm predictability. People don’t like to follow a leader who is unpredictable, inconsistent and prone to daily changes in direction. Authentic leaders are willing to open up and establish a connection with everyone around them. They build trusting relationships that result in loyalty and commitment from others.

7. Encourages innovation and out-of-the-box thinking. In business, this means fostering a mindset of creativity, risk-taking and continuous improvement. Don’t wait for competitors to force the need for better products, lower prices and better customer service. Reward failures as well as successes if the result is a lesson that advances the company.

8. Allocates adequate resources to overcome constraints. Hoping for good luck and applying pressure is not leadership. Being able and willing to size and allocate the resources to win the small battles will ultimately win the war. This means hiring the right people, providing training and tools, and improving systems to overcome challenges.

9. Incents business growth and people's well-being. As a role model, you must continuously upgrade your own skills, be alert for new developments and hone your listening ability. It means rewarding team member growth, no punishment for failures and opportunities for success. This applies to suppliers and business partners as well.

10. Always accepts responsibility for business actions and results. Entrepreneur leaders don’t need excuses, like a down economy, bad timing or demonic competitors. Every company and every one of us makes mistakes, which are a normal consequence of tackling new business challenges and unknowns.

The good news is that no one is a born leader -- all of these habits and mindsets can be acquired by learning and a determination to improve. Leadership doesn’t come with success, but success does come with leadership. Don’t wait for someone else you can follow -- you want your team, as well as customers, to follow you.

Marty Zwilling

10 Strategies To Mitigate The Challenge Of Leadership

Most new entrepreneurs don’t anticipate the burdens of being the leader, including the sense of loneliness and isolation at the top. People outside the team can’t relate to the pressures of “the buck stops here,” and everyone on the team assumes that they are the primary ones under pressure to deliver. Even in a single entrepreneur startup, the leader carries a heavy weight.

This unexpected burden often results in a dysfunctional startup, as the entrepreneur reverts to micro-management, burnout, or even grandstanding to get some attention or sense of direction and feedback. Those who have big egos often fall into the use of intimidation, edicts and even deception. Of course, that only leads to antagonism and further isolation.

As with other challenges, it takes effort and a special focus to lessen the burden and avoid the loneliness of being a founder or top executive. Here are some key approaches endorsed by successful entrepreneurs and leaders to stay healthy, and be a respected leader:

1. Seek guidance and affirmation from your peers. Every business domain has organizations of peers, such as Vistage or Entrepreneurs’ Organization (EO), where entrepreneur leaders can find and give support, and resolve problems with no jeopardy among like-minded leaders who face similar challenges.

2. Actively solicit input from trusted members of your team. Even if they don’t see you as a peer, it’s your view that counts here. Don’t isolate yourself. You can always learn from the experience of others on your team. If your startup is a one-man show, there are outside advisors who can offer you an unbiased view as a team member.

3. Keep your family and friends in sync with you as peers. Their feedback and perspective is vital to your health and success, if you maintain a balance between business and personal. Their guidance will help to keep you centered and effective. The best leaders learn to sometimes say no to work, and learn how to mix work and play.

4. Separate your work and play environments. Everyone needs a regular change of scenery and separate time to switch modes from work to external challenges. These outside activities may be sports, non-profits or family activities where you can change roles, rely on someone else for leadership, or simply relax and recharge.

5. Interact with customers in a non-pressure situation. Social-media vehicles, including Twitter and LinkedIn, allow interactions with hundreds of people, or one on one, without the pressure of your leadership role. Use the opportunity to anonymously test new ideas and strategies, with direct and unfiltered feedback.

6. Proactively schedule business networking opportunities. Take the initiative on a regular basis to ask for time with peers or even competitors that you respect, without waiting for them to come to you. This not only counters isolation, but helps balance your business focus, and keep you up to speed on new developments in your industry.

7. Actively improve your charismatic image. Charisma is that magnetic energy implying confidence and strength, arousing loyalty and admiration from others. Charismatic leaders don’t succumb to loneliness, and develop a wide range of positive habits. Key elements of charisma are listening actively to others, and reading body language.

8. Inspire and empower your team members. The more you empower others in your organization, and the better you communicate your vision, the more they will be with you at the top. You won’t be lonely when you feel the team is with you every step of the way. This will strengthen the business for all of you, as well as relieve your burden.

9. Share your fears and challenges with selected insiders. Too many entrepreneurs like to pretend that they have it all together, all the time. It’s healthy and productive to be more transparent with trusted team members and advisors. This leads to sharing progress on struggles, and discussing ways of mitigating business problems.

10. Join your board of advisors, rather than contend with them. Accept that a good board will tell you what you need to hear, rather than what you want to hear. They really are on your side, so there is no need to be defensive or isolate yourself. Join them in actively looking for ways to lighten your burden at every opportunity.

More focus on improving your personal motivation is also a clear antidote to the burden of leadership. Of course the best antidote is incremental success and seeing real results, giving you the positive feedback that we all need. Make your leadership role the source of pride and accomplishment that attracted you to the entrepreneur lifestyle in the first place.

Marty Zwilling

6 Keys To Becoming An Emotionally Intelligent Leader

Based on many years of experience in business as an executive and consultant, I have long been convinced that emotional intelligence (EQ or EI) in leadership wins over logical intelligence (IQ) every time. The experts define emotional intelligence as a leader's ability to recognize individual and team emotions, to understand their effect, and manage your own to guide your next move.

However, when aspiring leaders ask me how to ramp up their emotional intelligence, I’ve never been able to offer any real formula. Thus, I was pleased to see the steps detailed in a new book, “The Emotionally Strong Leader,” by Carolyn Stern. She is the President and CEO of EI Experience, and has years of experience training business leaders across the continent.

I enjoyed her recommendations and real-life stories as well as her self-coaching advice, which I will paraphrase here, combined with my own insights from the field:

1. Take a hard look in the mirror to see yourself today. Self-assessment is necessary to confirm the disconnect between what kind of leader you are today versus how you want to be. This will allow you to see your strengths, weaknesses, development opportunities, and break down internal barriers to growth and change, without judgment or criticism.

   It is especially important for you to recognize your life’s purpose, and understand how it is driving your leadership. I find that some leaders are so driven by purpose, that they fail to relate to other people, or recognize what it takes to motivate other team members.

2. Understand how trusted colleagues perceive you. We all have blind spots, so it is impossible to assess yourself totally objectively. Identify and interview a few trusted advisors to gather their perceptions of your current reality. Always assume positive intent, stay present, be open-minded, actively listen, the thank the person for their feedback.

   It’s important not to be defensive in listening to feedback. I recommend that you suppress your own emotions and ego during this process, look for the deeper message behind the feedback, and play back what you hear in your own words to make sure it is understood.

3. Confirm your goal to be an emotionally strong leader. Now that you know your leadership gaps, it’s essential that you accept the challenge to change your behavior. The next step is ask why you do and say what you do. You are more likely to succeed if you accept what you need to do, believe you can do it, and are motivated to get there.

   It may help to review the evidence that emotionally strong leaders have a consistent advantage in business. For example, many have found that they are suddenly able to turn other people's fears into gratitude and even loyalty, rather than non-engagement.

4. Identify the roadblocks which may limit success. This process is an iterative, two-step cycle of brainstorming the possibilities for action and outlining the barriers in the way of that action. Barriers open up new possibilities, which themselves will likely have barriers. The end goal is to dissolve the roadblocks getting in the way of your success.

   Don’t be afraid to ask for help during this process. Mentors and coaches are always willing to help you find creative ways around roadblocks, even ones you don’t even see. In addition, now is the time to call on advocates and friends who want you to succeed.

5. Craft an action plan with milestones and target dates. To achieve our goals, we all need an action plan, broken down into bite-sized chunks, to plan a course and end result. This will help you stay motivated, overcome procrastination, and ensure that you are on track to achieve your goal. Plan for a few stumbles and pivots along the way to success.

6. Commit to following through on your goals and plan. This step is all about accepting accountability, which needs your constant attention and nurturing. In my experience, most leaders have a few relapses, and often need to find an accountability partner to check in with you, and call you out on any excusatory language, to get you back on track.

I can attest from my own personal experience that changing your emotional style is hard, and should be seen as a journey, rather than a destination. Yet from what I see and feel, using it effectively will allow you to boost your own productivity and well-being, as well as your team engagement in every business I have seen. There is no time like the present to get started.

Marty Zwilling

*** First published on Inc.com on 9/25/2022 ***

5 “What-Ifs” To Include In A Startup Financial Model

If you think that financial modeling for a new business is arcane magic, limited in value to financial wizards and professional investors, then you have been listening to the wrong advisors. In reality, a simple Excel spreadsheet model customized around your assumptions can save you hours and avoid a wasted expense in validating alternative vendor and marketing decisions.

The way to start is with a sample financial model, available from many sources on the Internet, such as over 200 downloadable free from the Corporate Finance Institute website. Another alternative is to build one yourself, starting with a few formulas to extrapolate early revenues and expenses into the five-year projections normally requested by banks and investors.

Don’t try to build the “ultimate” business model, for all possible alternatives, in multiple business domains. For maximum value with the least effort, focus on only the “what ifs” that are the highest priority in your mind for your own startup. In my experience, the top candidates will include the following:

1. What if you have to cut your targeted price? Pricing is always a tricky issue. Vendor costs are subject to change, customers are fickle, competitors come out of the woodwork and the economy can take a downturn. You need to quickly calculate the long-term impact on profitability of pricing and business model changes.

2. What if you need to change your market size and volume projections? The manual calculations to translate market assumptions into costs, volumes, expenses and net return are massive. Yet they can be done by a simple financial model in a few milliseconds. Investors will test your savvy by asking where your business breaks.

3. What if your growth and scaling projections are too aggressive? Most entrepreneurs realize that doubling their revenue each year puts them in a premium category with investors, so that may be your first target. But targets need to be adjusted as the reality of early returns sets in. Projections you know to be wrong won’t help you.

4. What if I offer you only half, or double, what you ask for? With a financial model, it’s relatively easy to apply these amounts to your marketing, manufacturing and administrative costs, as well as business volumes, to predict the impact. Your credibility with investors, and your confidence in any request, depends on these answers.

5. What if your customer acquisition cost assumptions have to change? The cost to acquire a customer, or traffic to conversion ratios, are critical to the success of most startups. This can be projected top down from market share assumptions, or bottom up from actual costs and sales results.

The time to start building your model is even before you incorporate the business and spend real money on building products. Just like planning a long trip with your car, you need to know where you are going before your start, or you probably won’t get there. If you are not computer literate, it’s never too early to find a partner or learn tackle this critical element of every business.

The financial model obviously has to be built in concert that the overall business and pricing model that you are implementing. The most common business models these days include the subscription model, freemium model and ecommerce. Each has a different set of variables for sales, revenue flow, marketing costs and personnel.

Creating a financial model is perhaps the only way for you to see key areas of strength and weakness in your business, before the money is spent and it’s too late to recover. It’s a great learning experience and is not rocket science, so you can do it yourself. But don’t hesitate to ask for help from a professional if you need it.

You may be surprised how clear the relationship appears between product pricing, cost and customer count. You will quickly understand the old adage that if you lose money on every customer, it’s hard to make it up in volume.

Marty Zwilling

8 Parameters To Bracket New Venture Funding Requests

One of the big questions that every entrepreneur struggles with is how much funding they should request from investors in the first round. They know from forums such as Shark Tank on TV that asking for either too much or too little will derail credibility in the eyes of the investor, and leave the entrepreneur with no money and a struggling startup.

Strategies that I do not recommend include opening the discussion with a big number, hoping to make a more reasonable value feel like a good deal, or starting with a tiny number, hoping to entice interest from everyone. Both of these will brand you as an amateur to avoid, rather than a savvy business person with an exciting new opportunity.

The right answer is to ask for an amount that is just right, based on your real needs, and consistent with the capabilities and interests of the investors you are addressing. Here are eight key questions that will you get in the right ballpark with the right investors:

1. Who is your investor audience? Every type of investor has comfortable ranges and limits. Angels usually won’t consider requests above $1 million. On the other hand, venture capital organizations typically look for needs that exceed $2 million. If you are talking to your rich uncle, do your homework to find his limits before you meet.

2. What business milestones have you met? If you have a good idea, but haven’t started yet, only friends, family and fools will likely be interested. Angel investors will perk up if you have a prototype or a few real customers, while venture capitalists will likely choose to wait until you have achieved several million in revenue or customer count.

3. How much do you really need for the next 12 to 18 months? Here is where projections of cost, pricing, volumes and cash flow are critical. If your financial model projects a negative cash flow in this period of $400,000, you should buffer this amount by 25 percent, and ask for $500,000. Be prepared to explain your business model.

4. Can you justify your use of funds to this investor? Professional investors expect to see your top three use of funds categories, and how these relate to scaling the business, rather than initial development. Ancillary objectives, like retiring existing debt, buying a building or paying salaries to people with equity ownership will not get traction.

5. How much equity ownership are you willing to offer? This is all about setting a credible current value on your startup -- not future value. If you ask for more money than your company is now worth, no investor will bite. The average valuation for angel investments is $2 million, which will get you $500,000 for 20 percent of your startup.

6. Are you flexible on the terms of the investment? Most professional investors will expect preferred stock, a board seat, rights to later rounds and perhaps anti-dilution protection. If you refuse to offer these, or balk at negotiating even more restrictive terms, the amount of a viable investment will be compromised.

7. Are you willing to offer milestones for staged investment delivery? Many investors like to reduce their risk by delivering their investment in stages or tranches, based on your successful achievement of specific milestones during the period covered. However, this reduces your ability to plan or pivot quickly based on unforeseen events.

8. Can you project a compelling rate of investor return? Equity investors typically look for 10 times return projections, since they expect many of their investments to fail totally. The best way to show return on investment is to declare an exit strategy, such as being acquired or going public in the next five years, which allows the investor to cash out.

In fact, the most successful entrepreneur strategy is to bootstrap or fund your own startup, such that you don’t need to expect or require any external investor involvement. Despite all the hype you hear on attracting investors, more than 75 percent of startups are still self-funded, and avoid the hassle of dealing with partners and giving up a portion of the company.

The best and happiest entrepreneurs build a successful startup that attracts investors, rather than waiting for an investor to find them and kick-start their success.

Marty Zwilling