5 New Venture Surprises With Ways To Recover Quickly

Most entrepreneurs are so convinced that they are the disruptive element, they fail to anticipate that unknown facts or events can and will occur to disrupt their own well-laid plans. While it’s true that there is no way of know specifically what might happen, you need to anticipate the worst, and actually build a Plan B. People who haven’t thought about a Plan B often don’t survive the shock.

In my years of mentoring and working with startups, I’ve seen and read about some amazing disruptions, as well as recoveries, and I’m sure each of you could add your own. For example, you probably didn’t realize that both Facebook and YouTube started out intending to be dating sites, but implemented a Plan B when they found dating had become an over-saturated market.

While thinking about the most common surprises that I have seen with startups, and contemplating how to best prepare for them, I found some good guidance in a classic book, “Think Agile,” by successful entrepreneur and startup advisor Taffy Williams. I will key off his list of situations requiring dramatic plan changes, as well as the best ways to plan for these changes:

1. Indispensable people jump ship at the worst possible time. The surprise departure of a key staff member is inevitable, no matter how strong the financial and passion incentive. Every entrepreneur needs a succession plan early on the top three people, with a reshuffle and replacement strategy. Get to know your headhunter or freelancer.

2. Your rollout timetable suffers a big setback. You can’t predict big quality problems, funding shortfalls, and viral events that don’t work. You can and should create realistic time ranges around deadlines, and work up “what if” scenarios around your milestones. Don’t succumb to blind optimism, or pressure from investors to go for broke.

3. A new market opportunity emerges which you can’t ignore. It’s not just undesirable circumstances that require big plan changes. Natural disasters or economic conditions can create new markets, or an offer to partner or merge may materialize suddenly. The agile way to respond is to research for flaws in the opportunity, and test the waters first.

4. Your biggest or only customer dumps you. This can happen through no fault of your own, or rapid market erosion you didn’t foresee. Your Plan B should always include a diversification plan you can implement quickly, as well as an emergency “right-sizing” plan to weather the gap to some new customers or services.

5. Another disruptive technology trumps yours. What seemed like a winning technology, like RIM with its Blackberry, can quickly be superseded by a new entrant, such as the iPhone from Apple. Every startup needs to build and monitor their list of top competitive risks, and size the cost of a quick direction shift if the worst case happens.

Each of these initiatives has to be led by an entrepreneur who is willing to manage with an open mind, not only during the formative stages of the business, but also during the growth stages. Most entrepreneurs start losing their agility with that first taste of success. The best ones are often viewed as paranoid, since they proactively look for problems well after the first success.

One of the best ways to increase agility is to focus on specific problems and drive them to resolution, rather than instinctively flailing through several problems at the same time at a high level, hoping that one of your many actions will stick. Scientists have shown that the best creative problem-solving consists of these five-steps:

1. Learn as much as possible personally about the problem.
2. Engage a qualified and diverse team, staff, and advisors.
3. Document the ultimate goal, so people can work backward as well as forward.
4. Ramp up communication to bring in outliers and spark fresh thinking.
5. Step back for a while to let the creative juices flow before making a decision.

These are turbulent times, as well as time for great opportunities, for the entrepreneurs that are agile, innovative, and open to change. Don’t get stuck in the past, or let some early success lead you to competitive lethargy or crippling indecisiveness. Those are the diseases of too many big business executives. You didn’t decide to be an entrepreneur to be like them.

Marty Zwilling

8 Tactics To Make You A Fearless Business Innovator

Every business owner and entrepreneur I meet in my consulting rounds dreams of finding that “disruptive” innovation that will supercharge their business and move it into the ranks of business unicorns (billion-dollar valuations), such as SpaceX and Apple. They don’t realize that these are still rare, require a large risk, and may not be the best way to keep up with change in the market.

As a potential investor, I always think of the high rate of failure of disruptive technologies, due to the longer learning curve of customers, infrastructure change consistently required, and higher marketing costs. As an alternative, I usually recommend more incremental innovation, derived from recognized market changes, done on a regular basis, without the big-bang expectation.

In that context, I was pleased to see the supporting message in a recent book, “Fearless Innovation: Going Beyond the Buzzword,” by Alex Goryachev. Alex is a Silicon Valley veteran and Cisco executive, often referred to as the ‘innovation therapist,’ who details his knowledge of many real-world cases and specifics on how to keep up with change and win in the marketplace.

Here are his key recommendations, with my own insights added, on how you too can successfully keep up with change through regular and less risky incremental innovations, and stay ahead of your competitors in the business world today:

1. Embrace the fact that change waits for no one. As markets continue to change ever more rapidly through new technology and innovation, the global social, economic, and business environment will quickly evolve as well. If you don’t keep it top of mind today, then you are going to be left behind. Instill a sense of urgency in your business team.

   I can think of many companies that waited too long to react to change, including Polaroid and Blockbuster, and were never able to recover. Don’t be lulled into a false sense of security by an initial innovation that has served your company well so far.

2. Take responsibility for owning an informed strategy. Look at the big picture and then home in on the strategy that aligns best with your company and personal values and priorities. Before you act, shut up and listen to employees, customers, and futurists. Take accountability for execution by enabling success through resources, attention, and care.

3. Define realistic metrics to keep track of progress. If you can’t measure it, you can’t manage it. You need metrics to incentivize the right team behaviors. You as a leader must be transparent about how and why you are investing in one initiative over the other. Not every initiative will win, and you need to also know when to pack it in and move on.

4. Focus on pragmatic innovation rather than disruption. Technology is great, but high-tech major-step-forward solutions are not the answer to all our change challenges. The world moves primarily on small low-risk changes from market adjacencies that come from solving problems and executing measurable milestones with near-term growth potential.

5. Make innovation a team effort rather than a solo one. Get everyone involved, rather than count on a lonely inventor, or even a specialized group. Your challenge will be to break down silos, manage diverse and inclusive perspectives, and capitalize on cross-functional insights. Be sure to hire and cultivate new talent with the right mindset.

6. Capitalize on free communal initiatives around you. Keep your eyes and mind open to free sources of innovation in every ecosystem, including open-source software, university cooperative programs, and the many incubators and accelerators supported by volunteers and communities. You can provide the discipline and the resources for results.

7. Establish a governance process to support efforts. Does your business have a Chief Innovation Officer or equivalent function to coordinate activities, make sure resources are provided, and ensure execution and achievement of long-term goals? Innovation must be embedded in every function of your organization and measured at the highest levels.

8. Invest in communication skills and use all platforms. In addition to spreading the word internally, you need to create a dialogue externally with partners and customers. In return, active listening and two-way communication will maximize the value of your impact and results. Don’t forget the new social media platforms and industry forums.

You may think that innovation and disruption are interchangeable, but they are different concepts and should not be confused. Every company needs a change strategy to address required problems or get new funding, but don’t count on disruption to be that strategy. Instead, I suggest you focus your team on frequent and simple changes, rather than big dreams of saving the world.

Marty Zwilling

*** First published on Inc.com on 12/15/2022 ***

6 Key Motivators Lead To Negative Energy On The Team

As an entrepreneur, you should treat gossip among the members of your team as a reduction in productivity at best, and at worst, an indication of unhappy, un-empowered, or non-collaborative employees. As a leader, you should be asking yourself if you are the problem, and working hard to improve the situation before it gets out of hand, causing lost clients as well as lost productivity.

Occasionally I see articles, like this one from Scientific Research, that claim gossip in the workplace can be beneficial in getting unspoken information out in the open for leaders to see, or it allows people to release pent-up negative energy before it explodes. Good gossip, as opposed to the malicious kind, some argue, might promote camaraderie and accountability on the team.

I personally think that good gossip is an oxymoron, since most dictionary definitions agree that the essence of gossip is sharing personal details about others that are not confirmed as being true. In any case, it behooves every entrepreneur and business leader to keep their antennas up for an increase in gossip, and know how to address the problem without causing more.

I recently saw some good insights on this challenge in the classic book “The 15 Commitments of Conscious Leadership,” by Jim Dethmer, Diana Chapman, and Kaley Warner Klemp. They concur with me that gossiping is a key indicator of an unhealthy organizational culture, and one of the fastest ways to derail creativity. They summarized the following key motivators for gossiping:

1. Make others appear wrong. Many team members relate to others on the team from a one-up or one-down position: They see each person’s position as either less than or more than their own. Gossip is a way to engage in one-upmanship, relieving them from feeling inferior. It allows people to twist reality to make others wrong so they can be right.

2. Gain validation for a personal view. People’s egos live in a world where they are either right or wrong. Since they don’t want to be wrong, gossip allows them the opportunity to validate their righteous perspective. Gossip provides the vehicle to bounce off our thoughts with friends and associates to gain validation and support.

3. Control others not under their authority. By gossiping, team members feed their judgments to others, manipulating the information flow and attempting to control the beliefs and behaviors of others. This is often driven by fear of their real persuasive ability, or lack of confidence in the organizational hierarchy or decision making process.

4. Get more individual attention. Absent something meaningful to share with others, team members may choose to reveal a critical or private story about someone else to keep some attention on themselves. Unfortunately, spreading gossip or rumors is like buying attention; it’s temporary and has little foundation.

5. Divert attention from possible weakness. When someone feels vulnerable, gossip is a great way to shift potential negative attention to someone else. For example, team members may gossip about the personal lives of their boss or business leaders to highlight faults, making their own faults less significant.

6. Avoid face-to-face negotiation and conflict. A popular reason for gossiping in teams is a concern that direct opinions or preferences are going to upset someone. Thus they vent to people not directly related to the issue, such as friends and other team members, somehow hoping that will get the message across with having to confront anyone.

Gossip doesn’t work without a willing listener, so agreeing to listen is really as contributory as speaking it. Team members who refuse to listen will kill gossiping as effectively as no speakers. The authors agree with me in observing that candor and authentic expression of feelings and facts are more effective in communication and maintaining the health of the organization.

The only way to really clean up gossiping is to reveal both the gossiper and the listener to each other, to the person about whom they have been gossiping, and to clearly delineate the relevant business facts from the stories. People who refuse to change need to be removed from the team before they destroy it.

Every business needs creative energy and collaboration to survive in today’s competitive environment, and these are undermined wherever gossip is present. It only gets worse if you pretend you don’t hear it.

Marty Zwilling

5 Keys To Satisfaction When Starting A New Business

According to a classic Gallup survey, job satisfaction for employees has reached an all-time low. Only 13 percent of workers are fully engaged in their job. The sad part is that it seems to be getting worse, rather than better. One alternative is to become an entrepreneur. As a mentor to many aspiring entrepreneurs, I’m often asked what it takes to get satisfaction from this lifestyle.

I found some great help in outlining the elements of this process in the book, “Disruptors,” by Kunal Mehta. It’s a collection of stories from real-life young entrepreneurs, all of whom chose to break away from the comfort and security of unfulfilling corporate careers to be entrepreneurs. It outlines their perspectives, struggles, and heartbreaks, as well as their successes.

In fact, Mehta focuses on a special class of entrepreneurs that he calls disruptors. These are ones behind many of the modern game-changing companies, like Pinterest and Tesla. He notes that they all seem to exhibit a special extra focus on preparedness, duality (one foot in reality and the other foot out), and a keen self-awareness of what they have and what they want.

Yet I know from experience that being an entrepreneur in any fashion is not for everyone. It takes at the very least a special blend of confidence, passion, determination, leadership, and problem-solving abilities. Given these, Mehta outlines five specific steps to get started and stay ahead of the game, which I agree are essential and have paraphrased here:

1. Be open to new opportunities and options. Too many people flat-line in their careers and accept being unhappy because they think there are few other options available to them. It’s up to you to constantly look for options inside and outside your own network, and be willing to make the adjustments to capitalize on them. Be prepared to experiment.

2. Build the courage to “think different.” Fear is a dangerous emotion with which to guide your actions. Put it behind you by setting your own realistic metrics for success and happiness. Quit looking for critics to flood disbelief on your vision. If your intentions are genuine and your work ethic is strong, meaningful and lasting success is likely.

3. Expand your support group and test your limits. Find the men and women you wish to be more like, talk to them, study them, and learn from them. Surround yourself with people who are constantly striving to be better, and support each other. Erase the qualms about failing, and willingly accept failure if it comes, as the ultimate learning opportunity.

4. Focus your efforts on creating value, not wealth. The glamour of wealth will quickly tarnish if you don’t feel passionate about the work you are doing. Find a role where you can work seven days a week without it feeling like a chore. Learn new skills that will make you an expert in that domain, and both satisfaction and wealth will follow.

5. Take action now. Overcome complacency and re-test your limits to create impact in a more meaningful way. Set long-term goals, short-term goals, and micro-goals. Then write them down. By writing these goals, you add validity to each target and create a mental desire to see them fulfilled. Then accomplish one, sense the progress, and add another.

Thus it’s clear to me that your journey from corporate America to being an entrepreneur does not begin with just an innovative idea, or an annoying dissatisfaction. It has to start long before that, with a mindset event that drives a real change in behavior. That could be a burning need to fix a wrong, disdain of an existing system, or just the desire to be one’s own boss.

Regardless of the motivation, you should expect that the journey will be longer than you anticipate, and require immense courage. The rewards, as reported by everyone who has been there, will still be well worth it.

I do believe that every aspiring entrepreneur needs to look inward first, to understand their own drivers. So don’t be afraid to take a hard look in the mirror. Old habits die hard, and the longer you wait, the harder it will be to make the jump, and your odds of success go down. It’s a lot more fun to be a disruptor than to wish you were one.

Marty Zwilling

10 Practices To Avoid When Running Your First Startup

Unfortunately, many entrepreneurs seem to prefer to fail their way to the top, rather than do some research and learn from the successes and mistakes of others. It seems to be part of the “fail fast, fail often” mantra often heard in Silicon Valley. As an advisor to many startups, I’m convinced it’s an expensive and painful approach, but I do see it used all too often.

In general I try to focus on the positives and tell entrepreneurs what works, but sometimes it’s important to reiterate the common things that simply don’t work. I remember a classic book by MJ Gottlieb, “How To Ruin A Business,” that highlights failures. He humbly outlines fifty-five of his own less-than-stellar business anecdotes over a career in business for all to see and avoid.

Here is my selection of the top ten things to avoid from his list that I have seen lead to failure most often. I’m sure each of you could add one or two more from your own experience, and I’m desperately hoping that together we can convince a few aspiring entrepreneurs to avoid at least one practice that lead to losses and suffering:

1. Spend money you don’t yet have in the bank. In the rush of a startup, it’s tempting to start spending the money you expect any day from a rich uncle or a major new customer. But things do go wrong, and you will be left holding the bag. It’s not only embarrassing, but one of the quickest ways to end your entrepreneurial career.

2. Open your mouth while in a negative emotional state. Many entrepreneurs have destroyed a strategic alliance, an investor relationship, or lost a key customer by jumping in with harsh words after a bad day at home or at the office. If you don’t have anything nice to say, keep quiet and wait for another day. You may be dead wrong.

3. Over-promise and under-deliver. Always manage expectations, and always under-promise and over-deliver. As a bleeding-edge startup, you can be assured of product quality problems, missing business processes, and customer support issues. Use the rule of “plan early, quote late, and ship early,” to be a hero rather than a zero.

4. Create a market you can’t supply and support. If your product is really new and disruptive, make sure you have supply to meet the demand at rollout, and a patent to prevent others from jumping in quickly. Too many entrepreneurs have had their new positions in the marketplace taken away by competitors and others with deep pockets.

5. Count on someone who offers to work for free. As a rule of thumb, expect to get exactly what you paid for. People who work for free will expect to get paid soon in some way, or they may take it out in trade, to the detriment of your business. Student interns are an exception, since their primary objective should be learning rather than money.

6. Underestimate the importance of due diligence. No matter how good a supplier or investor story sounds, it is not smart to skip the reference and credit checks. Visits in person are always recommended to check remote office and production facilities before any money is paid up front on a contract.

7. Grow too quickly for your finances and staffing. Growing quickly, without a plan on how to implement that growth can be a disaster. Learn how to reject a big order if you are not prepared to handle it. It takes a huge investment to build large orders, and large customers are the slowest to pay. In the trade, this is called “death by success.”

8. Be confused between working hard and working smart. In business (as in life), you should never reward yourself or your team on the quantity of time spent, rather than results achieved. Quality works at a thousand times the pace of quantity. Prioritize your tasks, take advantage of technology, and constantly optimize your processes.

9. Be afraid to ask for help, advice, or even money. Entrepreneurs often let pride and ego stand in the way of leveling with trusted friends and advisors. The advice you don’t get can’t save your company. I always recommend that a startup create an advisory board of two or three outside experts, who have connections to even more resources.

10. Rely on a verbal agreement in business. Get every agreement on paper early and always, put a copy in a safe place, and have the agreements updated when people and environments change. People come and go in every role, and there is no such thing as institutional memory. People only remember the agreements which benefit them.

If all these failures seem intuitively obvious to you, why do I see them repeated over and over again by new entrepreneurs? Perhaps it is because entrepreneurs tend to let their egos cloud their judgment, they don’t like to be told what to do, or because there is no single blueprint for business success.

The good news is that, I continue to see articles with evidence that entrepreneurs are happier and healthier than their employees, or even most other professions, regardless of how much money they make. even with the pitfalls outlined here. I suspect that most of these have failed their way to this top satisfaction.

Marty Zwilling

How To Keep Your Mature Company Young And Competitive

In today’s fast moving world of business startups, learning trumps knowing every time. What established businesses know through experience keeps them from looking for the new and innovative ways to do what they do better, cheaper, and faster. I’m convinced that’s why most mature companies are slowing down or buying their innovation through acquisition, rather than building it.

In her classic book, “Rookie Smarts,” Liz Wiseman, one of the top thought leaders in business, amplifies this point as it relates to hiring and cultivating the curious, flexible, youthful mindset in keeping a mature company young and competitive, as well as keeping experienced employees more productive.

She outlines four distinct ways that business people doing something for the first time, whether they be entrepreneurs, or people in a new role in a larger company, tend to think differently than experienced veterans. With my focus on startups, I can translate very easily how her points lead to more innovation even in the entrepreneurial environment:

1. Maintain an unencumbered mind. True entrepreneurs, like backpackers, are ready to explore new terrain, more open to new possibilities, and don’t get stuck in yesterday’s practices. They tend to ask the fundamental questions, see new patterns, and notice the mistakes of others. They are not afraid to act boldly, and tend to recover quickly.

2. Seek out experts and return with ideas and resources. Startup founders need to be more like hunter-gatherers, seeking out experts and trying new ideas to address their challenges. They are not entrenched in their domain, and don’t look for data that confirms what they already know. They don’t hesitate to disseminate the knowledge to their team.

3. Take small calculated steps, moving fast and seeking feedback. Experienced business professionals tend to take big steps, move at a comfortable pace, and are not on the lookout for changing conditions. Entrepreneurs have to be like firewalkers, take a risk, move quickly one step at a time, searching for milestones on the way to success.

4. Improvise and work tirelessly while pushing boundaries. Great entrepreneurs, like pioneers, work hard, keep things simple, and focus on core needs. They don’t have a comfort zone or protocol to fall back on. They assume that new tools and structures will have to be built along the way. Progress on the learning curve is their satisfaction.

But even as an entrepreneur, you can fall back too quickly on prior experience, or settle into habits that are too comfortable. Here are some things we all need to do change perspectives and learn to learn all over again from time to time:

• Transport yourself in time and place to your first professional role. Remember how you felt then, what you did, and how you approached work. Use this insight to reset your own thinking, and to provide great leadership guidance to other members of your team.

• Multiply your expertise with additional experts. Avoid the temptation to jump in first, and consult other experts to bring new insights into the challenge at hand. Don’t give up until you have found new patterns to an area you thought you knew.

• Reverse the learning role with new team members. By asking a junior colleague to mentor you, you will more likely hear new approaches or technologies and get new insights on your customer base or business challenges.

• Expand your professional network to new groups. Actively look for people with views contrary to your own. As you change the stream of information and consider alternative views, your thinking will expand.

• Take a step back and remap your terrain. Try to visualize your domain the way a newcomer would see it, without the filters you have already built in your mind. Map out the current players, rules of the game, cultural changes, and constituent alignments.

• Swap jobs with a colleague for a day. Use the exchange to gain new business and customer insights, and to formulate the naïve questions that a newcomer might ask. The swap will be an exciting learning experience for both of you.

True entrepreneurs thrive on the experience of learning, maybe more than the experience of success. That’s why the best entrepreneurs I know can hardly wait for a chance to exit their current startup as it stabilizes, and start again down a less familiar but new learning path. Once you stop learning, you stop having fun, and you stop succeeding.

Marty Zwilling

7 Steps To Highly Productive Business Relationships

In business, you need positive relationships with others to do your job, further your career, and manage your business. Being a “lone ranger” won’t get you there, no matter how hard you work. In my experience as a mentor and advisor, I find that many of you expect these relationships will just happen, without any overt effort on your part. Nothing could be further from the truth.

For example, as an entrepreneur, you need investors, so you need to start networking early, because they won’t find you. In your career, you need relationships with peers and managers who will be your advocates for you in that next opportunity you are seeking. How much of your time and focus do you spend today on building and nurturing these relationships that count?

I’m not talking here about time spent promoting yourself to others, but time spent listening and learning, and making these people feel appreciated and valuable. In my own experience networking as a startup investor and business executive, I always gave extra consideration to someone who didn’t immediately pitch me about their great idea or background.

Here are my key mentoring recommendations for how to approach new and existing relationships to make them more productive and valuable to your own business aspirations:

1. Allocate time to find and develop outside relationships. Actively seek out and attend key outside business conferences in order to meet and get to know people who can help you, and you can help in return. This can vary depending on your business interests, but may include a charity event or retreat, and can be a common hobby or community role.

   I have found that finding time for new and old relationships is a challenge for many of us, especially introverts. I suspect you may find the problem to be allowing too many interruptions, or simply avoidance of those things that are outside your comfort zone.

2. Ask questions to find common goals and interests. All productive business relationships must be based on some shared goals and common interests, potentially in different industries. These may include shared business financial objectives, technology advancements, or shared career goals. Don’t forget entertainment or family connections.

   Perhaps the challenge here is more clearly defining and prioritizing your own goals for your career or business. Per the old saying, it’s hard to know if you are on the right path, if you don’t know where you are going. Relationships can be the key to finding that path.

3. Always be positive and agreeable in early relationships. It never pays to approach new relationships with your favorite complaint, or your view of all the things wrong the world or your organization. If you are looking for an advocate, an investor, or positive feedback, it won’t work to come across as opinionated, argumentative, or disagreeable.

4. Find other’s success rather than talking about yourself. This may seem obvious, but in my experience it rarely happens in practice. Everyone has something to admire, and it’s up to you to find it. These create positive emotions, which will be always be attributed to you. In addition, you will learn when and how best to ask for the help you need.

5. Show respect and concern to relationships in any stage. Courtesy and respect earn the same in return to you. Showing concern will enable a connection at an emotional level, as well as the intellectual level. You need both, to get the maximum value from the relationship in the long term. Respect also leads to the trust you need for real support.

6. Express appreciation for existing and past relationships. This sends a message that this relationship will be valued as well. If you are openly critical of other relationships, people will be reluctant to help you or offer guidance, for fear that their efforts will not be appreciated, or will be actively discounted to others. What goes around comes around.

7. Don’t try to change anyone to meet your expectations. Everyone has biases and comes from a different background. By expressing sensitivity to their challenges, their self-esteem will be enhanced, and they will more likely accept you and appreciate your value and perspective. Only then can this be a mutually beneficial relationship.

If you are struggling and feeling all alone in your business, I highly recommend that you follow these key ways to find and nurture some new business relationships. You will find your efforts are returned many times over, and your feelings of isolation and stress are replaced with connections and satisfaction. You might even find some friendships that will last you the rest of your life.

Marty Zwilling

*** First published on Inc.com on 12/9/2022 ***

7 Business Culture Principles To Position For Success

As an entrepreneur, it’s never too early to set the culture you need for a thriving business, as well as thriving employees, customers, partners, and vendors. In fact, in my experience, cultures are very hard to change, so if you don’t get it right the first time, the road ahead will forever be difficult. “The Art of War” culture as an analogy for business doesn’t always work anymore.

I’m seeing more and more business success stories like the one in the classic book “Uncontainable: How Passion, Commitment, and Conscious Capitalism Built a Business Where Everyone Thrives” by Kip Tindell. He is the Founder of the very successful Container Store, while still making Fortune magazine’s 100 Best Companies to Work For list for seventeen consecutive years.

He offers a set of seven principles and values for his ultimate win-win philosophy and harmonic balance among all stakeholders, as a roadmap for any company to develop a profitable, sustainable, and fun way of doing business. I recommend that every aspiring entrepreneur and serious business professional take each one of these to heart from day-one of their startup:

1. Talent is the whole ball game. When you surround yourself with hugely talented, passionate, dedicated, and genuinely kind people, you will succeed in whatever you do. Tindell’s mantra is that one great person is equal to three good people. Start with only the very best people, demand excellence, and train them to stay ahead of the pack.

2. Craft mutually beneficial relationships. This requires spending the extra time needed to really get to know your employees, vendors, and customers, and letting them get to know you. Know the issues they face, and search for ways to help them, make them happier, more productive, and more profitable. The result is more win-win than win-lose.

3. Reframe selling as an activity that improves customer’s lives. If you get to know your customers well enough, you can provide solutions that make selling and service the same thing. It’s a win-win deal that keeps customers coming back, helps your company, and incents customers to bring in their friends through word-of-mouth and social media.

4. Great communication is the best leadership. How can people trust their leaders if they’re not being fully informed about what’s at stake? The objective is to communicate everything to every person. It starts with daily ongoing communication between team members, and extends to the top with executive updates and informal listening sessions.

5. Simultaneously deliver the best selection, service, and price. Stick with what you know and do it better than anyone else. Keep is simple, and think solution rather than item-based, for the proper perspective. The best relationships with vendors give you price and selection leverage, and the best service relationships bring customers back.

6. Team members must act intuitively, based on training and motivation. Intuition is nothing more than the outcome of previous training and experience. More training on your solutions and customer needs means better intuition and anticipation of how to help customers. Happy and motivated employees won’t be afraid to use their intuition.

7. Build and maintain an air of excitement in your company. Faithfully following the first six principles will build that sense of excitement where everyone wants to be there and feels the sense of energy, customers and employees alike. You can’t force that feeling of warmth and caring, it has to be authentic and come from the hearts of talented people.

The great management guru Peter Drucker once said, “Culture eats strategy for breakfast.” Today company culture is more important than ever in driving strategy and value, not the other way around. A great culture in an entire business infrastructure of executives, employees, vendors, and customers working together to achieve a common goal of everyone thriving.

No leader can “create culture,” but they must create the environment where the desired culture can emerge and flourish. Leaders do this by driving values, values drive behavior, behavior drives culture, and culture drives performance. High performance makes new leaders. This is the self-reinforcing circle of excellence every business needs to succeed. Are you driving the right values in your business?

Marty Zwilling

5 Personal Motivation Mindsets Of Born Entrepreneurs

As a startup advisor, I see many aspiring entrepreneurs whose primary motivation seems to be to work part time, or get rich quick, or avoid anyone else telling them what to do. Let me assure you, from personal experience, and from helping many successful as well as struggling entrepreneurs, that starting a business is hard work, and doesn’t come with any of the benefits mentioned.

Yet, for those with more realistic expectations and the right motivation, the entrepreneur lifestyle can be the dream life you envisioned. Based on a classic study by the Wharton School of Business, in a survey of 11,000 MBA graduates over many years, those running their own businesses ranked themselves happier than all other professions, regardless of how much money they made.

So what are the right motivations, and how do you candidly assess your own? Indeed, there are many self-assessment tools available online, but I was more impressed with insights provided in a classic book “What Motivates Me: Put Your Passions to Work,” by Adrian Gostick and Chester Elton. These guys are workplace culture experts, and claim to have inputs from 850,000 people.

The authors offer portraits of some key individual personality types, such as achiever and thinker, and tie the relevant motivators for business success and happiness to these types. I have amplified these here from my own experiences to focus on the entrepreneurial subset of businesses:

1. You love doing your own thing and being in control of your destiny. As an achiever, you thrive on tight deadlines, ambitious goals, and leadership challenges. Even in chaotic startup environments, you normally finish required tasks on time and to high standards. Team members see you as high-energy, determined, and action-oriented.

2. You are driven by a cause or purpose to change the world. As a builder of new things and people development, you are not afraid to speak out on significant issues and world challenges. You cultivate loyal friendships, people growth, and thrive in strong team environments. You see success as making a difference in the world around you.

3. You are tuned into others’ emotions and want to help people. As a caregiver, you understand the problems of others, and are determined to provide solutions which will make their life better. You love to have fun at work, and believe that balancing work and family is critical. People see you as great for demanding customers and team bonding.

4. You are driven to compete and win in the marketplace. Being reward-driven, you are driven to win money, customers, applause, and the admiration of others. This determined nature can help you accomplish great things in new organizations. You are seen as a doer, but one who needs recognition and incentives to produce your best work.

5. You simply know there is a better way or solution to the problem. As a thinker, you love to learn, use your imagination, and enjoy the feel of adrenaline rush now and then. You get frustrated with bureaucracy, and won’t accept that things have always been done a certain way. Team members see you as the lifeblood of innovation in the organization.

In a critical extension to this thinking, the authors and I would outline another dimension to these personality types and motivators, by defining five motivation grade levels that also impact entrepreneurial motives, actions, and satisfaction:

• Level A. Primary motivation is to make a difference in the world, with a secondary motivation of earning a living. These people define their roles in terms of their customers’ or employees’ or coworkers’ needs, not their own.

• Level B. Primary motivator becomes making consistent return for stockholders. These are still good people with an intent to provide great products and services, but making a difference takes a back seat. This often happens when a Level A company goes public.

• Level C. At this level, it’s not just money but the love of money that becomes the primary motivator. Entrepreneurs at this level will seek the minimum cost and quality to be more competitive. Advertising, pricing and support practices may show questionable integrity.

• Level D. At this level, greed takes over as the primary motivator. Unethical acts are tolerated, and customers may be treated unfairly or harmed. We all know a corporate giant or two at this level who went out of business in the financial crisis a few years back.

• Level F. At the lowest level are those involved in Internet scams, Ponzi schemes, or organized crime. Entrepreneurs motivated to work at this level harm not only themselves, their employees, and customers, but also society in general.

In the long-term, entrepreneurs in Level A are the happiest, successful, and most productive. Certainly we see some Level C and Level D entrepreneurs who appear to be prospering, but appearances can be deceiving and fleeting. Make sure your motivation to be an entrepreneur is more than a dream, and will stand the test of time for you and all the people around you.

Marty Zwilling

10 Quotes You Should Never Use Around A Business Plan

Many new entrepreneurs are so excited by their latest idea that they can’t resist contacting every investor they know, assuming the investor will be equally excited and want to contribute immediately. Others will work hard on a business plan, and then mail it indiscriminately to every potential investor they can find on the Internet. Both of these approaches are a waste of your time and theirs.

The best professional investors receive dozens of proposals a day, so they are conditioned to look for quantitative data, rather than passion, for credibility and potential. They also look for entrepreneurs they know from past experience and warm introductions, or for evidence that you have previously built a successful startup, and sold your last one for maybe $800 million.

If you are not in that rare category of known and proven entrepreneurs, you should avoid the following list of my top ten turnoffs that I have personally experienced as an angel investor. These will put your proposal in the circular file, and even future good opportunities from you may go to the bottom of my list:

1. “Give me a call to hear about an opportunity that can’t fail.” Teasing or spamming an investor is not the way to his pocketbook. Also suggesting that they check out your website or video and tell you what they think will not likely peak their curiosity. Every pitch should start with a concise statement of the problem and your innovative solution.

2. “Attached is a copy of my full business plan for your review.” Too much detail at first contact is just as much of a turnoff as no information. The first page of the business plan better be an executive summary which gives the investor a taste of the financials, as well as opportunity, competition, and key executives.

3. “I don’t have a business plan, but the technology is disruptive.” Investors are buying part of the business, not the product or service. They only want a quick overview of the product, not detailed features and patent secrets. If you haven’t yet finalized the business model, cost projections, and customer segments, you aren’t ready for investors.

4. “Excuse the typos and cleanup -- I’ve been too busy to finalize.” Don’t send investors documents and notes that would be rejected by any high-school teacher. These will quickly convince investors that you will be equally unprofessional in your attention to detail in running the business. Investors invest in the jockey, more than the horse.

5. “I’ve used a few well-known acronyms and abbreviations for brevity.” Technical jargon may be natural for you, but investors read this as arrogance or laziness on your part, if not an intentional effort to intimidate the reader and obfuscate facts. Every acronym should at least be spelled out and defined at its first appearance in any content.

6. “I think you will find the business plan answers all your questions.” Business plans the size of a small book are a big turnoff to investors, and will only serve to make your business seem more complex and more risky. A tightly-worded plan of approximately 20 pages is effective in painting the overall picture, including all the key financial elements.

7. “An additional level of detail is included in the various appendices.” It’s always impressive to have stand-alone supporting documents for product specifications, sales plan details, and backup financial reports. But including all of these in the base plan to make it look more impressive will probably backfire.

8. “I really can’t find any worthy competitors in this space.” Avoid degrading or demeaning your competitors, unless you can quote third-party data. Investors read this approach as naïve, even bordering on unethical. Talking about competitors should be your opportunity to make positive statements about the advantages of your own product.

9. “Let me show you a demo rather than a business plan.” Demos never go according to plan, and ones that work go on far too long. Remember that investors can’t see the business from a demo or prototype, and they won’t appreciate all the love and work you have put into building the product. The best demos to investors are 30 seconds or less.

10. “Look how many social media ‘likes’ my site has generated.” We all know how to get friends and peers to pump up our story online, but investors want to see feedback from paying customers. Real contracts, testimonials, and even statements of intent are much more effective, if not real revenue and growth statistics.

As a new entrepreneur approaching an investor, you only get one chance for a great first impression. Passion is necessary but not sufficient to get their attention. My advice is to pick your opportunities carefully, prepare thoroughly, and focus more on the financial side of your story. It’s a lot easier to turn off an investor than it will be to get them turned back on later.

Marty Zwilling

6 Growth Challenges That Every Good Startup Will Face

Every entrepreneur thinks he can relax a bit after his business model is proven, funding is in place, and revenues are scaling as projected up that hockey-stick curve. Unfortunately, the market is changing so fast these days that any upward climb can level off quickly, as the core business growth begins to stall. This S-Curve, with no correction, can quickly lead to disaster.

I’m not talking here about a small pivot. I’m talking about the kind of change that moved Apple from personal computers to music distribution to consumer electronics, and Amazon from books to e-Commerce to cloud computing services. On the other end of the spectrum are companies that fell behind the curve and may never recover, including MySpace for social networking, Yahoo with online ads, and Groupon with discounts for group purchasing.

To sustain long-term growth, every company needs to build a repeatable process for innovation and finding new opportunities before their core business growth disappears. The reasons for this requirement, and some practical guidelines for how to prepare, are outlined in the classic book “The Curve Ahead: Discovering the Path to Unlimited Growth,” by Dave Power.

Power has been guiding growth companies for 25 years, and now teaches innovation at the Harvard Extension School. He has helped many companies with this problem, and as an advisor to startups, I see the same common themes leading to growth slowdowns. These are appearing earlier and earlier in emerging companies, as well as in mid-sized and mature companies:

1. Your original market becomes saturated. Initially, all companies sell to customers who are the easiest to reach and most excited about the new product. As a company begins to penetrate its market, it begins to work hard and harder, often in new geographies, to find more prospects. Marketing costs and time go up, and the growth curve flattens.

2. Competitors see the same opportunity. New players jump in, and existing players broaden their offerings to cover the same territory. They steal a share of your market, slow down customer buying decisions, making it harder to close new business, and put the brakes quickly on your exponential growth.

3. Prices begin to decline quickly. The first customers are early adopters who are the least price-sensitive. Unfortunately, the mainstream customers who can really drive revenue care more about price. Thus even if unit sales keep increasing, revenues can lag due to the need for lower prices as the mainstream market takes over.

4. Customer acquisition gets harder and more expensive. Scrappy guerilla marketing based on personal contacts and word-of-mouth campaigns gives way to more expensive customer acquisition using advertising, trade shows, and a marketing agency. You suddenly need to enhance your in-house social media efforts with a public relations firm.

5. An expanding customer base demands better support. Serving a growing customer base – with a great customer experience – requires more time and dedicated resources. In the early days, your product engineers could handle customer support. Over time, however, a continuous growth company needs a trained and dedicated support team.

6. Management overhead and skills required go up. In the beginning, your entire team could meet in your office. As the company grows, functional leaders need to build and manage larger teams, recruit and develop talent, and manage remote offices. Managing the scale and complexity requires more formal processes, which slow the momentum.

Your first objective should be to stretch the S-Curve, which can buy you a few months or a few years. Among the most common ways to stretch the curve include deeper penetration of current markets, expanding into new geographies, new market segments, optimizing pricing and packaging, and driving consolidation through acquisition of competitors.

Ultimately you need to find the next S-Curve, and then the next, and build the process into your strategy, for unlimited growth. This means you need to find new sources of revenue growth to offset a slowdown in the core business. It means finding a large underserved market and addressing this market with a product or service innovation, often with a different business model.

Successful entrepreneurs and successful companies never stop re-inventing themselves. The alternative of not anticipating the curves, and not building the navigation systems into your core engine, is likely to be a long and painful fall off a high cliff. Do you have a plan in place yet?

Marty Zwilling

6 Mismatches In The Workplace Lead to People Burnout

One of the dysfunctions I often see in my coaching and mentoring work with small businesses is team member burnout. The impact is low employee engagement, low productivity, and ultimately business failure or lack of growth. Most people see this as a management failure, but I believe that you as a team member have an equal responsibility in recognizing the problem and fixing it.

It is no secret that the recent pandemic has exacerbated this problem as companies lost more and more of their employees due to illness, economic contraction, and voluntary resignations. The ones who are still working have learned that they can work remotely, and they are searching for more flexibility and a better work-life balance to prevent the burnout they experienced earlier.

I was recently impressed with the detailed analysis and recommendations made on this subject in a new book, “The Burnout Challenge,” by Christina Maslach and Michael Leiter. These authors bring their in-depth scientific background, as well as real-world consulting experience on the subject of burnout. I will summarize their conclusions here, with my own business insights added:

1. Job requirements are judged to be excessive. Burnout occurs for many when your job demands are too many, the hours are too long, and the resources to handle them are too few. To survive, you must focus on recovery and resiliency, strive to achieve a balance between resources and demands, and set clear boundaries between work and non-work.

   This situation is only exacerbated by today’s remote work from home, where your work problems are unseen by others, and you have to manage the distractions of normal home activities, including children and pets. The stress alone from these can be debilitating.

2. Workers feel they have little control over work. This occurs when an organization imposes narrow constraints on how work is to be done or allows no room for judgment or innovation. This can be turned around by earning the trust to be more participative and demonstrating the ongoing productivity required to be granted autonomy and flexibility.

   I am convinced that a primary reason for “The Great Resignation” that many companies are experiencing today is that workers are realizing they have less and less control over their work. A recent survey shows that most value real flexibility over salary and benefits.

3. Rewards are out of balance with effort and results. Money always matters, but appreciation and social recognition are important and meaningful rewards for all employees. Maintaining a culture of appreciation requires your explicit public recognition of contributions, as well as commensurate and fair monetary and non-monetary rewards.

   Also, every study I have seen shows that the right rewards are the key to a motivated and engaged team. Don’t be afraid to ask your team for motivation ideas and strategies. You will likely be amazed at the variety, simplicity, and low business cost of their suggestions.

4. Sense of community and relationships is missing. The quality of the relationships among employees on the job constitutes the community bedrock needed to provide social support and eliminate burnout. You can improve your office culture by nurturing positive relationships with people, actively listening to feedback, and coaching peers.

   Another key to community is adopting a common higher purpose, such as a social or environmental cause, rather than financial gain alone. For example, Patagonia donates one percent of their sales to environmental charities, and has a high sense of community.

5. Organization acts without fairness and respect. At work, fairness is perceived as the extent to which decisions are just and equitable. In turn, people treat workplaces fairly when they respect company policies and procedures. You must lead a combined effort, and a willingness to listen and accept change, to achieve an improvement in fairness.

6. Company values do not match personal values. Values are the motivating connection between you and the job, and they go far beyond the utilitarian exchange of time for money or advancement. These can be a deal-killer, and I urge you look hard at the values inherent in a business or role before you join. Always live and work YOUR values.

If you currently see the signs of burnout in your team and your organization, I strongly urge you to evaluate the causes and recommendations summarized here and communicate them to owners and executives, before the costs and risks are beyond recovery for your organization. Your career and your job satisfaction are at stake, as well as the long-term health of your business.

Marty Zwilling

*** First published on Inc.com on 12/2/2022 ***

8 Keys To Building And Nurturing Trusted Connections

Based on my years of experience in both startups and large companies, trusted relationships are more the key to success than a great business model, how smart you are, or how much money you have. Aspiring entrepreneurs who struggle in a corporate environment often can’t wait to start their own company, only to find that relationships are even more critical and volatile there.

Many pundits will point to great entrepreneurs, including Steve Jobs at Apple, and Larry Ellison at Oracle, as examples of opinionated and egotistical leaders who succeeded without consideration for relationships. Yet insiders will tell you that both studied and valued the people interactions of prior leaders, and built very loyal relationships with many people who were key to their success.

The message here is not to use the public personas of leaders and entrepreneurs as the model for building and maintaining your business relationships. I’m convinced that the following personal strategies are required and practiced by every successful business leader, regardless of Silicon Valley myths to the contrary:

1. Lead with business and technical acumen for people who count. As an angel investor, I’ve seen aspiring entrepreneurs who seem to be convinced that bravado and passion are a good substitute for real information and a plan. You only get once chance for a great first impression, so don’t forget that content wins in relationships over style.

2. Building the right relationships requires proactive efforts. Don’t wait for the right people in business to find you – developers, investors, partners, or key customers. Part of the challenge in every business is to first recognize who can help you, and secondly take the initiative to build a productive relationship with that person or team.

3. Avoid naysayers and downers. Smart business people learn to quickly recognize negative personality types, and avoid them at all costs. Innovative businesses are tough and unpredictable, so relationships with procrastinators, people handy with excuses and all the reasons something can’t be done, are not helpful and will drag you down as well.

4. Maintain competitor relationships and seek alternate views. Good entrepreneurs recognize that strong competitors are smart people as well, and it pays to learn from competitors. Some of the best business partnerships come from “coopetition,” or finding ways to build win-win relationships rather than win-lose transactions with competitors.

5. Don’t be afraid to ask for help from people who are ahead of you. These include other business leaders, mentors, visionaries, and influencers. Bill Gates still relishes his relationship and advice from Warren Buffett. Maintaining these relationships will require you to push your limits, think outside the box, and carry your own weight with them.

6. Incent others to contribute to your success. This can be as simple as giving back as much time and emotional effort as you absorb from others, or it can be offering real business payback or equity for contributions. Smart business people understand their own agenda, and they figure out the agenda of others, to build win-win relationships.

7. Don’t back away from conflicts that can be constructive. Some conflict is inevitable. Strong leaders learn how to manage conflict to make it productive, bring out alternate views, and strengthen relationships. If you surround yourself with “yes” people, you may feel good for a while, but the unmentioned problems no one surfaces will hurt later.

8. Actively and positively end relationships that are not productive. We all have limited bandwidth, and it’s not possible to maintain relationships with everyone. Sometimes it’s better to move on, without burning bridges for the future. Smart entrepreneurs recognize when relationships have been outgrown, or need to be limited do to conflict of interest.

Today’s business world more than ever is a networked economy, requiring collaboration, and is most productive with trusted relationships, rather than a reliance only on legal contracts. Building relationships is not rocket science, and can be learned by anyone. It is the common ground between corporate professionals and entrepreneurs. Start practicing it today wherever you are.

Marty Zwilling

7 Stages In The Evolution Of A Startup To A Business

As a business advisor, I have too often seen technical entrepreneurs get a product or service off the ground with ease, but then struggle mightily when their business reaches a couple of million in annual sales, or the employee count grows beyond a handful. It’s at this stage that the job changes from creative and tactical to managerial and strategic. Many don’t survive the change.

In fact, I believe the majority of true entrepreneurs are not interested in this new role, and jump ship quickly by hiring an experienced CEO or merging with another company, to start their next entrepreneurial effort. For example, entrepreneur Sir Richard Branson has started or grown over 400 companies, from record labels to space travel, so for him the joy is clearly in the startup.

Bill Gates, on the other hand, spent most of his career building Microsoft to a multi-billion dollar company, so he made the transition from startup to growth company. Both he and Branson are billionaires, so there is no one right way for entrepreneurs to succeed. Management of a growing company is a learnable skill, and in my view it starts with a focus on the following key principles:

1. Management is getting results through people and processes. That means your primary responsibly changes from building a solution, to building processes and directing other people. Effective communication is the key, both written and verbal, since the plan can’t exist just in your head. Everyone needs to know what they are responsible for.

2. Strategic planning takes priority over tactical planning. True entrepreneurs love the tactical and problem solving challenges. Good managers are more interested in anticipating and preventing problems. That means making sure the right people are hired, trained, and in the right place at the right time. Spend more time on the future than today.

3. Focus on volume growth and repeatability. With a startup, everything is an experiment. Now the experiments are over, and high productivity is the objective. Creativity and innovation are applied to increasing output and lowering costs rather than solution design and building a viable business model.

4. Implement metrics and set objectives for every organization. You can’t manage what you don’t measure. Processes and organizations that have no objectives will produce less and less over time as they attempt to remove risk and potential problems. Every process needs a feedback mechanism to ensure continuous improvement.

5. Practice leadership by example beyond your business entity. This requires spending visible influencer time on external initiatives and building relationships in your industry and your community. This is also the time for business development focus, related social causes, and exploring common ground (coopetition initiatives) with competitors.

6. Spend real time on people development and succession planning. Long-term success requires planning for leader development in every organization, rotation of high-potential employees through key roles, and support for outside executive education programs. Growing the company means growing people through mentoring and training.

7. Balance your own life for the long haul. The startup process is a sprint, and entrepreneurs tend to focus on it like there is an end in sight, forgoing personal relationships, healthy time off, and planning for retirement. Good executives and managers maintain a more balanced perspective, and plan for vacations and family.

Moving from startup mode to a sustainable business requires an overt effort on the part of an entrepreneur – it doesn’t happen automatically. The alternative is to lose the business or get pushed out by investors or Board of Directors, after a painful crisis or business growth failure.

Great entrepreneurs actually have much in common with great managers, including a focus on results and a focus on execution. In addition the best of both groups maintain a focus on customers, love to learn new things, and are always thinking. Anyone who can put all these attributes to work can survive and prosper in any environment. Just decide where you want to fit, and go for it.

Marty Zwilling

8 Entrepreneur Mistakes That Turn Off Real Investors

After many years of working with angel investors seriously trying to find new ventures worthy of their hard-earned money, I find their frustration often exceeds that of entrepreneurs sincerely looking for financial help. That’s a lose-lose situation, so I’ve given a good bit of thought to how every entrepreneur can improve their odds, and keep investors less frustrated at the same time.

My first suggestion is that entrepreneurs need to forget the old myth that all they need to do is sketch an idea on a napkin, and investors will line up to invest. That approach may work for an entrepreneur who just sold a successful business for a huge profit, but it doesn’t work for the rest of us who are not proven successes yet, or don’t even have a business yet.

Getting investors to trust you with their money is always a challenge, and it’s even more difficult in the early stages, where you don’t have a significant revenue stream, a few customers, or maybe even a product yet. At these stages, it’s all about you, and your ability to communicate and execute effectively. Here is my list of red flags that cause many investors to look elsewhere:

1. No well-defined need or viable customer set. The most investable ventures stem from painful needs by customers who have money to spend. “Nice-to have” and “easier-to-use” products, or social ventures needing government support, are not likely to provide a financial return to investors. Investors expect a good value proposition in every pitch.

2. Non-credible funding request or unreasonable valuation. Investors are looking to buy a chunk of the business, not the product. They need to know how much money you need, and what portion of the current business you are willing to offer for the investment. Future unproven projections don’t set today’s valuation. Ask only for the money you can justify.

3. Naïve expectations on funding terms and process. Experienced entrepreneurs understand investor expectations of Board representation, preferred stock, and payments based on interim milestones. Founder insistence on non-dilute clauses, arms-length relationships, and quick closure without due diligence will short-circuit active interest.

4. Dysfunctional or non-functional team members. Investors invest in people, often more so than in the product. Therefore evidence of team members who don’t fit, family members who don’t have a role, or evidence of conflicting priorities will quickly derail investor interest. All internal teams need to have relevant skills and experience.

5. Undefined business model or very low gross margins. Potential return on investment cannot be calculated without a clear understanding and evidence of actual costs, revenue flows, and margins. Marketing programs and distribution channels are required for even the best solutions, with an appropriate and viable rollout and growth strategy.

6. Solution development undefined or incomplete. Investors are most interested in providing money for scaling of a proven solution. They are not interested in research and development, or funding at the idea stage. For seed stage funding, entrepreneurs should be looking to friends and family, crowd funding, and relevant institutions.

7. Lack of intellectual property. Having a patent, trademarks, or other “barriers to entry” are always a critical advantage in attracting funding, since investors need to see real commitment to beating competitors. Being first to market is not a strong competitive argument for startups, since larger existing players can easily overrun this position.

8. Surprises during due diligence. Smart entrepreneurs pre-disclose any possible due diligence issues, with full and open explanations and no excuses. Due diligence also normally involves onsite visits and employee discussions, so the entire team needs to be fully aware of expectations. Investors pass if they find conflicted team members.

Certainly there are many other red flags that will discourage investors, but every entrepreneur will find that it pays big dividends to be proactive on the key items outlined here. If your startup is dependent on investor funding, you should remember that your first competitors are peer startups who are also fighting for scarce resources.

Your job is to stay a step ahead of them in professionalism, communication, and preparation. You make your own luck in this game.

Marty Zwilling

7 Keys To Heightening Your Business Team Engagement

I was shocked to read an old Gallup study that indicates only 13 percent of employees worldwide are actively engaged at work, and more recent data shows only a small change in the right direction. In my own experience as a startup advisor and mentor, I find that entrepreneurs who can’t attract and maintain a highly motivated team rarely even get off the ground.

Thus if you want to change the world with your new business, you need to follow the example of startups like Zappos, which hires according to cultural fit first. Another example is Facebook, maintaining motivation with food, stock options, collaborative office space, an on-site laundry, and a competitive atmosphere that fosters personal growth and learning with great benefits.

These companies, and many others, are finding that strong leadership and personally-tuned benefits are the key to long-term satisfaction and motivation, certainly more effective than high salaries and financial incentives alone. Here is my personal list of the key practices that I recommend to every entrepreneur and business executive alike for motivating their team:

1. Bring passion and positive vibes to the workplace every day. Nobody likes a downer, especially for a boss. Every team member is motivated by being able to absorb energy from others, rather than being sucked dry by their own leaders. As a startup founder or executive, you need to subvert your own troubles for the sake of the team.

2. Fuel a reserve of positive energy outside of work. First of all, that means taking care of your health, getting enough sleep, and regular exercise. Find ways to recharge your emotional batteries, through supportive relationships and community activities. Team members need to see you at work, but they also need to know you have a life after work.

3. All work and no play creates a de-motivated team. Fun is always motivational, and it’s not inconsistent with work. There are many ways to add levity to a tough challenge, and engaging the team occasionally in some fun activities will work wonders for your team’s productivity and motivation. Don’t take yourself too seriously as well.

4. Always treat your team as your highest priority. Investors have long agreed that you invest in the team, more than the product. Yet many managers unintentionally de-motivate their team by being too busy with business challenges to communicate, understand, or help people. Good hiring, training, and mentoring are the best motivators.

5. Practice every day what you preach. Everyone is a role model for the people around them, and everyone needs a role model. Your team members follow your actions on integrity and follow-through, much more than any written company policy. Your display of pride in the company and respect for the customer will translate directly into motivation.

6. Consistently ask for and implement ways to improve engagement. Building morale is not a one-time task. It requires ongoing listening to team members, implementing and tuning new incentives over time. Examples include work time flexibility, transportation assistance, exercise opportunities at work, and rewards for setting the right example.

7. Provide timely personalized feedback and incentives. Everyone needs to be treated like an individual, rather than just another soldier. Tie incentives to measurable personal goals, as well company achievements. In today’s fast moving world, the time frame for giving recognition keeps getting smaller. Positive feedback has a diminishing half-life.

I believe that increasing your team’s motivation will be more effective than providing new and advanced tools for increasing productivity. The Hay Group, a global management and consulting firm, found offices with motivated and engaged employees were 43 percent more productive than the others. Other sources see the potential as high as doubling productivity through motivation.

So if your mission is to change the world, a great idea may be necessary, but is not sufficient. Your parallel challenge is to build and lead a highly motivated and engaged team that can execute with you, and can effectively motivate your customers to the same level. If you can do it, motivation can easily be your biggest competitive advantage. Start today.

Marty Zwilling

8 Activities To Satisfy Your Boss You Are Accountable

One of the attributes that I often recommend to the business professionals and entrepreneurs I mentor is to always be totally accountable for your actions and ideas. I too often see people who are quick to make excuses, blame failures on peers or customers, or see management as the reason for their lack of productivity. Lack of accountability can permeate an entire organization.

In any business, accountability ideally starts at the top. For example, Howard Schultz at Starbucks was quick to accept accountability for a racial bias incident a few years ago in one of his stores in Philadelphia, and he shut down all his stores for an anti-bias training session, rather than try to blame a single store employee or overall cultural conditions.

Of course, at all levels of an organization or business, there are opportunities for accountability that can make or break your career or your leadership perception in the eyes of others. Here are my key recommendations for how to prepare and what to do in more mundane business environments and organizations:

1. Make sure your activities are aligned with business goals. Personal accountability must be aligned with business requirements, or your performance will never be appreciated. The same is true with team goals and expectations. In other words, accountability has to lead to win-win outcomes for maximum business and career value.

   In my experience, developers can be so committed to a technology, such as hydrogen engines for cars, such that they may be unwilling to change as the business pivots for market reasons. In this context, accountability for a successful engine will never happen.

2. Document plans and progress, with checkpoints. To the best of your ability, make sure that all accountability assessments are based on actual facts, rather than emotions and dreams. Make sure you set the expectations and responsibilities, and measure your results. Don’t expect your manager and other leaders to always see your contributions.

   Accountability requires that you manage your own efforts, as well as keep others up to speed. Don’t allow yourself to get focused on a specific task, at the expense of other work. Setting your own metrics, and measuring yourself, will facilitate accountability.

3. Communicate ongoing needs and changes early. None of us can be accountable if we don’t know what is expected, or don’t have the required tools or training. It is up to you to communicate your needs and expectations clearly, before and during every assignment, rather than after a failure. Don’t pretend or actually be the victim.

4. Generously give credit to others where credit is due. Don’t be reluctant to recognize the contribution of others to positive results that you are accountable for. Also, it helps to work collaboratively with your team and other teams in the organization. Recognize that some decisions and control have to be delegated in complex business organizations.

5. Provide continuous improvement feedback to all. Accountable people always provide positive feedback to all concerned, without assigning blame or breaking relationships. Your goal should always be continuous learning and improvement. We all need feedback on what was done well, and what changes are proposed for the next time.

6. Be available for mentoring and coaching to others. Accountability means a willingness to accept responsibility for sharing what you know with others on the team and helping them find and use the tools they need to complete the job. It also means investing in relationship and trust building so they support you in a time of your need.

7. Be a proactive role model for team accountability. Don’t wait for someone else to lead the way in accepting responsibility for team results. Show them the way by being willing to declare positive accountability before being forced into a corner, or taking a defensive posture. You may find that your team, and your management, quickly rallies for you.

8. Look at work assignments from a management perspective. Practice empathy by stepping aside to look at your work as other people see it. You have to be accountable to their expectations, as well as your own. Ask for the insights of peers and other leaders, and really listen to their perspectives without being judgmental, emotional, or defensive.

In all cases, these strategies to improve your ability to be accountable will also improve your personal ability to be productive and feel real satisfaction from your work. The business will thrive from the things you get done, and the learning it gains, including from your failures. The result is a win-win situation for everyone, even in today’s fast-moving and rapidly changing environment.

Marty Zwilling

*** First published on Inc.com on 11/24/2022 ***

8 Strategies To Drive Your Startup To Profitability

A common pain of startups after an exhilarating first surge of early adopters is a long and frustrating plateau of slow growth, where it seems like nothing you do will get your business to profitability. Too many entrepreneurs don’t know what to do at this point, largely accounting for a disappointing 50 percent of startups that fail in the first five years, according to InvoiceTracker.

Some make big mistakes, such as Webvan expanding too fast with a huge infrastructure, and Pets.com, trying to grow the business with a negative margin, under the mistaken assumption that winning customers is more important than making a profit. Others do far too little, assuming the viral effect and word-of-mouth will soon kick in, and sales will suddenly grow exponentially.

In any case, it’s no fun to be stuck in this stage, struggling to make payroll, and dealing with impatient creditors and unhappy investors. First you need to take consolation from the fact that you are not alone, and more importantly you need to implement an active growth and marketing plan to include the following initiatives:

1. Ramp-up visibility and strategic alliances. It’s easy to get so pre-occupied with handling the business rollout that you forget to maintain and increase your social media interactions, search engine optimization efforts, and highlighting positive customer reviews on your website. Continually add new marketing and distribution partners.

2. Real growth always requires real marketing. Word-of-mouth and social media may get you started, but there is no substitute these days for special promotions, webinars, presence at trade shows, and actively calling on decision makers. There is no magic lever for growth, so several initiatives are required, with metrics to assess value returned.

3. Ask every employee to focus on sales. This starts with multiple messages from the top that growth is now the highest job priority, and key to survival. Openly reward employees who make the extra effort, champion cost-cutting issues, and enhance the sales process. Ask everyone to be an advocate of the business to their friends and connections.

4. Personally optimize every cash flow transaction. Resist the urge to delegate accounting decisions, under the assumption that incoming revenue takes the pressure off. Now is the time to take advantage of volume discounts and deferred payment plans. Many entrepreneurs forget that the growth phase may be your tightest squeeze on cash.

5. Increase the pipeline and the conversion rate. Now is the time to formalize lead-generation efforts, and initiate efforts to maximize the conversion rate to sales closure. Real growth requires new and innovative ways to find customers, as well as old-fashioned advertising and email blasts. Shorten the close cycle to grow faster.

6. Introduce automation consistent with growth rates. Manual processes and people are always the most expensive to scale, so every process needs metrics to determine when automation is appropriate. Some startups hire more people to delay automation, or spend money wildly on new tools for the future. Both are strategies for business failure.

7. Introduce new products and enhancements every month. One of your best sources of growth is existing customers, who are always looking for more opportunities to buy, and new offerings. Capitalize on competitor weaknesses that you can fill with minimal new investment. Actively listen to customer feedback, and don’t be a one-trick pony.

8. Aggressively enter new markets and sales channels. If your local market isn’t giving you the growth you expected, it may be time to expedite your expansion to new major cities or export opportunities. If your website isn’t pulling in the growth you need, expand to Amazon and other channels. Growth requires market innovation as well as product.

An entrepreneur who has struggled to fund and build a dream solution may think they can relax when the first wave of customers come in. Unfortunately, the challenges of scaling a business, and making it profitable, often last longer than the product development phase. The good news is these challenges are not rocket science, so anyone can do it. Don’t give up your dream too early.

Marty Zwilling

8 Key Business Growth Burdens You May Not Anticipate

Every new entrepreneur who has not spent years in corporate life has the advantage of an unbiased look at business opportunities, but at the same time has the disadvantage of missing critical business experiences that can cost them dearly in their first startup venture. In my experience, building a successful business is more difficult than building an innovative solution.

Fortunately, despite their lack of basic business experience, the destined-to-be-great entrepreneurs never give up, following Bill Gates after his first failure with Traf-O-Data, and Jeff Bezos after early failure with his online auction site. All too many others are so discouraged or financially destroyed by their business learning experiences that they never try again.

Fortunately, I’ve had the opportunity to work and learn for many years in both the corporate environment (IBM), as well as the exploding Silicon Valley startup environment of the 90’s. As an advisor to many startups since that time, here is my list of key business growth challenges that every first-time entrepreneur may not anticipate:

1. It takes relationships to make a business work. An innovative solution is necessary but not sufficient to build a business. Businesses require people relationships, to find the right team, investors, contract vendors, and attract customers. As an introvert and a techy, I know well the challenges of building relationships in today’s competitive world.

2. Startups don’t come with formal training courses. New entrepreneurs quickly find that what they learned in business school is no substitute for real-world business experience and training. Larger enterprises let you learn as you go, with minimal risk, and they pay for leadership training, employee management, and new project management tools.

3. A successful business is a long-term effort. Entrepreneurs are an optimistic and passionate group, who normally expect their idea to go viral soon, and success to follow shortly thereafter. They aren’t mentally prepared for the long-term grind, with repeated tough challenges along the way. It’s a 24/7 job with no time off for vacation or fun.

4. Personal finances must be kept separate from the business. Being an entrepreneur is a lifestyle, making it hard to isolate the startup finances from family financial stability and future retirement requirements. Startups don’t come with pension, health, or 401(k) plans included. Startup setbacks can easily cost you your house and credit rating.

5. Building a startup is more about love than money. People with experience in big businesses have learned that you won’t be happy even if well paid, unless you enjoy the job. Entrepreneurs who love to invent new things, but hate business, need to find the right partners before embarking down the path to a new business.

6. Not having a predictable income is an ongoing source of stress. People don’t appreciate a regular paycheck until they don’t have one. Entrepreneurs never know when they will be hit by technology advances, new competitors, economic downturns, or loss of a major customer. Early funding is a full-time effort, and it’s no fun for anyone.

7. Running a business is lonely at the top. Once you have formally established a startup with you as the CEO, all former teammates will see you in a different light as the boss. Quickly, it will be difficult to get unbiased input, and everyone will wait for you to make the final decisions. It’s hard to find someone to share your fears and challenges with.

8. Peer perceptions of you as an entrepreneur are not always positive. It’s popular today as a young entrepreneur to talk about your dreams and initiatives, and everyone seems to look up to someone running their own business. Later, colleagues with jobs in large corporations may look down on you as a person without job security or a career.

In all cases, I recommend to aspiring entrepreneurs that they spend some time first working for another startup, or in a corporate environment, if they aren’t absolutely certain about their lifestyle preferences. Life is too short to spend most of it in stress and pain, handling challenges you never anticipated, even if you are convinced that you can change the world.

Marty Zwilling