Friday, January 27, 2023

10 Keys To Winning Your Career And Startup Challenges

Contextual Robotics Institute 2018 Forum: Healthcare RoboticsIn business, you can never win every battle, but you must win the critical ones for your own longevity and the success of your business. Picking the right ones is more than half the battle. In my experience as a business advisor, I find that many people spend most of their time on the wrong problems, usually due to ego, daily pressures, or emotions. You must re-prioritize daily.

For example, I once had a business associate who loved to help his peers, which is a positive attribute, until he was unable to complete his own commitments on time, and his career was in jeopardy. As a business owner, I myself had to learn to depend on skilled partners, rather than jump in and try to solve every business challenge myself, from fund raising to social media.

Here is a summary of my recommendations for picking the right battles in a business environment, and how to fight challenges most effectively for satisfaction and growth:

  1. Set personal objectives and make your own decisions. Listen to others and seek their input, but don’t allow them to make your decision for you. Follow your own interests and business insights to increase satisfaction and long-term success. Create a personal business plan, with milestones for your own tracking, and celebrate each step completed.

  2. Help others who have the potential for helping you. By helping others, you will learn from their mistakes, and greatly increase their interest of helping you back. Both of these results will increase your odds of success on your next decision and step forward. In addition, helping others will give you experience you need in other business domains.

  3. Surround yourself with people who are smarter than you. None of us can be experts in all the disciplines required in any business. Build relationships with people who have complimentary skills, rather than “yes” people or just friends and family. You can then get better guidance, and learn more, in order to win on tough issues we all face in business.

  4. Become an active listener, and ask more questions. You can’t learn anything while talking, so try to spend more your time listening and asking for input. Pick your battles carefully, since real analysis requires focus, and this is required for good decisions and positive outcomes. Be sure to watch body language of others carefully, for more input.

  5. Budget your time carefully to work on the right problem. Due to the daily pressures of business, I find that many professionals spend their time on the issue of the day, rather than issues important to their future. The result is no decision or bad planning leading to personal failure on priority issues. Time management is a major key to business success.

  6. Don’t let procrastination leave you stuck and frustrated. Tackle the challenges first that are most important to you, rather than trying to solve every problem or seeking to satisfy someone else. Drive that issue to a conclusion and make a decision. Any decision is better than no decision, and it will leave you with the satisfaction of moving forward.

  7. Learn things from every setback, no matter how small. Everything learned is a success and step forward, so keep a positive perspective. How well you handle uncertainties by climbing over your hurdles and standing back up after a fall is what will determine your ability to win in the long run. Pick battles that have value in that context.

  8. Don’t let fear of failure lead you to compromise your values. Use your passion for positive results and confidence in your abilities to overcome the natural fear of failure when approaching any new challenge. Use your support resources and access to coaching to solidify your mindset and personal values, and don’t back down prematurely.

  9. Never assume a victim mentality in a business challenge. There is no entitlement to success in business, so the only way to win is to take full responsibility for your actions and decisions. It’s easy to blame the economy or some other person for your challenge, but you must learn that there are always more positive alternatives that you can find.

  10. Look for innovative alternatives that have never been tried. People who succeed in business recognize that everything is subject to change and innovation, and there are very few absolutes. Make it part of your satisfaction to find that unique solution no one else had yet seen or tried. You become the winner when you outwit your competition.

In my view, the business world is moving faster and faster, making the opportunities for your success even greater. Don’t let your own perseverance wane on any of the critical challenges and dreams you have now or will experience soon. We need your success to feed our own. Make every challenge a win-win.

Marty Zwilling

*** First published on Inc.com on 1/12/2023 ***

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Wednesday, January 25, 2023

5 Pitfalls to Avoid When Transforming Your Business

transforming-your-businessNo matter how well your business seems to have worked for you up to this point, you can be certain that it will need to be heavily transformed for tomorrow’s new world-wide economy and no industry sector boundaries. New digital technologies, business models, and regulatory rulings are forcing all of us to think outside of our silos and rethink what it means to operate effectively.

For example, only a few people today still think of Amazon as an online provider of books and related goods, now that they have exploded their business world-wide into every product arena, added web services (AWS), television and film production (Metro-Goldwyn-Mayer), a bricks-and-mortar grocery chain (Whole Foods), and more. None of us can afford to be a silo anymore.

As a business consultant, I can get you started in this transformation, but I was pleased to see more detailed guidance, including things to watch out for, in a recent book, “The Ecosystem Economy,” by Venkat Atluri and Miklos Dietz, both senior partners at McKinsey & Company with much experience. I will paraphrase their key strategy challenges here, with my own points added:

  1. You can be too focused on the short-term. Transforming your organization for the new global economy requires perseverance and long-term thinking. Lay out the potential growth trajectory of your business environment carefully with reasonable milestones, to strike a tight balance between long-term and short-term parameters and judge progress.

    In many cases, I see leaders lulled into a false sense of complacency by adequate short-term returns, and the pressures of daily operations. I urge you to block out time on your calendar at least monthly for more strategic thinking and long-term goals and objectives.

  2. Outsourcing the entirety of building a new system. Outsourcing may look like a quick and easy solution, but you can’t let a partner or supplier drive your business strategy and direction, and it will never absolve you of the responsibility of providing business success. It is fair to bring in outside technology to reduce the risk and speed the implementation.

    I recommend outsourcing for flexibility in existing operations, but you need to take the leadership role in preparing your company for the future. Most great business leaders, including Jeff Bezos, maintain a key internal team to study and implement the next steps.

  3. Not having a means to measure holistic impact. Don’t fail to develop the proper comprehensive metrics for assessing how you and any partners are doing in terms of value creation. It is vitally important to leverage your efforts to maximize all key constituents, including customers, team members, partners, and other stakeholders.

    In my experience, there are still only a few people who like to read numbers and understand them, aside from data analysts. The business ecosystem of tomorrow is too complex to be run by your intuition and gut feel, so don’t forget to add numbers discipline.

  4. Build too far or too close to the core business. If you start building too close to core systems, a transformation can cause problems as managers try to juggle and prioritize current operations. Reaching too far out can also make it impossible to leverage synergies with the current business, and reach beyond the current culture change ability.

    My own insight is that some companies can’t let go of their cores, like Blockbuster, never transforming them even in the face of a new world. Others, lured by hot new markets, abandon their core prematurely, with equally disastrous results. Always keep a balance.

  5. Not accepting failure on any of the new elements. Some failing elements and pivoting must be expected on all new initiatives. Rather than being too proud to admit failure, or imprudently continuing to invest, I recommend that you be transparent with all progress, good and bad, and also celebrate the learning you get from every failure along the way.

    Don’t let your ego or stubbornness drive you to give up too soon on your transformation efforts. Remember, long-term success is a journey, with many challenges in the road ahead. A few wrong turns should never deter you from reaching the destination.

While any business transformation can be challenging, I urge you to always put value creation for your customers, your business, and ecosystem partners ahead of profits. The potential in this emerging world-wide ecosystem market is greater than ever before, as is evidenced by Amazon, Google, Tesla, and others already in the game. It’s time now to get busy, or get left behind.

Marty Zwilling

*** First published on Inc.com on 1/9/2023 ***

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Monday, January 23, 2023

10 Keys To New Business Learning As An Entrepreneur

learning-from-failureIf you can’t deal with failure, then the entrepreneur lifestyle is not for you. Don’t believe that urban myth that all you need is a good idea, a little fun work, and the money will start rolling in. When you are pushing the limits, nobody gets it right the first time, or even maybe the tenth time. That’s why the term “pivot” was invented, so you don’t have to call every change a failure.

Thomas Edison called every failure an experiment (now it would be a pivot), and each one told him successfully what didn’t work. Mistakes are more insidious than failures, and should be avoided at all costs (use your advisors and other resources). Mistakes are things you do on purpose, with negative consequences already known, because you didn’t do your homework.

Failures and pivots come in all shapes and sizes, but entrepreneurs need to adhere to a common set of principles for failing productively, leading to ultimate success:

  1. Don’t allow the same failure twice. This is called the “fail forward” strategy, or learning more about your business from each failure, as well as developing the confidence and commitment to make decisions and take responsibility for them regardless of the results. Repeating the same failure, or the common failures of others, is a huge mistake.
  1. Keep the cost of failure survivable. Keep the key elements in your strategy and rollout small enough and tested early, so that a single failure will not bring down the rest of your startup. This is often called the “fail fast” strategy, with the ability to adapt and iterate to success, based on learning.
  1. Make each move forward a planned experiment. Don’t rely on random opportunities and default decisions to set your strategy. The idea is that there is a right way to go wrong, and “failing smart” allows you to learn something from each pivot. Overt decisions, based on rational thought and real data, will always trump no decision.
  1. A credible failure makes an entrepreneur more investable. Emanating from Silicon Valley, there is a culture of “fail often,” and you’ll succeed sooner. But be aware that failures are analyzed as closely as successes, to see if they represent real innovation, real learning, and a rational decision process, indicating success potential.

  1. Actively seek and don’t ignore critical feedback. Successful entrepreneurs assume some adaptation and change will be required, so they actively seek feedback, spot failures and fix them early. They avoid the instinctive reaction of denial, or the stubbornness of charging straight ahead despite evidence that a strategy is not working.
  1. Determine not only what went wrong, but also how to do it right. Avoid random trials and errors. If you don’t learn from a specific failure, it becomes a mistake that is destined to happen again. Every failure deserves a root cause analysis, so that you end up fixing the real problem, and not just a symptom.
  1. Document and update business processes after each failure. Too many failures in startups result from key business processes not being documented at all, or being non-functional. Failures should result in better processes and better documentation, or they become mistakes destined to be repeated.
  1. Never blame bad luck, poor timing, or misjudgment. These are most often excuses, rather than reasons for a failure. There will never be a perfect time to launch a startup. There will always be uncertainty, and we will always be humans, using judgment calls in lieu of knowledge and real information. Explore the root cause of every failure.

  1. Listen to conventional wisdom and advisors, then chart your own path. New paths are the key to success for an entrepreneur, but unless you listen and do your homework, you will be unable to recognize the old proven paths to perdition. Blindly following old paths, or ignoring known dangers, are unforgivable mistakes.
  1. Practice resilience as the best antidote to failure. Thomas Edison had resilience, bouncing back after 1000 failures on the light bulb alone. Many experts believe that the primary cause of startup failure is not running out of money, but quitting too early. If you accept failure as learning, it’s not discouraging to keep adapting until you find success.

Success may not really always start with failure, but the wise entrepreneur should expect it, embrace it, and capitalize on the learning opportunity. In reality the difference between success and failure in a startup is very small – for example, being acquired in the throes of a bad experiment might be seen as a success or a failure, depending on your perspective.

In the entrepreneur lifestyle perspective, every learning experience is a success, so failure is not an option.

Marty Zwilling

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Sunday, January 22, 2023

8 Strategies To Capitalize On Untapped Global Markets

global-markets-untappedIn my experience, the Silicon Valley startup model, focused on disrupting established industries, has treated the USA well and created some great global businesses. Yet many of you are telling me that we are all missing big opportunities by not recognizing the unique challenges faced by startups in developing countries, where infrastructure is lacking, and talent is not so concentrated.

In effect, Silicon Valley needs to take a more global perspective. It has played almost no role in the emergence of current non-US bred startups, including Alibaba in China, Waze from Israel, Paytm in India, and many more. From my consulting with entrepreneurs in Europe and other countries, I’m convinced that we all could benefit from adapting to meet their environments.

I found these challenges and opportunities outlined well in a classic book, “Out-Innovate,” by Alexandre Lazarow. He comes from a background in venture capital from inside and outside the Valley, as well as entrepreneurship work with startup efforts around the world. I second his list of top innovation challenges and strategies to capitalize on untapped global startup opportunities:

  1. Create new markets rather than disrupt existing ones. Silicon Valley is focused on disrupting established industries, but in many parts of the world, innovators must create new sectors, such as education, health care, financial services, and energy. Competition is not always a bad thing, and the real purpose is often to make the world a better place.

  2. Design the full stack, not just a new software element. In Silicon Valley’s classic model, startups must start “asset light.” That means they look for focus on a single piece of the value chain, to limit capital required, people, hardware, and complexity. The idea is to build excellence in one area, and get the rest from the ecosystem.

    In other parts of the world, innovators often need to develop both the ultimate product or service, as well as the enabling infrastructure that underpins it. Even here, Elon Musk faced this issue with Tesla, needing a support ecosystem as well as new technology.

  3. Build for sustainability and resilience, as well as growth. With a singular focus on building unicorns, very rapid growth has been a key metric. But for many other innovative startups in emerging markets where shocks are frequent, a focus on sustainability and the longer view are more key to success. Indeed these principles are good for all startups

  4. Connect ideas and networks from around the world. With today’s pervasive Internet, the best ideas traverse continents and improve with successive waves of adaptation, through diversity in experience, culture, and worldview. Thus Uber’s ride sharing evolved to Gojek in Indonesia, to include delivering food, packages, and even financial services.

  5. Target a global market rather than a local from day one. Even Silicon Valley is running out of local markets large enough to sustain scale. Today’s smart innovators target a large opportunity from fragmented regional markets around the world. It’s also a good defensive move, to preempt competition, which is bound to come world-wide.

  6. Assemble a distributed A-team from top world talent. Silicon Valley’s conventional model is to integrate local experienced engineering, product development, and marketing people for the big push. The distributed model draws on a diverse pool, helps manage costs, and captures regional insights and focus necessary to win local customers.

  7. Manage risk – don’t just “move fast and break things.” Managing risk is about determining upfront which risks are acceptable and which are non-negotiable. Many global ecosystems don’t have the tolerance for legal negotiations and recovering from mistakes. Even consumers here in the US are demanding a more responsible approach.

    Witness the recent backlash against Facebook and Twitter for the non-transparent use of customer data, and for enabling foreign election interference. Facebook’s market value tumbled many billions in 2018 due to users’ decreased confidence in the platform.

  8. Develop new venture models for tougher ecosystems. Without easy access to venture capital, entrepreneurs might have a very innovative idea, but no way to get it off the ground. Investors must learn to appreciate the value of global diversification, be less restrictive on timelines, and prioritize social impact as well as business growth.

I see more and more evidence that that the larger potential for you today as an entrepreneur is to create new industries on a global scale, rather than disrupt old ones. That requires a redefinition of startup and funding best practices and focus, including building new ecosystems, a focus on resilience, societal challenges, and diversity. The global entrepreneurial age is upon us.

Marty Zwilling

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Saturday, January 21, 2023

10 Ways To Make Your Funding Pitch More Hard-Hitting

funding-investor-presentationThe average length of a funding pitch to angel investors is ten minutes. Even if you have booked an hour with a VC, you should plan to talk only for the first fifteen minutes. The biggest complaint I hear from fellow investors is that startup founders often talk way too long, and neglect to cover the most relevant points. Or they get sidetracked by a technical glitch due to poor preparation.

If you start by pitching your extended life story, that’s the wrong point. Equally bad is a full tutorial on your new disruptive technology. Investors are more interested in your solution and your business, rather than your technology. Here are some tips on the right approach and the right points to hit:

  1. Match your material to the time allotted. If you have ten minutes, that means no more than ten slides. Then match your pace to cover all the material. I’ve seen several presentations that never moved past the first slide before running out of time. An obvious effort to keep talking after the time limit won’t save your day with investors.
  1. Remember you are pitching to investors, not customers. Some entrepreneurs seem to think that their product pitch is also their investor pitch. I outlined what investors expect to see in an old article “Adding Slides Does Not Enhance Your Investor Pitch.” These are tuned to the ten-minute limit, but are just as adequate if the investor gives you an hour.
  1. Check the setup and set the stage. If the projector doesn’t work, or won’t connect to your laptop, you are the one that loses. Have at least one backup plan, such as copies of your slides to hand out and discuss, in case all else fails. The first words out of your mouth should be “Can everyone hear me, and read the screen?”
  1. Research your audience before presenting. The most respected presenters are the ones who have done the research before-hand to know who is in the audience, and have tailored their message to these interests. If you know only a few people in the audience, acknowledge them, and convince the others that this is not a random cold call for you.
  1. Dress appropriately and professionally. It’s always better to be over-dressed than under-dressed. Business casual is the standard. Remember that most investors are from a generation where faded and torn jeans were on the wrong side of success in business.
  1. Let the top person do all the talking. Tag team shows don’t work in short venues. More importantly, investors want to see and hear the top guy – typically the founder or CEO. They will be judging his aptitude, his character, and his passion. Others can be present for effect, but deferrals to team members for answers are a sign of weakness.
  1. First, get their attention with your elevator pitch. Start with the problem and your solution. These are your hooks, and they better be covered in the first 30 seconds. State your value proposition, and what specifically you are offering to whom. Skip the acronyms, history of the company, and the colorful autobiography.
  1. Lead with facts, but skip the details. Skip the generic marketing phrases like more user friendly, massive opportunity, and paradigm shifting. “According to Gartner, the opportunity is 100 million by 2025, with 12% compounded growth.” Investors don’t need to know the implementation details of your patent or customer support plan.
  1. Don’t forget to ask for the order. How much money do you need, and what percent of your company are you willing give up for that amount? If you want investor interest, the business parameters of a deal should be presented as clearly as the product parameters.
  1. Close by asking for questions and promising follow-up. Acknowledging feedback and actually listening for ways to improve will always lead to a positive impression. You should answer questions with data if you have it, but avoid defensive responses in favor of a promise to follow-up after the meeting.

Most importantly, don’t forget to practice, practice, practice. Just because you have given a thousand pitches in your life, don’t assume you can finesse this one by reading the bullet points in real time from the slides that your team put together for you. You need to be totally familiar and comfortable with your pitch to give it effectively.

Forget the theory that you can “rise to the occasion” and impress everyone with your dynamic speaking ability. If you are pitching the wrong point in the wrong way, the occasion will be more your demise rather than the rise of your dream.

Marty Zwilling

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Friday, January 20, 2023

5 Principles For Learning From Practice In Business

female-entrereneurs-trainingAfter years of working in small businesses as well as large ones, I’m convinced that you shouldn’t expect to get it all right the first time, and learning how to run any business is more a result of practice and experience than just academics. Therefore, I often recommend to entrepreneurs and business professionals that they not get too frustrated with initial failures or give up too soon.

Of course, there are some basic principles that people in all careers follow today in maximizing their success, including discipline, determination, learning from mistakes, and practice. If you are into instant gratification or overnight stardom, then starting and growing a business may not be for you. Just ask any one of big winners in business today, such as Elon Musk or Jeff Bezos.

Here are the key recommendations I offer all my clients for learning and moving forward in the business arena, based on my own experience and listening to business leaders and professionals in technology, as well as services:

  1. Define your success objectives early and don’t stray. Don’t be easily distracted from your goals, and don’t expect business success from a random walk. If you don’t know where you are going, it is highly unlikely that you will ever get there. Stay motivated and positive on making every iteration get you a step closer to that desired destination.

    Successful people find that setting goals and objectives provide motivation, rather than waiting for other incentives, such as easy cash or living free. Yet I find that motivation only takes you so far. Goals, when used correctly create habits, which drive true success.

  2. Focus on what you have learned from each iteration. Even when results from your plan seem to have eluded you, find positives in what you have learned. Success comes to those who never give up, and adapt most quickly. Use your vision and passion to keep the energy flowing, guide your efforts, but don’t hesitate to pivot as you learn from failure.

    The great businessman Thomas Edison called his every iteration an experiment. He made no excuses for 10,000 light filament failures. Challenged by his contemporaries, Edison responded: “I have just found 10,000 ways that won’t work.” He then succeeded.

  3. Keep your primary attention on market needs today. Change is the only constant in today’s world of customers and competitors. You can only succeed by listening to all feedback, positive and negative, and iteratively adapting to what you have learned. Factor these changes into your original dream, but don’t assume it can change the world.

    In extreme cases, the change you learn about will require that you essentially reinvent yourself or your business. I believe in the new adage that if you're not disrupting, you will be disrupted. You will need to get outside of your comfort zone to survive and prosper.

  4. Build more relationships with experts and peers. This requires proactive networking and active participation in relevant industry conferences and forums. In business, success is often not what you know, but who you know, and who knows you. It’s easy to get too immersed with daily issues, so be sure you reserve some time for relationships.

    An example is the famed mentoring relationship between Bill Gates and Warren Buffett, both very busy and very smart people. While they have always been in totally different businesses, each still gives much credit to the other for their own learning and success.

  5. Keep up with the latest tools and academic offerings. Just remember that you must never be too busy to learn new things. New software tools and business courses arrive every day, and keeping abreast of the latest in this rapidly changing world is a primary key to progress and success in business. Not keeping up means falling behind quickly.

    In my view, a relatively recent technology which has already transformed many businesses is “artificial intelligence (AI),” yet the potential is even larger. If you don’t find it in any of your solutions or processes yet, it may be time for some new learning.

I assure you won’t succeed with every business step, but you will always learn something new. By capitalizing on this learning, and following the principles outlined here, you can make every initiative, even failures, a step forward in your journey to business success. I submit that if you celebrate every step forward, you will find it comes easier and gets you farther every time.

Marty Zwilling

*** First published on Inc.com on 1/5/2023 ***

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Wednesday, January 18, 2023

6 Keys To Competitive Advantage By Memorable Service

memorable-experience-serviceCustomer service has traditionally been focused on the resolution of complaints, primarily after a transaction. With the advent of social media, and instant communication via the Internet, that definition has been expanded to include all aspects of the customer experience, from finding you and what they need, to the ease of completing the transaction, as well as all follow-on support.

In this context, even “satisfied” is only a “meets-minimum,” and does not put you ahead of your competition. To stand out, you need to provide exceptional and memorable personalized service at all levels in order to get the advocacy and loyalty of your customers, and get the word-of-mouth recommendations that you need to grow the business. Even the best marketing doesn’t do it.

As a business consultant, I’m often asked for some pragmatics on how to accomplish these objectives on a regular basis, without losing control or costing a fortune. My recommendations always include adopting a customer mindset, as well as the following steps:

  1. Accept today’s definition of relevant customer support. With pervasive access to social media, customers no longer differentiate poor product repair and replacement from a poor shopping experience or customer usage satisfaction. Your challenge is to excel in all elements of a customer interaction, from pre-sales to long-term advocacy and image.

    This new definition applies equally to brick-and-mortar stores, as well as online platforms. In reality, many companies now offer a “clicks and bricks” business model, with shopping online, and then completing the purchase and support at a physical location.

  2. Treat every customer exceptionally before they complain. Trying to resolve every problem, after it happens, is too little too late. You must know or react to the expectations of individual customers, and personalize their treatment to gain their remembrance of exceptional service. Great customer service now must be proactive, rather than reactive.

    For example, the Ritz-Carlton Hotel Company has implemented a practice of authorizing employees, after relevant training, to spend up to $2,000 per guest, without pre-approval, to solve a special requirement for any guest that will make their visit totally memorable.

  3. Make sure non-contact experiences match face-to-face. As customers do more searches, transactions, and support online, these elements can easily torpedo your exceptional personal interactions by appearing non-responsive or rote. An oversight or deficiency on any platform can easily cancel all other positives, and be hard to overcome.

    Amazon is the benchmark for providing exceptional online experiences, by showing you options you like from past purchases, one keystroke ordering, and delivering the item to your door very quickly, potentially (in the future) even before you ordered it.

  4. Prioritize value to the customer over and above cost to you. This means real customer value emphasis in all interactions and marketing, versus low price and price concessions. It also means proactively collecting and highlighting testimonials from other customers, and communicating these online and in face-to-face customer interactions.

    Exceptionally satisfied customers that perceive a lot of value in your offering are usually willing to pay more, while unsatisfied customers will leave, even at a low price. You may find that “cost-plus” pricing results in giving away margin and losing incremental profits.

  5. Incent a customer collaboration culture across your team. Real customer relationships are required to understand current expectations, keep ahead of change requirements, and nurture advocacy and word-of-mouth marketing. Reward team members who excel in these relationships, and provide training and processes for others.

    Feedback from the field shows that a successful collaboration, whether with customers, employees, vendors, or other business partners, will make your company stronger and more competitive in the marketplace. This results in more profits and growth for you.

  6. Drive down decision making on how to treat customers. You need real engagement and commitment to exceptional customer experiences from every member of your team. Inflexible processes. as well as centralized decision-making work against this goal. Start by hiring the right people, and providing the necessary training, coaching, and mentoring.

    In all cases, employees can only make the right decisions if they know and share your vision, values, and priorities for the business. Thus effective communication is the key here, both from the top down as well as the bottom up. You can never edict all decisions.

Not so long ago, every business assumed that the keys to competitive differentiation were the highest quality product, the best value for the buck, and reasonable customer service as the last priority. Today, I’m convinced that the customer priorities are reversed, requiring a new focus on customer service, with the broader definition, to keep you in the lead for growth and success.

Marty Zwilling

*** First published on Inc.com on 1/3/2023 ***

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Monday, January 16, 2023

10 Ways To Boost Online Power In Building A Business

digital-marketing-influenceSuccessful entrepreneurs often start with a “random” idea, but they quickly focus their efforts and follow a “system” to organize their startup and maximize the clout of their activities. Too many entrepreneur “wannabes” never get past the idea stage, or strike out randomly in many directions, hoping that their passion will convince people to follow them and make their business grow.

There are many systems for business out there, but all of them need a way to keep score on progress and impact. If your business is to be a thought leader in the social media world, you need a system of grading how much influence you have online, much like the original Klout score, as explained in the classic book on this subject, “Klout Matters,” by Gina Carr and Terry Brock.

I’m not convinced that maximizing any grading system will maximize your clout in every business, but I do agree that social media must be a part of the system that every entrepreneur needs to implement today to build their business. I especially agree with the ten strategies that these authors outline for building systems leading to businesses with clout in today’s world:

  1. Clearly define your purpose. You have to clearly understand what you want to achieve before you are likely to achieve it. If you can’t write it down, you probably don’t understand it. Key factors gating your success will always be your level of competency in your chosen field, level of demand for that skill, and how easily you can be replaced.
  1. Find those arenas where your needs are met. If you want to be a thought leader, find where your potential followers hang out. If you have something to sell, build relationships in the community of buyers. Experimentation is an important part of this process. You will need to test groups constantly to make sure you are in the right one.
  1. Allocate some time to spend on social media. Social media is critical today to almost every business. But make sure the time you spend is quality time, focused on your objectives, and balanced in relation to all your other business requirements. Spend time learning new techniques, and time measuring the return from your efforts.
  1. Be a great resource for others. What we all need is trusted advisors who can help us decipher the clutter. As you become an expert in your field, you need to offer yourself as a trusted advisor, and you will quickly gain a loyal following. Writing, audios, and videos are all great ways to do this, since these all facilitate the one-to-many multiplier.
  1. Provide a unique point of view. Be creative and add value to what you offer your target market. This is true for thought leaders, entrepreneurs, as well as anyone who is looking to be hired in a job. Adding value builds influence and subsequently can build your business, as well as your Klout score. People don’t follow followers or repeaters.
  1. Continue to learn and grow. One of the most important skills that every leader must nurture is how to learn. Some people learn best from conferences, while other learn best from blogs and other information online. Standing still is falling behind, and you can’t afford to fall behind in today’s fast paced business environment.
  1. Forget the old “spray and pray.” A popular old marketing concept was that if you did enough broadcasting of your message to enough people, you would find success. Today you need to talk with, not at, your customers and constituents to get ideas. The best thought leaders have learned how to listen and acknowledge their community.
  1. Build a team. Operating alone in today’s complex business world, including the many social media channels, is not physically possible as your business grows. The good news is that with new technology and the Internet, you can tap into the services of, and build relationships with brilliant people around the world, to build an integrated virtual team.
  1. Seek exposure to new people who are relevant. People come and go in the real world and on social media. Thus it is important that you continually expand your network to engage new people who are building influence in your community. Only in this way will you be exposed to new thoughts and ideas, and enhance your own digital influence.
  1. Focus on a specific niche. You need to find a niche where you have both passion and competency. More passion is not a substitute for focus and competency. Make sure the niche is large enough, and includes people with money, enough to provide an income for you to continue your efforts and be successful.

Influence is more important than ever in today’s connected world as brands, companies, and individuals vie to become the next big phenomenon. Do you have any idea how much influence your company commands today, and what is your business doing to extend that influence to the bottom line?

Marty Zwilling

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Sunday, January 15, 2023

6 Ways To Develop A Business To Support Your Solution

business-leadership-growthAlmost every entrepreneur starts their journey by developing a solution, based on their idea of a new technology or required service. These idea and developer skills are necessary, but not sufficient, to build a business. A real business requires leadership – thought leadership to attract customers and mind share, as well as people leadership around a team, partners, and investors.

One answer is for the developer to find a partner, like Steve Jobs, who is a leader to build and run the business, and two heads in a startup are almost always better than one. But in my experience as a startup mentor, I find that the happiest and most successful entrepreneurs in the long-term are those that continually stretch themselves to get comfortable in the leadership role.

In fact, being a leader is often outside the experience and training domains of both experienced developers and experienced business professionals. As pointed out in a classic book by leadership expert Herminia Ibarra, very few people are born knowing how to “Act Like A Leader, Think Like A Leader.” But we can all learn and step up if we get the right guidance.

I really related to Ibarra’s direction on how to build your leadership skills by learning to complement your insights with outsights, defined as the valuable perspectives you gain from external experiences and experimentation. Every entrepreneur already knows that building a startup is all about experimentation, new experiences, and problem solving.

To get you started, here is my summary of a half dozen of her key tips, re-focused to the leadership success elements for entrepreneurs, even though the same principles apply to business professionals in larger companies, and even non-business domains:

  1. Don’t be afraid to challenge your own identity. Because doing things that don’t come naturally can make you feel like an imposter, authenticity becomes an excuse for staying in your comfort zone. The trick is to work toward a future version of your authentic self by doing just the opposite, stretching way outside the boundaries of who you are today. Emulate the leadership attributes of entrepreneurs you admire, such as Richard Branson.
  1. Let go of performance goals that limit new learning. We all like to do what we already do well, so it’s easy to focus on achieving higher performance in that domain. Take the risk of setting goals in the leadership domain that will force non-linear learning. This is called avoiding the competency trap, and lets you bridge to new competencies.
  1. Manage the stepping up process. Let the gap between where you are and what you want to achieve be the spark that motivates you to action. Stepping up to play a bigger leadership role is not an event; it’s a process that takes time before it pays off. It is a transition built from small changes. Map out the steps, and celebrate each success.
  1. Practice your new learning in extracurricular activities. Professional roles outside your startup can be invaluable and less risky for learning, practicing new ways of operating, raising your profile, revising your limited view of yourself, and improving your leadership capabilities. It can then be exhilarating to bring these outsights back home.
  1. Create and use new networks to tap new ideas. When you connect to people in different worlds, you will access different perspectives to broaden your own. Avoid the network trap of sticking to the same old players for insight, motivation, and advice. Leaders need at least three different networks – operational, strategic, and personal.
  1. Start acting and thinking like a leader now. Stretch yourself to take action now, and recognize that you may not see at first how all the dots connect as you start branching out beyond your comfort work zone, habitual networks, and historical ways of defining yourself. Slowly but surely a more central and enduring leader identity will take root.

Thus if you have mastered the art of developing solutions, but struggle with building a business, it’s time to focus on your critically important leadership skills. Stop hiding in your comfort zone, and branch out for some new outsights. You too can find an entrepreneur identity in yourself that you never thought possible, and business success that you once only dreamed about.

Marty Zwilling

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Saturday, January 14, 2023

10 Tips To Ensure That Your New Venture Is Investable

Free close up of two people hands, signing documents with laptop on table in office image, public domain CC0 photo.Investors will tell you that they love to put money into startups that are scalable, and ready to become the next unicorn. But what does that really mean? Simply stated, it means that your business has the potential to multiply revenue with minimal incremental cost. Ready to scale is when you have a proven product and a proven business model, about to expand to new geographies and markets.

A software product is a classic example of a scalable solution, since it costs real money to build the first copy, but unlimited additional copies can be quickly cloned for almost no incremental cost. Most consulting services, like marketing, are not scalable, since they must be delivered by experts, and cloning experts is slow and expensive. Investors don’t invest in services startups.

Here are some pragmatic tips on how to make your startup more scalable and investable:

  1. If you need investors, start with a scalable idea. Just because all your buddies think an idea is cool, that doesn’t mean it is scalable. Investors like ideas based on market research from outside experts, like Gartner Research, proclaiming a billion dollar opportunity with a double digit growth rate. These are more likely scalable and investable.
  1. Build a business plan and model that is attractive to investors. I see too many business plans that are really product plans for customers, touting free services and long feature lists. It’s hard to build and scale a business on free high-support products. Scalable businesses have high margins (over 50%), low support, and minimum staffs.
  1. Use a minimum viable product (MVP) to validate the model. No product, even with a large opportunity, is ready to scale until you can show it working, with multiple customers paying the full price, to validate the business model. Count on multiple pivots with real customers, before you get it right, before you ask for investor money to scale.
  1. Build a strong team to take yourself out of the critical path. If you are still spending most of your time working “in” your business, rather than “on” your business, then you are not yet ready to scale. Show that you have and can continue to hire the right people to run the scaled business without you being everywhere and making every decision.
  1. Outsource what is non-strategic to optimize leverage. Smart entrepreneurs never outsource their core competency, and never rely on intellectual property they don’t own. They also don’t try to do everything in-house, since growing all the expertise you need is slow and expensive. Scaling requires leveraging outside resources.
  1. Focus on marketing and indirect channels to get the message out quickly. Direct marketing is generally not scalable, especially on low-cost high-volume products. These days, heavy marketing is always required to make your startup visible and scalable amid the flood of information from all sources to all customers. Word-of-mouth does not scale.
  1. Automate to the max. A startup that is labor intensive and staff intensive is not scalable. Start early looking at production automation, proven process technologies, and minimum staff approaches, before you begin scaling. Document processes and build online training videos so new people can come online quickly and consistently.
  1. Attract and relish investor funding. Organic growth (reinvesting profits only) will not allow you to build the “hockey stick” growth curve desired by premium buyers at exit, or financial analysts positioning you for public stock sale. You will give up some control with investors, but their expertise and experience is usually more than worth the cost.
  1. Consider all possibilities for licensing and franchising. Many markets already have major players, so figuring out how to make them partners is much more effective for scaling than trying to out-market them. In other areas, once you have a documented and proven model, franchising will let you scale much faster than managing every location.
  1. Define a business that is open-ended and continuously improving. If your startup sounds like a one-trick pony, it won’t be perceived as scalable. Don’t try to solve every customer problem at the same time, but build a strategy and plan that shows continuous innovation, leading to follow-on complementary solutions well into the future.

Let me make one thing clear – not everyone needs or wants investors, or a highly scalable business. Ninety percent of small businesses today are family businesses, which can be very successful, satisfying, and small by design. It’s a strategic decision. If your passion is to change the world, or even dominate an industry, scalability is the only way to multiply your arms and legs, and the hours in your day. Are you feeling the need yet in your own startup?

Marty Zwilling

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Friday, January 13, 2023

9 Point Checklist For Success In People Communication

businesswoman-document-previewEvery business professional and entrepreneur believes they are good communicators, but how do they know? It’s really the perception of the recipients that counts, and poor communicators are almost always poor listeners, so they don’t hear the shortcomings. Warren Buffet once told a class of business students that better communication could boost their value by fifty percent.

That’s certainly worth going after, so it is time for all to take a hard look in the mirror, recognize the need to improve, and make the commitment to change. But looking in the mirror doesn’t help unless you know what to look for. I see real help the classic book, “What MORE Can I Say,” by Dianna Booher, one of the most recognized business communication gurus, which clearly calls out the parameters of effective business communication.

In that context, she offers a nine-point checklist for success in the art of communication and persuasion that I believe every professional should use in their own self-evaluation. I’ll paraphrase a few of her insights here to get you started:

  1. Generate trust rather than distrust. Effective communication requires trust in you, your message and your delivery. We tend to trust people that we think are like us, or we have social proof that others trust, or we feel reciprocal trust from the sender. People who are optimistic, confident, and demonstrate competence generate trust. Are you one of these?
  1. Be collaborative rather than present a monologue. Collaborating for influence has become a fundamental leadership skill. Be known for the questions you ask – not the answers you give. Statements imply that you intend to control the interaction, whereas questions imply that other input has value to arriving at a mutually beneficial decision.
  1. Aim to simplify rather than inject complexity. Simplicity leads to focus, which produces clarity of purpose. People distrust what they don’t understand, what they perceive as doublespeak, or things made unnecessarily complex. Influencing people to change their mind or actions requires building an intuitive simple path to your answer.
  1. Deliver with tact and avoid insensitivity. Some word choices turn people off because they are tasteless, tactless, or pompous. Phrase your communication to avoid biases that might create negative reactions. Consider using other authority figures or quotes to deliver a more persuasive message while eliminating any sensitive implications.
  1. Position future potential instead of achievements alone. The allure of potential is normally greater than today’s actual achievements. This is especially true for career advancement, motivation, and the power of systems. For customers and clients, let them have it both ways. Consider what you can package as your own untapped potential.
  1. Consider the listener perspective rather than the presenter. Listeners tend to average all the pieces of information they hear and walk away with a single impression. More is not always better, so reduce the length of presentations and speeches. Perceptions are more important than reality. Avoid the over-helpfulness syndrome.
  1. Tend toward specifics rather than generalizations. Many executive speeches miss the mark because they aim for the general constituency and hit no one. People need to know how a message relates to them personally, not just what has to be done and why. Your challenge is to make the future seem attainable and applicable to each listener.
  1. Capitalize on emotions as well as logic. Emotion often overrides logic, but logic rarely overrides emotion. For many listeners, a logical explanation merely justifies and supports an emotional decision that has already been made. Recognize and calm first any emotional reactions of fear. Engage multiple senses to reach a listener’s emotion.

  1. Lead with empathy before your own perspective. Empathy starts with active listening to what’s being said and what’s not being said. Listen for the gaps and distortion between perception and reality, and then focus on closing these gaps before any persuasion to your own perspective is attempted. Let others help you listen, and tune your response.

As the economy struggles to flourish, and the competition gets tougher, you need every ounce of communication skill you can muster to land the career and business opportunities that will be coming your way. Standing still means falling behind. Are you listening and changing at the right pace to get your fifty percent advantage?

Marty Zwilling

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Wednesday, January 11, 2023

10 Obstacles To Creative Responses For Market Growth

market-growth-chartSuccessful entrepreneurs are the ones who think the most creatively, not only in their initial product or service, but more importantly all through the stages of growth from startup to maturity. But even the best of them can easily slip into some bad decision habits that limit or hurt their business, due to natural human tendencies and the pressures of business challenges.

Obviously, the business of business has been around a long time, with many “best practices” well-defined and well documented, so creativity that ignores these is usually not a good thing. Thus every entrepreneur struggles to achieve that balance between methodically following “proven” processes, versus a new and creative approach which may be a real differentiator.

In my experience as a mentor, I find that keeping creative thinking in the balance is a challenge for every startup, due to the natural employee tendency to resist change. I agree with the classic book by Ros Taylor, “Creativity at Work: Supercharge Your Brain and Make Your Ideas Stick,” which outlines some key psychological impediments to creative business thinking and change:

  1. Just use the data metrics. Shocking statistics, like unexpected losses last quarter, can generate a knee-jerk cost cutting decision, when further analysis and creative thinking might better close the gap with new revenue sources. Using data metrics alone for decisions, without seeking the root problem and alternative solutions, kills creativity.
  1. Let’s just be optimistic. Optimism is essential for long-term success, but it can delay or cloud short-term decision requirements. Entrepreneurs have to be careful not to look too hard for evidence that confirms their passion and positive perspective. Be a realist when making a decision and an optimist when implanting it.
  1. The way we do things. It’s human nature to believe that the way we have first learned and long done things is the best way, and other ways won’t work as well. It stops us from having to learn anything new. One of the reasons change is hard is that people have to unlearn the old way first, which is twice as hard as just learning something new.
  1. Tricked by recency. We tend to remember the first and the last things we hear – the primacy and recency effect. Sales people tend to remember the latest product when selling to clients, not the one best for that customer. So when decisions are to be made, we tend to remember recent information and issues. Not always to good effect.
  1. Group think will give the best results. Group results are often dominated by an autocratic leader, or represent assimilation of the lowest common denominator. Most people tend to be compliant, rather than risk conflict. Creative ideas are the outliers, and tend to be eliminated first, rather than evaluated fully. Diversity challenges group think.
  1. Low appetite for risk. With humans as well as with animals, you tend to get what you reward. If you reward ‘right first time behavior,’ you might get fewer mistakes but you will also get fewer attempts at trying new things. ‘Fast failure’ and ‘minimum viable product’ are startup concepts geared to facilitate creativity while still mitigating risk.
  1. Polarized thinking. Early failures tend to swing later decisions entirely in the opposite direction, which can have equally traumatic results. Some people tend to manage challenges with “either/or” thinking, rather than creative “both/and” thinking to try to solve the problem. If there are polar opposites, look for the positives on both ends.
  1. Generate more stress. The more critical a problem becomes, the less creative our decision making will be. Concentration is impaired by stress, judgment and logical thinking deteriorates, we tend not to communicate well, we tend to stop gathering data, and we tend to make quick, impulsive, short-term decisions. Work on reducing stress.
  1. No feedback or results analysis. Every decision needs review and continuous feedback from constituents for validation and tuning. In the world of business today, the only constant is change. Even good decisions today will require adjustments as the environment or customers change. Avoid the tendency to fix blame and look for excuses.
  1. Failure to learn. Experience is inevitable; learning is not. Review and measuring decision results facilitates learning, just like sales metrics facilitate a better understanding of sales. Creativity without learning will be short-lived and ineffective. Learning required effective listening, and creative thinking to make sense out of tough experiences.

It’s time to get past the myths and mystery about creativity. Creative people don’t have to have eccentric personalities, work in the arts, or work in isolation, to achieve results. It is possible to be creative on demand, and to demand creativity in your startup. In fact, if you don’t, your startup will too quickly join the ranks of the corporate world that you love to hate. Think about that one.

Marty Zwilling

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Monday, January 9, 2023

7 Tips On Written Communications To Startup Investors

writing_pen_manEven in this age of videos and text messages, the quickest way to kill your startup dream with investors, business partners, or even customers, is embarrassingly poor writing. Being very visible in the startup community, I still get an amazing number of badly written emails, rambling executive summaries, and business plans with one paragraph per chapter.

In the competitive realm of business, you only get one chance to make a great first impression. You have to be able to communicate effectively in all the common forms, including business writing, as well as talking, presenting, and producing videos. Lack of the requisite skills or discipline will get you branded as a poor business risk before the message is even considered.

Business writing is not a skill that anyone is born with, but one that everyone can learn. Since we all lose when an entrepreneur with a great idea is held back by a failure to communicate, I would like to offer a quick summary of business writing basic strategies. Keep these in mind as you look for others to join you in supporting your idea to change the world:

  1. Get to the point in the first sentence. In this age of data overload, everyone has learned to tune out if they can’t quickly decipher a relevant purpose and focus for your message. That context needs to be set before your sales pitch or background story makes any sense. Before you start, make sure you understand your own objective.
  1. Plan the message flow to a logical conclusion. Random thoughts or lists of facts do not constitute effective business writing. Most commonly, your message is informational or meant to persuade, so every element should be consistent with that intent. Always include the key document elements of an opening, main body, and a conclusion.
  1. Key points should be highlighted and positive. Action items should be underlined, or separated into bullets to provide visual recognition in a quick scan. Positive messages have more impact, so keep negative and emotional statements to a minimum. Avoid flowery language and excessive use of adjectives. Tight wording clarifies the message.
  1. End with a clear call to action. If you are looking for an investor, a partner, or a customer, make sure the next step is clearly stated, and not just implied. Contact information should always be included. Ending with “May I ask for an hour on your schedule next week to discuss details?” is better than “Don’t miss this opportunity.”
  1. Talk uniquely to each recipient. Generic messages aimed at groups of people do not make a good first impression, especially if the greeting is non-specific and email is directed to a long list of addresses. Smart business people tailor their conversations to each recipient, and the same consideration should be applied to written messages.
  1. Use professional formatting. A badly formatted document, in all caps, mixed fonts, or all one paragraph will destroy even the best message. If you are asking for a million dollars, don’t send your message in smartphone or texting shorthand, ignoring spelling errors. Show your recipients professional respect, and you will get respect in return.
  1. Keep your writing voice friendly and courteous. If your writing tone is angry, cynical, or arrogant, don’t expect any reader to be open to what you have to say. Tune your use of language to the reading level of the recipient or below. Trying to impress or intimidate the reader with technical terms or acronyms doesn’t work with confident professionals.

As a general rule, text messages or emails from a smartphone should never be used for business purposes with someone you don’t know well. Emails are acceptable, if kept to one page, with minimal attachments, addressed to a single recipient, with a relevant subject line, and professionally formatted.

If the business criticality is high, or the subject is sensitive or easily misinterpreted, skip the written communication entirely, in favor of a phone discussion or a personal meeting. Written communication can never convey emotions and body language effectively, which may be fifty percent or more of the message.

Every entrepreneur needs to remember that they are selling themselves in every written communication, even more than they are selling their idea or funding request. Poor use of the writing technology generally available, including formatting tools and spell checkers, will be read as an inconsiderate or risky partnership. You can’t afford that competitive disadvantage.

Martin Zwilling

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Sunday, January 8, 2023

6 Due Diligence Concerns Before Outside Contracting

outsourcing-call-centerIf you have a software development background like mine, I’m sure you often get questions about when to outsource, versus building the solution in-house. The same applies to manufacturing and almost any process these days. Outsourcing is defined as contracting the work to another company, usually located in a developing country, like India, China, or Eastern Europe.

This alternative has been around for several decades, with the generally accepted advantage of reducing costs. Recently, I’ve seen a lot of discussion about bringing the work back home, since costs have gone up in less-developed countries, there are issues with intellectual property, and time zone and language differences make management difficult.

In reality, the considerations haven’t changed all that much over the years, and are worth repeating for those of you who haven’t previously faced this decision. So before you decide to move your manufacturing, software development, or call center out of town, make sure you understand the following considerations:

  1. Don’t give someone else control of your competitive advantage. If your software or your manufacturing process is your “secret sauce,” you need to keep the work in-house. Saving cost won’t help you if you can’t make the daily innovations required to stay competitive. Let someone else do the ancillary processes where you have no economies of scale, like accounting and support.
  1. Keep intellectual property keys in-house. Despite some recent advances, there are still some cultures which have less regard for patents and other intellectual property. For example, it is no secret that software pirating is still very common in China, Vietnam, and other cultures. Don’t count on contracts and non-disclosure agreements to save you.
  1. Don’t let leading edge become bleeding edge. Leading edge technology software and manufacturing require constant course corrections and iterative restarts. These can’t happen with outsourcing, without long time delays and excessive rework. Results on commodities, including mature software maintenance, adapt well to low-cost contracting.
  1. Factor in all the cost elements. It’s easy to find companies in certain countries that will quote cost reductions up to 75 percent. Your challenge is to factor in the right additional costs for these deals including contract negotiation, increased project management, and extensive travel. Apparent cost reductions can quickly evaporate into increased costs.
  1. Look at internal services versus external services. Customer-facing services, like call centers, should rarely be outsourced. You can’t isolate your customers from language idiosyncrasies and culture issues, per reduced customer engagement highlighted a while back by the The Globe and Mail. Internal services, like marketing and accounting, are more manageable and have less customer visibility.
  1. Focus on operational processes, rather than innovative new ones. It’s hard to write a detailed specification on an evolving new service, process, or product that embodies your core competency. Don’t expect a contract company, either offshore, onshore, or near-shore, to implement a vision that is still in your head. You need to capture the learning in your own team from the evolution.

In any case, before you select a specific outsourcing or contract alternative, there is no substitute for doing thorough due diligence. Visit the contract location, investigate their skill level, training, and quality of their facilities. Spend time building relationships, ask for referrals, and follow up. Make sure the chemistry, values, and culture of the owners is compatible with yours.

After the contract is signed, make sure that both you and they have strong project management skills in place to prevent scope creep, incomplete specifications, and lack of acceptance criteria. If you are a typical startup operation, consisting of an unpaid founder and co-founder, both working part-time, outsourcing is not likely the solution to your resource constraints.

Overall, I believe the utility for outsourcing is going up, rather than going away. The world is becoming a smaller place, and more homogeneous. Startups are often distributed entities, so adding and managing freelancers, contractors, and outsourcing firms is not a big step. But customers are not looking yet another homogeneous product or service, so be careful.

Marty Zwilling

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Saturday, January 7, 2023

6 Mistakes Often Made By Entrepreneurs Due To Passion

frustrated-entreprenaur-failureAs an entrepreneur mentor and startup investor, I see with sadness the 50 to 90 percent that fail. If you ask them for a reason, most will insist that they couldn’t get funding, or they ran out of money too early. But I’m not convinced that it’s as simple as that. Many are just not facing the reality that their passion had a critical business flaw.

As I was contemplating a classic book “Dead Companies Walking,” by Scott Fearon, who runs a hedge fund that profits from businesses headed toward bankruptcy, I realized that his insights on the common ways that mature companies often doom themselves apply equally well to startups. Every business, young or old, needs to avoid the following six mistakes that he outlines:

  1. Anticipating success based on the recent past. This fallacy, often called historical myopia, essentially involves extrapolating only from recent positive events, and ignoring the reality that markets saturate or evaporate. With the success of Facebook and Twitter, I still see new social media startups almost every day, with most destined to fail.
  1. Relying on an old formula for success. The fallacy of formulas that “can’t fail,” and holding on to troubled ventures, is alive and well in startups. It’s tempting to believe that one more new platform will win for crowd funding or video games, like Indiegogo and Wii. Actually, great new customer solutions lead to great platforms, not the other way around.
  1. Extrapolating you as the target customer. Never mix up what you like with what your customers will buy. Just because you would have loved to have your groceries picked out and delivered, doesn’t mean the mainstream customer was ready for Webvan in 1999. Or ask PlanetRx, an online service for prescriptions, before the Internet was pervasive.
  1. Falling victim to a magical mania or bubble. Perhaps the most famous bubble for startups was the dot.com craze that crashed 20 years ago, where the highest valuations were given to companies with massive user growth, but minimal revenue or profit. This one may be back, and due for another crash. See point #1 or watch history repeat.
  1. Failing to adapt to tectonic shifts in the market. Blockbuster failed to recognize that their industry had fundamentally and permanently changed, and even NetFlix has struggles with the same issue, as video streaming takes over. Things happen fast these days, so don’t get caught re-arranging deck chairs on the Titanic. Fail fast and pivot.
  1. Physically or emotionally moving yourself above the business. More than one smart entrepreneur has been caught in the lofty lifestyle of big money investors, viral growth, and movie star status. Startups can go down many times faster than they go up. Just ask MySpace, eToys, and Pets.com. Never take your eye off the ball in business.

Of course, there are many other common reasons for startup failure, including inexperienced teams, inadequate marketing, no intellectual property, business model doesn’t work, or just giving up too early. Every startup is a step into the unknown, making it a higher risk of failure, so there is no room for complacency or assumption.

In reality, failure is not a bad thing. In a healthy economy, capital markets and discriminating customers fuel growth and new ventures by handsomely rewarding well-executed ideas, and ruthlessly starving out even long-running ventures that refuse to adapt and innovate. A smart entrepreneur learns to embrace failure as a badge of learning that provides a competitive edge.

The lesson here is that even the most promising startups and experienced teams can be misled by sticking with business models that worked in the past, and market opportunities that may no longer exist. While there should be no stigma for failure, there is no joy in being a dead business walking. The quicker you heed these messages, the sooner you will be able to enjoy and celebrate the entrepreneur lifestyle.

Marty Zwilling

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Friday, January 6, 2023

6 Startup Challenges That Can Be Mitigated With Focus

focused-entrepreneur-startupMany passionate entrepreneurs fight to add more features into their new products and services, assuming that more function will make the solution more appealing to more customers. In reality, more features will more likely make the product confusing and less usable to all. Focus is the art of limiting your scope to the key function that really matters for the majority of customers.

YouTube did it with videos, Instagram did it with photos, and Amazon did it with books. Many of the business plans I have seen as an investor, like trying to integrate all the social media features of Facebook, Twitter, and LinkedIn into a new platform, don’t do it. Of course, once you have a brand and more resources, it can pay to expand your book selling to a full e-commerce site.

In fact, there are a host of reasons why a non-focused startup business is more likely to struggle for survival, lose market and investor attention, and miss out on the opportunity to capitalize on their scope:

  1. Time to market is tied to the size of your offering. In many business domains today, the market seems to change about every ninety days. With the current low cost of entry, nimble competitors appear quickly and seize the high ground of your existing customers and potential. No startup can implement a broad strategy quickly enough to stay ahead.
  1. Broad product offerings require too much infrastructure. More money is hard to find, and building efficient multiple processes is even harder. Every aspect of every product requires development, testing, manufacturing, marketing, and distribution. The probability of failure goes up exponentially as the number of product features increase.
  1. It’s tough for an elephant to be agile. Every successful startup I know has pivoted a couple of times, as they learn what really works in the marketplace and in the sales process. Did you know that both YouTube and Facebook started out to be dating sites? Even IBM, with their personal computer, had trouble making their elephant dance.
  1. Ongoing market leadership requires continuous innovation. The initial larger cost in time and dollars is only the beginning. The first-to-market advantage doesn’t last long. You need continuous innovation in all elements of your product line to stay ahead, or your startup will be quickly left in the dust.
  1. Marketing a product with too many features is self-defeating. It’s almost impossible to craft a memorable message that has more than three bullets. The more you try to capitalize on the breadth and depth of your solution, the more people don’t get the message at all, and settle for a competitor that focuses on their personal hot-button.
  1. Your personal bandwidth is quickly exceeded. When your solution has too many elements, even you can’t keep the priorities straight, and your team gets frustrated, tired, loses motivation, and tends to not do anything well. As a new entrepreneur in a new startup, it’s better to walk before you try to run.

At the same time, focusing on the wrong things is equally destructive and unproductive. In some environments product focus is not the most important element. Perhaps the focus should be on a single distribution channel, better customer service, or a simplified pricing structure. In all cases, hiring the best people is likely more important than adding a few features to your solution.

Thus the first and top focus for every entrepreneur should be on strategy. The strategy needs to be simple, written down, and communicated regularly to the entire team. A simple test is to see if you can quickly name your top three priorities, and if every team member is able to respond quickly with the same three. Too many strategy elements generate lots of work, but few results.

The final focus should be on emphasizing strengths and measuring success, rather than on solving the crisis of the moment and eliminating weaknesses. Only by focusing on the right elements of market, product, business, and people, can you really hope to win. Bigger is not necessarily better. Be the best in your chosen niche and you can change the world.

Marty Zwilling

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8 Tips For Success In Turning A Dream Into A Business

dream-into-a-businessAs an advisor to business professionals and entrepreneurs, I often hear about an innovative new solution that could lead to business growth or a new business. Unfortunately, in my experience, it takes much more than an innovative idea to launch a successful business today. Some of the additional elements are critical and often overlooked in your passion to move ahead quickly.

For example, a while back a passionate entrepreneur approached me with an innovative solution for reducing world hunger, but hadn’t focused on the fact that hungry people often don’t have any money, and governments are not easy customers. It was no surprise to me that all the investors he approached were less than excited about his plan for growing a new and nutritious algae.

Over time, I have collected a list of new business attributes that go beyond the initial idea or solution, which often are more critical to long-term success and satisfaction. Here are some key ones that I find often overlooked in the passion of the moment or the rush to get started:

  1. Aim your innovations at real customer problems. Solutions and inventions alone do not make a business. Find market evidence of customers with means who are willing to pay for a solution. In fact, I recommend that you search for the problem first, rather than creating a solution looking for a problem. Be customer focused, not technology focused.

  2. You are just as important as your innovative idea. It takes just the right person to implement an idea, no matter how great. You can be that person, if you demonstrate and practice commitment, determination, a real plan, and show that you never give up. As an investor, I want to hear about you, what you have done, and why this is important to you.

  3. Assemble the resources needed for the business. A single innovator can envision or even build an innovative prototype, but it takes a team to build the solution into a business. Even adding money won’t do it – you need to create a committed and engaged team and partners for marketing and sales, as well as production and distribution.

  4. Choose a business model that will win in the market. You need a business model that provides a good return for you and your team, long-term growth, value to your customer, and differentiates you from competitors. Selling below cost doesn’t do it, nor does giving it away free, and hoping to make it up in volume. Pay attention to the market.

  5. Focus on the infrastructure needed for your innovation. New ventures with major innovations, called “disruptive” solutions, such as the advent of electric vehicles, require changes in support technologies, more marketing for customer education, and new government policies. Elon Musk mitigated this by making his battery patents free to all.

  6. Commit to a higher purpose than just financial success. I find that today’s customers respond with greater passion and loyalty to businesses that profess visible support to a higher cause, such as reducing world poverty, or saving the environment. Find a higher purpose in your dream that matches your values, and could benefit from your strengths.

  7. Beware of the allure and demands of early adopters. Customers who are early adopters love new things, and they always want more features and options. This is a small segment, and can lead you keep spending, and turn off the mainstream customers. Segment your market carefully, and don’t get mislead, only to fail by early adopters.

  8. Don’t be afraid to pivot as you learn from the market. Successful entrepreneurs are always analyzing market feedback, remain agile, and are quick to make corrections or change course if things aren’t working. They recover quickly after a failure, learn from mistakes, and never give up. Many startups I know fail by simply giving up too soon.

    A legendary pivot example in social media was the transformation of Odeo into Twitter. Odeo began as a network where people could find podcasts, but iTunes began taking over the podcast niche. The company decided to make a pivot and run with the idea of a status-updating micro-blogging platform.

While the cost of starting a new business continues to go down, the market challenges have actually increased, due to world-wide accessibility of the Internet and instant communication accelerating the pace of change and technology. For your own satisfaction, and the thrill of success, it pays to think more broadly about your innovation before jumping in with both feet.

Marty Zwilling

*** First published on Inc.com on 12/22/2022 ***

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Wednesday, January 4, 2023

10 Reasons To Market Globally While Selling Locally

marketing-global-localThe world of marketing is changing faster than technology these days. Winning entrepreneurs have long since supplemented conventional print and video “push” marketing with digital online interactive “pull” marketing, and a while back added social-local-mobile (SoLoMo) to the mix. Mobile and global are driving all of these in innovative new ways to grow your business.

For all those entrepreneurs and startups who can’t yet afford a new age marketing agency, it’s impossible to keep up with “best of breed” marketing activities and strategies. I found some help in catching up via a classic book “Sell Local, Think Global,” by marketing message expert Olga Mizrahi. Along with her insights, she offers 50 innovative new tips to grow your business.

I’ve paraphrased here a subset of her guidance which I believe characterizes the key changes and the implications for entrepreneurs just starting, as well as more mature businesses:

  1. Pinpoint your Unique Value Proposition (UVP). These days it is often more about being unique than being valuable. A UVP sells a product or service because it differentiates it from other products or services that are available. Skip the better, faster, or stronger; you need to be the best, fastest, or strongest to truly stand out.
  1. Reach your target audience intimately through interaction. Target marketing has moved to a whole new level both geographically and demographically. With social media, you can interact more precisely and create custom products and marketing to be almost all things to all people. The broad-brush push-marketing is no longer competitive.
  1. Build word-of-mouth into your product or service. The very best marketing is word-of-mouth from your very happy customers. You need to give them something to talk about and incentives to be brand ambassadors. These include an aura of exclusivity and cultivating an “under-the-radar” vibe that pushes people into one-up-style revelations.

  1. Proactively seek out win-win alliances. Voluntary open-ended alliances are more important than ever, and easier than ever. Consider collaborating via shared marketing efforts, trade-show both space, co-branding promotional products, referral agreements, and cross-linking web sites. With informality, these must be win-win relationships.

  1. Modernize the user website experience. The standards for user-friendly continue to move up. Make sure your users don’t have to think, and participating in your call to action is intuitive and organic. Modern web layouts flow smoothly and quickly for an easier to read, satisfying experience. How many website visits have you aborted in frustration?
  1. Incorporate live chat into every online service. No one wants to call an 800-help-line anymore. Online shoppers like online chat, because it makes the experience more like in-store shopping. The same applies to other aspects of consumer experience: customer questions answered, problems fixed, and aggravations soothed, to close more sales.
  1. Understand the power of online reviews to your advantage. Stop fearing bad reviews, and see any review as an opportunity and an asset. Respond to reviews to give a personable picture of you, your company, and your products. People want to go with tried-and-true choices, and many positive reviews will offset that occasional negative one.

  1. Optimize how you website looks on mobile devices. Mobile will soon be the number one way people do web browsing, as it already is for e-mail. Yet nearly half of all small businesses still lack any website, much less a mobile-friendly one. Modern websites adapt to the mobile environment, or you can provide a separate mobile site at low cost.
  1. See the world through the eyes of Generation Z. The newest generation has never lived life unplugged, and their blend of innocence, simplicity, and pure excitement appeals to every customer. Optimize for them, and you will be a winner today, as well as in the future. It starts with a willingness to engage, listen, and learn without fear.
  1. Embrace giving back to the world community. Bring new awareness to your business by promoting a higher goal, which will garner additional respect and new business from your supporters. The first steps are effective communication to your clients, employee participation, and partnering with other organizations that have similar initiatives.

If you are not happy with how fast your business is growing, pick one of these areas to focus on first, then a second and third. Don’t try to do everything at once, and don’t expect that you can do it once and forget about it. Your business is a living entity, just like you are. Treat it with ongoing respect and attention, or the growth you expect and deserve will fade as the world changes.

Marty Zwilling

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