Saturday, March 23, 2019

7 Guidelines For Picking Business Battles You Can Win

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

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

On the other extreme, constant and unmanaged conflict will quickly drive your startup to be dysfunctional. Here are a few simple principles leading to constructive conflict resolution that I espouse, as summarized from the classic book by Peter T. Coleman, “The Five Percent: Finding Solutions to Seemingly Impossible Conflicts:”
  1. Know what type of conflict you are in. The first step is to assess whether the conflict is win-lose, win-win, or mixed (some competing and some shared goals). Each of the three types requires different strategies and tactics. Learning how to identify and respond to each type is central to success. Try a good business mentor to get you on the right track.

  2. Not all conflicts are bad. Most often, conflicts present us with opportunities to solve problems and bring about necessary changes, to learn more about ourselves and the business, and to innovate – to go beyond what we already know and do. Avoid the ones that are irrelevant to your startup, but don’t hesitate to engage in the others.

  3. Whenever possible, cooperate. Research has consistently shown that more collaborative approaches to resolving win-win or mixed-motive disputes (the majority of conflicts) work best. Therefore you should always approach conflicts with others as mutually shared problems to be solved together.

  4. Be flexible. Try to distinguish your position in a conflict (“I need a raise”) from your underlying needs and interests in the relationship (“I want more respect for my contribution”). Your initial position may severely limit your options. Creativity and openness to exploration are essential to constructive solutions.

  5. Do not personalize. Try to keep the problem separate from the person when in conflict (do not make them the problem). When conflicts become personal, the rules change, the stakes get higher, emotions spike, and the conflict can quickly become unmanageable.

  6. Meet face-to-face and listen carefully. Meet in a neutral location, and work hard to listen to the other side in a conflict. Accurate information is critical, and careful listening communicates respect. This alone will move the conflict in a more friendly and constructive direction. Don’t mistake sending text messages and emails as listening.

  7. Be fair, firm, and friendly. Research shows that the process of how conflicts are handled in usually more important than the outcomes of conflicts. Always attempt to be reasonable, respectful and persistent, but do not cave in. Find a way to make sure your needs are met.
Applied correctly, these methods can move most business conflicts in a positive and satisfying direction. But Coleman asserts that there are five percent that will always be “intractable.” These usually involve issues that won’t ever be resolved in the workplace, and should be avoided, like politics, religion, personal enmity, and cultural biases. Your best bet on these is not to engage.

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

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

Marty Zwilling
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Friday, March 22, 2019

Artificial Intelligence Can Help Or Hurt Any Business

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Everyone has heard about the big potential for using artificial intelligence (AI) to expand your business, but many of the small businesses I mentor are still wary of embracing it, because they don’t understand how it works, and fear losing control and unintended consequences. My advice is that AI is here, so it behooves all of us to learn how to use it properly and move forward.

For example, it is a no-brainer to first take advantage of the wave of new capabilities for data collection and smarter analysis to improve productivity and marketing. What is not so obvious is how to create and roll out solutions that can directly impact customer trust or financial well-being. There have been too many recent glitches, such as evidence of devices invading our privacy.

To put this all in perspective, I was happy to see the guidance and recommendations on how to deal with artificial intelligence correctly in a new book, “The Big Nine,” by Amy Webb. As a recognized futurist and thought leader in this space, she outlines how the big nine tech titans, including Google, Microsoft, and Alibaba, should be working to solve key long-term issues.

I believe her guidance and insight on these issues is equally important to every business owner and entrepreneur in understanding and marketing the principles of artificial intelligence to their business solutions and their customers, along the following lines:
  1. Don’t forget the social implications as well as business. AI assistants in homes are great (Google Assistant, Siri and Alexa) – but to children, they might easily be considered co-parents or teachers. Make sure you are comfortable that your offering which includes AI doesn’t go too far in molding human society into a non-human machine.

    For example, Facebook realized just before rollout that their new AI-based chatbots, Alice and Bob, had developed their own secret language and were talking to each other in a new shorthand, potentially misleading users. Alice and Bob were shut down immediately.

  2. Human employees and customers still need roles. While the disturbing visions of robots taking our jobs are almost certainly overblown, almost everyone sees no small amount of disruption ahead. Your role in business is to manage the transition where humans and machines will productively co-exist to keep human customers satisfied.

  3. Honor fundamental rights to personal security and privacy. As AI technology shapes how your customers access information, interact with devices, and share personal information, you will still be held responsible for protecting their data and privacy. This doesn’t require any great technical acumen, just vigilant attention to values and rights.

    It is already possible to collect digital breadcrumbs on team members or customers and use them to determine if online behaviors signal an intent to complete a desired action. The wrong use of these actions will put them, as well as your business, in jeopardy.

  4. The value of a human life cannot be compromised. Artificial intelligence systems from IBM Watson and BioMind have already made great strides in diagnosing and treating life-threatening cancers. But early mistakes have made it abundantly clear that they are not perfect, and decisions that are critical to saving lives can never have too much scrutiny.

  5. We live in a non-homogeneous world. We must make sure that our business behavior is always inclusive. AI without oversight can take phenomena for granted, or fail to see that what works in one social domain, culture, or gender may not work in another.

    As a current example, Tessa Lau, a computer scientist and cofounder of robotics company Savioke, says she frequently sees designs that neglect to take into account the perspectives of women and other minority groups.

  6. Individual biases must be excluded. We all have unconscious (and conscious) biases that can be inadvertently built into artificial intelligence solutions and their usage, based on our race, gender, appearance, age, wealth and much more. The result will be a lack of trust in your solution, and lost opportunity for both your business and your customers.
As a business professional or executive, whether you feel qualified or not, you are in the forefront of the artificial intelligence revolution that will soon change every business and every customer. The decisions you make now, even the seemingly small ones, may be critical in avoiding AI unintentional consequences and even assuring the long-term survival of our human species.

Marty Zwilling

*** First published on Inc.com on 03/07/2019 ***
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Wednesday, March 20, 2019

9 Simple Approaches To Creating A Sure-Fire Startup

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

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

You will find specifics in the classic book, “The Entrepreneur’s Playbook,” by Leonard C. Green, which supports my view, and is full of practical advice for aspiring entrepreneurs, including easy ways to identify sure-bet opportunities, most not requiring any invention, before you finalize your innovative business idea. Here are some approaches that both of us recommend to get you started:
  1. Take a basic product and make it special (upgrade). Premium bottled water (Fuji), expensive coffee (Starbucks), and gourmet cookies (Mrs. Fields) are examples of what were once pedestrian products that have driven successful new businesses. Sometimes you need to take a commonplace item, like a cup of coffee, and make it an “experience.”

  2. Offer a no-frills version of a high-end product (downgrade). For example, Southwest Airlines eliminated all the frills that usually come with an airline ticket, and now they are a market leader, being copied by the majors. In supermarkets, everyone today knows that generic brands often offer more value and quantity, without giving up key ingredients.

  3. Find products that seem to fit together (bundle). Instead of requiring people to shop and pay for related items, combine them into one package. Today’s smartphones are more attractive than a separate phone, camera, computer, and software packages. Sometimes just including training and installation makes a product more attractive.

  4. Break existing bundles into separate packages (unbundle). This is obviously the inverse of the bundle approach. Home computers have long been offered in unbundled as well as bundled hardware and software, to allow for a lower entry cost and flexible configuring versus simplicity. Long-term warranties are now unbundled from appliances.

  5. If a product sells in one area, transport it to another. Importers/exporters make their living this way with products from different parts of the country or the world. The same concept resulted in the birth of franchises, which are essentially proven business models transported to new locations. The Internet is a business for transporting web services.

  6. Expand a narrow product offering to the mass-market. A popular incarnation of this approach today is to take an Internet-only product into brick-and-mortar retail for access to a much larger audience. The same concept applied to every startup which test-markets its product in a local area, then scales the business for national or global access.

  7. Take a broad-appeal product into a niche. With the widespread popularity of social media, I now see many businesses looking at niche market interest groups, such as sites for travelers, hunters, cancer support, and crafts. In television, this is called narrow-casting, to gear specific channels to a special audience, like golf, old shows, or history.

  8. Maximize the selection of products offered (think big). This approach brought us the “big box” stores, including Walmart, Lowe’s, and Home Depot. Online, the same concept has been implemented by Amazon and Alibaba. It allows customers to complete their shopping in one place, and businesses get the value of volume and common processes.

  9. Focus on in-depth expertise and support (think small). This is the inverse of the “think big” strategy, which you see at your local hardware stores, with knowledgeable and friendly support staffs. They specialize in the depth of their selections that a true connoisseur demands. Online sites now advertise customized designs and personal fits.
It shouldn’t be hard to see from these examples the wealth of business opportunities available without inventing a totally new product or technology. Thus I continue to tell entrepreneurs that business success is more about the execution, and the quality of the team, rather than the idea.

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

Marty Zwilling
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Monday, March 18, 2019

5 Keys To Relying On Intuition In Business Decisions

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With all the progress in analytical tools and big data available, many people feel there is no place in business today for intuition and gut instincts. As an advisor to entrepreneurs for many years, I strongly disagree, and still see the value of at least combining intuition with logical analysis, as we face customers and markets driven by relationships, emotions, and unpredictable social trends.

I also see many successful entrepreneurs, including Richard Branson, who openly state, “I rely far more on gut instinct than researching huge amounts of statistics.” The venerable Steve Jobs was reportedly in the same category. In proper business circles, it’s called thinking outside the box, so don’t be misled into concluding that business no longer benefits from individual thinking.

In fact, I just saw a new book supporting this position, “Decisive Intuition,” by Rick Snyder, an international business coach who has launched and grown several businesses of his own, as well as helped big companies, including Intel and Anytime Fitness. He digs deeper into how intuition works, and concludes that correctly honing and using your gut instinct is a powerful tool.

We both agree that a big challenge we face in helping business professionals is getting you to stop being stymied by your own inner critic – that voice in your head that you are not good enough, or are probably doing something wrong. We all have to make friends with our inner critic, and make room for our intuitive voice to show up and lead us to the right decisions.

Here is my interpretation of Snyder’s recommendations to develop your intuition, and get you to that balance of logical analysis and intuitive decision making:
  1. Isolate your inner critic from the rest of you. Of course, we all have that inner critic element, as it’s important for our safety and security, but it need not overwhelm what we have learned about our business and our customers. Keep it in its place by avoiding the moods and emotions that can cause you to censor yourself on key decisions.

    For example, when you begin to feel overwhelmed by the stress of a heavy workload or crisis, it may be time take a long walk to think, or retire to your favorite gym for a workout to change your focus. Then your intuitive forces will help you reach a balanced decision.

  2. Use humor to loosen the grip of your internal critic. Self-critic messages are already so heavy that often bringing levity is valuable in helping balance it all out. For example, say “Oh, there’s my inner critic again!” or “Apparently, my inner critic thinks that I shouldn’t be the one to do the investment pitch,” as you smile at its attempt to thwart you.

  3. Ask your critic what it’s trying to protect you from. Think carefully about what’s at risk if you follow through with the behavior you are fearful of or are being warned about. Now you can logically isolate the current situation from past experiences, and how this decision can be made, from more recent learning, without repeating past actual risks.

    For example, you might find that the critic is trying to prevent the repeat of past pain where you trusted someone and later felt betrayed, or a time when you delegated work to someone else and you felt let down. Now you decide from confidence rather than fear.

  4. Work to be a better advocate for yourself. Once you are able to isolate the internal critic portion of your being, and better understand its cause and boundaries, you will be able to restore trust in yourself, repair your own reputation internally, and restore self-leadership. The better you understand it, the quicker the critic will disarm and relax.

  5. Practice new behaviors to wire new neural pathways. New modes of trusting yourself won’t happen by thinking alone. If your inner critic procrastinates, start working on that task right now. If you have been hesitant to delegate work, make a list of all your activities and publish a delegation list for all to see. Repetition increases skill and defeats the critic.
With these tips, I’m convinced that you can train yourself and get help from the people around you to integrate your directional, social, and informational intuition with results from all the logical analysis and data tools to make better decisions in business. Even though I’m a technologist, I believe the most competitive and most innovative businesses will always be run by people, not robots.

Marty Zwilling

*** First published on Inc.com on 03/04/2019 ***
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Sunday, March 17, 2019

5 Investor Types Who Will Test Your Negotiating Style

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

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

To be an effective negotiator, I agree that you first need to quickly identify and adapt to your opponents negotiating style. Feld and Mendelson identify the five most common negotiating styles that you will see on both sides of the table, and talk about how you can best work with each of them:
  1. The Bully (aka UAW negotiator). The bully negotiates by yelling and screaming, forcing issues, and threatening the other party. They usually don’t understand the issues, so they try to win by force. Unless this is your natural negotiating style, their advice is to chill out as your adversary gets hotter.

  2. The Nice Guy (aka used-car salesman). This style is pleasant, but you always feel like he’s trying to sell you something. While he doesn’t yell at you like the bully, it’s often frustrating to get a real answer (need to talk with the boss). For these, be clear and direct, and don’t be afraid to toss a little bully into the mix to move things forward.

  3. The Technocrat (aka pocket protector guy). This is the technical nerd who can put you into endless detail hell. The technocrat has a billion issues and has a hard time deciding what’s really important, since to him everything is important for some reason. Make sure you don’t lose your focus and fight for what you really care about.

  4. The Wimp (aka Marty McFly). You may be able to take his wallet pretty easily during the negotiation, but if you get too good a deal it will come back to haunt you. You have to live with him on the Board and making decisions. You may end up negotiating both sides of the deal, which is sometimes harder than having a real adversary.

  5. The Curmudgeon (aka Archie Bunker). With the curmudgeon, everything you negotiate sucks. He may not yell, but he’s never happy, and keeps reminding you how many times he has been around the block. If you are patient, upbeat, and tolerant, you’ll eventually get what you want, but don’t expect to ever please him.
Secondly, you should never walk into any negotiation blindly without a plan. Know the key things that you want, understand which items you are willing to concede, and know when you are willing to walk away. When determining your walk-away position, you need to understand your best alternative to agreement, and have a Plan-B (bootstrapping, competing investor, or more time).

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

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

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

Marty Zwilling
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Saturday, March 16, 2019

10 Key Principles To Drive Customer Decisions Today

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

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

Levitin outlines ten universal truths about selling, and the customer decision process, which every business needs to address in their product, business model, and their whole customer experience. Just think of your whole business as the sales engine, rather than just the sales reps:
  1. Success requires continuous learning and improvement. No matter how certain you are that your solution perfectly matches customer needs, you will be wrong. Success requires a willingness to take responsibility for shortcomings, better understand customer needs, and the ability to quickly learn and adapt. This is the growth equation for a startup.

  2. Emotions drive customer decision-making. Your ability as a business to uncover and capitalize on customers emotional motivators will dictate your success. That’s why Steve Jobs spent as much time on “insanely great design” as technology, and marketed to customer emotions. The lowest price is not always the real customer motivator.

  3. Every growth business must have a repeatable process. Just like good sales people have a repeatable process they follow, every startup has to overcome the chaos of a new business, put structure in place, document their processes, and focus on scaling up the engine. Everyone on the team must adopt the same culture and recipe for success.

  4. Resilience is the life skill of a business. Setbacks are inevitable, but good businesses and good sales people always bounce back. Both should assume that “no” never means “never.” A good entrepreneur actually gets stronger as he or she learns from each growth failure, and responds ever more effectively to customer needs and expectations.

  5. Business brand trust begins with customer empathy. Empathy is about being fully engaged with your customers, through interactive social media, and taking the time to listen to real customers face-to-face. You have to demonstrate common ground and shared values with your customers over the entire customer experience.

  6. Integrity matters in all aspects of a business. A business has to demonstrate integrity, reliability, and competency, just like a good sales team member. Integrity means doing what you say you’re going to do as a business, being responsive to changing needs, and making the right kind of promises to your target customer segment.

  7. Grow by helping customers rather than pushing a message. If you ask customers how you can help, you will uncover what matters most. This is more effective in directing their thinking and actions than selling technology. Well-crafted questions pull in customers. Good questions create change. Great questions can change the world.

  8. Emotional commitment precedes economic commitment. Don’t try to create a sense of urgency by appealing to greed. Your business and your team need to understand and demonstrate how your product connects precisely to what motivates your customer. These days, that includes a memorable total experience and testimonials from friends.

  9. Removing customer resistance takes persistence. All customers are prone to raising objections, because change is hard, there are many competitors, and decisions take time to make. As a new business trying to grow, you need to be able to isolate the toughest customer objections, and adapt your solution or business model to eliminate them.

  10. Looking for wrongs never makes you right. Every entrepreneur struggling with business growth has the urge to blame it on a lack of funding, an economic downturn, or unfair competitor. Instead, look for what has worked, and what you haven’t yet tried with your customers, to get it right. Focus on the real purpose that customers seek.
Businesses that think and act as a whole like their best sales people will build what their customers want and need, making everyone’s job a lot easier, and the customers a lot happier. That’s a recipe for business success that I recommend to every entrepreneur and professional.

Marty Zwilling
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Friday, March 15, 2019

5 Keys To Boosting The Performance Of A Business Team

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

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

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

  1. Build the team from people with a shared obsession. The most effective teams are built from people with a strong sense of values and commitment, starting at the top of the company. Team members need to view their work as a calling, much more than a job, and embrace a higher purpose that shapes their collective thinking and behavior.

  2. When selecting members, value fit over experience. Companies with the best teams seek out candidates with the right mix of personal motives, values, and temperament to be a true team player. Cultural fit matters more than job history or functional skills. Those that have these traits are incented to join, and those who don’t are often paid to leave.

  3. Incent them to focus and always look to the future. Extreme teams are tightly aligned around the company’s top few priorities, while remaining open to new ideas. For team members, the ongoing challenge is figuring out what not to do. These teams are motivated to develop approaches to creatively explore new opportunities for growth.

  4. Let them deal with people performance, as well as results. Teams today need a culture of being simultaneously tough in driving for measurable results, and direct in support of individuals who best create an environment of collaboration, trust, and loyalty. Teams must openly deal with their own weaknesses and take action on underperformers.

  5. Embrace healthy conflict to avoid the comfort of stagnation. Members push themselves and each other to speak up, question the status quo, take bold risks, and confront hard truths. They recognize the value of being uncomfortable as a way to push thinking outside the box, and as a wakeup call when something is not working.

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

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

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

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

Marty Zwilling

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