Wednesday, May 18, 2022

6 Success Mistakes Often Made By Serial Entrepreneurs

Degree-Vs-Dropout-Dilemma-Of-A-Young-EntrepreneurAs you know, growing a business is hard, especially the first time. Unfortunately, every new initiative is different, so don’t get too smug if you have had some success, and can’t wait to repeat it again. In my years as a business advisor, I have seen many of you crash and burn the second time around, despite the confidence. I advise working the next one as thoroughly as the first one.

Here are some key insights that I and others have collected for mature company leaders, as well as serial entrepreneurs. They often justify strategies in their own minds that lead to problems or even catastrophic failures that they never saw coming:

  1. Concluding recent positives are the new norm. Unfortunately, in this new age of rapid market change and harder-to-satisfy customers, you can’t assume that what worked yesterday will work tomorrow. New technologies and the power of the Internet can change things almost overnight, so do your homework from scratch on every initiative.

    For example, the e-commerce trend, driven by the Internet, has boosted many companies to success, but Covid and more recent customer demands for customization, easy returns, and instant delivery have made to model very difficult for many businesses.

  2. Believing you have a magic approach to growth. In my experience, there is no long-term magic in business. Innovative product and process solutions are only temporary, as they quickly become a commodity in the minds of customers and competitors. Yet, if you did it once, you can do it again, but don’t assume it will be easy, or just copying the past.

    In my experience, the secret is mostly hard work and passion. The successful business people I know typically work longer hours, cultivate more relationships, and create new initiatives more often than the rest of us. Take a lesson from Elon Musk and Steve Jobs.

  3. If you like it, so will all your potential customers. Maybe this worked for you the first time, but it is certainly a high-risk approach. As an angel investor, I expected startups to have a passion for their solution, but also to have done the market research and customer validation to size the real opportunity. You and your friends are not the market.

    In addition, these days you have to help your customers find you, through traditional marketing, more social media, and influencers. With today’s information overload, you can’t assume that people will know that you and your new innovative solution even exist.

  4. Capitalize on a continuing market demand trend. You all remember the seemingly limitless growth of social media and dating sites, so for many adding another one seemed like a sure-fire success. Yet I find that investors and customers are no longer interested in just another one. There is no substitute for new business model work and marketing.

    People are seeing the value and have a growing interest in renewable energy, artificial intelligence, and the use of blockchain technology for business. I’m seeing new business models for remote services, the sharing economy, and creating your own ecosystem.

  5. Overlooking the impact of global market forces. The current geopolitical tensions and the pandemic have and will continue to upset markets that were thought to be golden by many entrepreneurs and business owners. As you look ahead to your next business or growth initiative, I recommend that you take a hard look at your current winning strategy.

    In this age, because of world-wide communication, e-commerce, and quick delivery, every local business is really a part of the global market. Don’t assume that you can isolate your business and marketing to the local area, and continue to survive and thrive.

  6. Let your ego do the thinking based on prior success. Don’t let past success take your foot off the pedal of working hard, building relationships, and truly listening to your customers and other experts. Steve Jobs found that his early success at Apple didn’t guarantee him a job, but he came to back with some new thinking in the end.

The message here is that even the most successful business leaders seeking growth, as well as serial entrepreneurs, should never rest on their laurels. There is no substitute for doing your homework on current opportunities in the market, customer trends, and new technologies driving competitors. Stay on your current winning streak and continue to enjoy the entrepreneur lifestyle.

Marty Zwilling

*** First published on Inc.com on 5/4/2022 ***

0

Share/Bookmark

Monday, May 16, 2022

5 Ways To Expand Your Thinking For Your Next Startup

expand-your-thinkingWith all the upheaval and uncertainty these days, I find many entrepreneurs and business owners are reluctant to pursue new dreams, waiting for the world to stabilize and risks to go away. As a long-time business advisor, I see things just the opposite. Now is a time of great opportunity, with people knowing they have to adapt, and proven successes such as Elon Musk and Jeff Bezos.

Sometimes the hesitation I see is not just the qualms of starting and growing a business, but an actual inability to think big, chase dreams, or build a support community around you. To counter this hesitancy, I was inspired by a new book, “Make No Small Plans,” by entrepreneurs Elliott Bisnow, Jeff Rosenthal, Brett Leve, and Jeremy Schwartz.

They make a strong case, by virtue of their own experiences, that anyone can think big, and with the proper humility, thirst for knowledge, and a talented team, we all can accomplish the impossible. I will highlight here just a few of the many lessons that they mention, and I also recommend, to get you started down the path to the satisfaction and success you dream about:

  1. Make sure some crazy ideas are added to your list. No idea should go unspoken. You need to give yourself permission to think outside the box, and seriously consider a dream idea or two that your rational mind would rule out quickly. In addition to something you want, just make sure it’s something you can build, and many others may pay for it too.

    A popular and effective way to generate a range of ideas is brainstorming. Good brainstorming requires you to assemble a half-dozen of the right people who are not afraid to speak up and participate. Your challenge is to listen and keep it positive.

  2. Expect to have and acknowledge some failures. Don’t let the fear of failure keep you from taking risk and learning from your mistakes. That doesn’t mean trying the same thing over and over again, and expecting different outcomes. It does mean owning up to mistakes, pivoting, and really listening to customers, advisors, and industry experts.

    Take inspiration from Thomas Edison, who called every failure an “experiment” (now it would be a pivot). He made no excuses for 10,000 light filament failures and soberly responded: “I have just found 10,000 ways that won’t work.” He then succeeded.

  3. Capitalize on authenticity versus perfection. Trust in the real you, including imperfections, and move forward. Perfection in business is undefined and unattainable. Keep your focus on customers, who are never perfect, and build productive relationships. In these days of full communication through the Internet and social media, you can’t hide.

    Authentic leaders are forthcoming about both their strengths and weaknesses. Don’t be like the startup CEO I once worked for who always pretended to have all the answers, even when it was clear to everyone that his depth did not match his marketing passions.

  4. Find a partner to complement your weaknesses. We all have strengths and weaknesses, and too many of you spend your energy trying to fix a weakness, rather than leveraging a strength. Spend that energy instead finding and building relationships to balance that weakness with the strengths of others. One plus one can equal three.

    For example, I worked with Bill Gates and Steve Ballmer, who founded Microsoft and achieved success together. Bill was certainly the idea person and technologist, while Steve brought the business experience from Proctor & Gamble to close the equation.

  5. It’s not all about the idea – focus on the execution. The idea alone is not what’s valuable in business. The real value to you and the customer comes later, through hard work and execution. I learned long ago as an investor that the bridge from thinking and talking, to doing, is a long and difficult one for many to get over. Too many never make it.

    In my experience as an angel investor, I was never impressed when a startup founder claimed to be an “idea person.” Entrepreneurs often tout that “million dollar idea,” but I haven’t seen anyone pay that much for one yet. Focus on delivery results to show value.

I see many business owners who are linear thinkers, and they usually survive, but rarely boast of having achieved their dream, and often they don’t seem all that satisfied with their lifestyle choice. Maybe it’s time for you to take a hard look at your own progress and satisfaction in the business you are in. It’s never too late to starting thinking big, chasing your dreams, and having more fun.

Marty Zwilling

*** First published on Inc.com on 5/2/2022 ***

0

Share/Bookmark

Sunday, May 15, 2022

5 Phases Of Every Startup That Regulate Your Success

startup-stages-lead-to-successSuccessful startups seem to follow similar paths to greatness, and unfortunately all too often that path leads them back down the hill much faster than they went up. Big company powerhouses, like IBM and Xerox, took fifty years to make the cycle, but new companies today, in the age of the Internet, often make the cycle in five to ten years, or even less. Consider MySpace and Webvan.

Thus it behooves every entrepreneur to start watching these things more carefully from the very start. By definition, most startups begin as a result of some innovation in product, process, or service. The problem is that innovations in most business areas are coming so fast these days that yours can be overrun while still being scaled up across geographies and other products.

In other words, the challenge today is to build a culture of continuous innovation, as well as continuous scaling, and continuous consolidation, all concurrently. That’s a tall order, especially when your business culture has to fit into the myriad of international and local cultures that are part of every market these days.

In the classic book, “Fish Can’t See Water,” Kai Hammerich and Richard D. Lewis explore these cultural issues, both national and international, that can make or break your company strategy. Incidentally, I love that book title, which seems to me applicable to most aspects of business (and even people), as well as business culture.

To set the stage for all the cultural issues and timing, the authors start with a summary that I agree with of the five lifecycle phases every company is likely to experience over the long-term or short-term, regardless of culture:

  1. Innovation. This business phase is where every entrepreneur starts. It’s a volatile period for every company, where most struggle with getting commercial and technological traction, usually based on a single product or service. A particularly critical moment is when the founders hand over the leadership to a more managerial regime.
  1. Geographic expansion. This phase is characterized by rapid expansion either regionally or globally for growth (scaling up). This is where the culture of the startup has to adapt to the cultures of the markets served. A common practice is to hire local employees who know the geographic culture, even though this may well dilute the company culture.
  1. Product-line expansion. For additional growth, most companies expand the product portfolio to cater to more customers, and sell more to existing customers. The challenge during this phase is to stay innovative and agile. This usually marks the end of organic growth, as partnerships and alliances aid growth, but again dilute the focus on culture.
  1. Efficiency and scale. As the business matures, there is a natural drive towards more efficiency often through sheer scale and a desire for a stronger market share. Companies with an innovative and creative bias, which thrived during the innovation phase, usually struggle in this period. The emphasis is on global processes and tight execution.
  1. Consolidation. This is the end game for an industry, and many companies, characterized by mergers and acquisitions to a few dominant players. Value creation for major shareholders is frequently hampered by integration issues and culture clashes. The crises definitely hits here, if not earlier, and even the survivors can be dragged down.

In fact, crises can and do hit in any phase, due to poor execution, complacency from success, less competitive strategy, change of leadership, and many other reasons. It’s important to note that a company under crisis often will revert to its core national culture, which only further exacerbates the problem.

Thus it’s important to set your company culture early to be a global company, without a specific national bias, since the speed of change is so great. You need the global outlook, even though digitalization and Web 2.0 means you don’t have to have a physical presence in other countries to participate in the global market.

As companies grow in today’s high-speed Internet environment, with constant pivots and new products, they won’t even see the lifecycle phases flashing by, and in fact may be experiencing all of them concurrently. There is no time to be changing your culture to match the lifecycle. How hard are you working to avoid the “fish can’t see water” syndrome?

Marty Zwilling

0

Share/Bookmark

Saturday, May 14, 2022

8 Keys To Effective Delegation For All Perfectionists

women-business-laptop-officeFor a few, delegating comes easily, maybe too easy. For others who are perfectionists, letting go of even the most trivial task is almost impossible. If you are in this second category, you probably don’t like the references behind your back that you are a “control freak” or a “micro-manager.”

London business school professor John Hunt notes that only 30 percent of managers think they can delegate well, and of those, only one in three is considered a good delegator by his or her subordinates. This means only about one manager in ten really knows how to empower others.

The challenge is delegating the right things, and not delegating the wrong things. If you don’t get it right, you are busy, but working on the wrong things. Almost every entrepreneur needs to improve their skills in this area, so I did some research on the basics. Jan Yager, in her classic book “Work Less, Do More,” has outlined eight key steps to effective delegation which I endorse:

  1. Choose what tasks you are willing to delegate. You should be using your time on the most critical tasks for the business, and the tasks that only you can do. Delegate what you can’t do, and what doesn’t interest you. For example, non-computer types should consider delegating their social media, website, and SEO activities.

  1. Pick the best person to delegate to. Listen and observe. Learn the traits, values, and characteristics of those who will perform well when you delegate to them. That means give the work to people who deliver, not the people who are the least busy. This requires hiring people with the right skills, not the least expensive or friends and family.
  1. Trust those to whom you delegate. It always starts with trust. Along with trust, you also have to give the people to whom you delegate the chance to do a job their way. Of course the work must be done well, but your way or the highway is not the right way.
  1. Give clear assignments and instructions. The key is striking the right balance between explaining so much detail that the listener is insulted, and not explaining enough for someone to grasp what is expected. Think back to when you were learning, when you were a neophyte.
  1. Set a definite task completion date and a follow-up system. Establish a specific deadline at the beginning, with milestones. In this way you can check up on progress before the final deadline, without fuzzy questions like “How are you doing?”
  1. Give public and written credit. This is the simplest step, but one of the hardest for many people to learn. It will inspire loyalty, provide real satisfaction for work done, and become the basis for mentoring and performance reviews.
  1. Delegate responsibility and authority, not just the task. Managers who fail to delegate responsibility in addition to specific tasks eventually find themselves reporting to their subordinates and doing some of the work, rather than vice versa.
  1. Avoid reverse delegation. Some team members try to give a task back to the manager, if they don’t feel comfortable, or are attempting to dodge responsibility. Don't accept it except in extreme cases. In the long run, every team member needs to learn or leave.

Almost everyone who has grown their startup from a one-person entity to a going concern with many employees has struggled with letting go of any task. On the other hand, executives who come from a large company to a startup tend to delegate too much, resulting in high costs and lack of control.

Finally, every entrepreneur needs to set aside their fear of delegating. If you do it right, as outlined above, every task will likely be done better than you could do it. The only thing you can't delegate is “the buck stops here” role. That can only be done by the person in charge, and it better always be you.

Marty Zwilling

0

Share/Bookmark

Friday, May 13, 2022

10 Ways To Be An Entrepreneur Who Endures And Thrives

Entrepreneur-thrivesAs the economy rebuilds after some tough economic times, more and more people seem to be turning to entrepreneurship and their dream lifestyle as an alternative to traditional employment. I applaud this trend, but caution all of you thinking this direction to approach entrepreneurship with your eyes wide open. It is not for everyone, as the entrepreneur’s path is fraught with challenges.

Many experts have tried to clearly lay out the criteria for survival in a way that allows you to judge your own situation and your own temperament, and make a rational decision before starting down this path. I recommend the ten points in a classic book by Bill Murphy, Jr., titled “The Intelligent Entrepreneur,” outlining the keys to successful entrepreneurship, as follows:

  1. Make the commitment. Entrepreneurship can be learned. But you have to be committed to the process of building your own thing and the act of creating something, rather than just coming up with an idea. It will likely take several ideas, with the learning process of failing on a couple, before you can call yourself a successful entrepreneur.
  1. Find a problem, then solve it. Rather than finding a new idea first, try finding a problem first. Problem solvers make successful entrepreneurs. Idea people are dreamers, who often don’t enjoy the hard work of a solution in a specific timeframe to make money.
  1. Think big. Thing new. Think again. In other words, make sure your solution will scale up. Professional investors will tell you they look for business plans that can credibly project revenues of at least $20M within five years, or they won’t justify an investment.
  1. You can't do it alone. Have a support team of people you know and trust. An idea person and a problem solver make a great team. Successful entrepreneurs have to work well with people, whether they be partners, investors, employees, suppliers, or customers.
  1. You must do it alone. But the dichotomy is that there are things that you have to do alone. “The buck stops here.” You have to be decisive, accept responsibility, and provide the vision. Vision is not a group-think activity. Sometimes decisions have to be made quickly, and with very little hard data, so you need the confidence in your gut.
  1. Manage risk. Without risk, there can be no innovation. Not every idea can, or will, be a winner. Fear of failure will kill innovation, but reckless disregard for risk will kill a business. The successful entrepreneur is able to find the balance between these two extremes.
  1. Learn to lead. In a startup, the entrepreneur leader has to do two things. First, drive the business creation process, and secondly, inspire all the others. The others include the rest of the team, investors, and customers. That means hands-on leadership and effective communication.
  1. Learn to sell. Don’t believe the old myth that “if we build it, they will come.” Selling is a learned skill, and takes effort, just like building a product. Everyone in your startup, especially the entrepreneur, needs to understand sales, and needs to be a salesman.
  1. Persist, persevere, prevail. Experts say the prime cause of failure in business is quitting too soon. The successful entrepreneur never gives up, and uses creativity to overcome all obstacles, including personal, financial, and technical ones.
  1. Time, not money, is the key resource. Entrepreneurship is a lifestyle, not a job. Be prepared to play the game for life. There are no quick fixes, or quick get-rich solutions. Learn to manage and balance your time; it’s the one thing that belongs to you alone. Great entrepreneurs have a life outside of work, and find time to give back.

Reporter Bill Murphy compiled his book based on three real-life success stories of Harvard graduates, all of whom proved the points by their failures as well as successes. There is no magic here, but I believe these rules can shorten the learning curve and increase the success rate for every budding entrepreneur. They can also help you be happy and have some fun.

Marty Zwilling

0

Share/Bookmark

Wednesday, May 11, 2022

7 Metaphors That Every Aspiring Leader Should Emulate

men-suite-man-businessIn building successful businesses, I find that creating a new and innovative product or service is usually the easy part. The hard part is providing the leadership required to align and motivate all the constituents and players – from engineers, to investors, vendors, and ultimately customers. Great entrepreneurs are not just idea people and then managers, they are extraordinary leaders.

Most investors admit that they invest primarily in people, not ideas, and they inherently believe that they can sense this leadership ability needed to get the rapid growth and 10x return we all strive for. Yet beyond a list of noble attributes, like vision, courage, and integrity, it’s hard for them to define what separates an ordinary entrepreneur or manager from an extraordinary leader.

I saw a new approach in the classic book “Leadership Transformed: How Ordinary Managers Become Extraordinary Leaders,” by Dr. Peter Fuda, which identifies seven leadership themes, presented as metaphors. I believe these will really help anyone recognize great leaders, and even more importantly, accelerate their own entrepreneur leadership transformation:

  1. Demonstrates a burning ambition and a burning platform (fire metaphor). These are the forces that initiate and sustain transformation efforts. The top two on the personal side are “urgency” and “desire,” but these have to be matched on the business side with the willingness to burn the platform (change any aspect of the business) without a crisis.
  1. Sense of accountability and momentum (snowball metaphor). This means no excuses and no rationalization, sweeping team members into mutual accountability. The leader then builds momentum from small successes into a snowball that will grow into a large, powerful, and eventually unstoppable business. Have you addressed all sources of drag or friction on your snowball?
  1. Artfully applies tools, and strategies for change (master chef metaphor). New entrepreneurs are really amateur chefs learning to cook a new business. Existing business frameworks are the recipes, and great entrepreneurs creatively use new tools and strategies to hone these frameworks, just like a master chef.
  1. Works with other team members on mutual aspirations (coach metaphor). It is not about leaders becoming coaches; it’s about leaders letting themselves be coached by others – advisors, team members, and even customers. A team’s captain is dependent on the support of their teammates, requiring trust and respect from both parties, and humility on the part of the leader.
  1. Does not mask authentic self, values, and aspirations (mask metaphor). Too many entrepreneurs put on a mask to conceal personal imperfections, or they adopt an identity not aligned with their authentic self, values, and aspirations. This fa├žade is a burden soon recognized, so dropping the mask is more effective, as well as more comfortable and more fun.
  1. Enhance their self-awareness and edit their own performance (movie metaphor). Great entrepreneurs recognize that leadership is like a movie, and it can be honed and improved by disciplined reflection (see yourself as others see you), edited for impact, and directed by experts on your team. Reflect on how often you operate from judgment as opposed to perception. Think about who could help you reflect-on-action.
  1. Embed their personal journey within the business journey (Russian dolls metaphor). Business is really a set of journeys that interact with an entrepreneur’s personal journey. Up-line this may be your interaction with your Board, investors, and family. Down-line it’s the leadership model you use with your internal teams and external partners. Focus on improving your up-line and down-line dolls with your personal journey.

In addition, here are five strategies that Dr. Fuda and I both agree will lead to a more empowering approach to entrepreneur leadership, and help you optimize all the themes described above:

  • Shift your focus from your business content to market context.

  • Spend more time showing others what is required, rather than telling them.

  • Focus more on collaborating with others, rather than competing.

  • Evolve from guru to guide, and coaching others to find answers for themselves.

  • Move from critic to cheerleader, from what is going wrong to what is going right.

If you are an investor, you need to recognize and mentor entrepreneurs to extraordinary leadership. If you are a startup founder or executive, you need to strive continually to change yourself and your business to build and maintain the leadership you need to out-perform your competition, and generate the results to meet personal and financial objectives. How many of these themes and strategies are you practicing today?

Marty Zwilling

0

Share/Bookmark

Monday, May 9, 2022

8 Ways To Increase Worker Buy-In And Customer Service

engaged-business-team-customer-serviceMost businesses spend big money testing their brand logo, catchy marketing phrases, and demographics, but spend little time training and validating that their employees can and do deliver exceptional experiences to their customers. The result, according to an often-quoted Gallup survey, is 70 percent of workers not fully engaged, and poor customer experiences.

The customer experience is really your brand, since that is what customers remember and communicate to others, rather than your marketing. Thus the real challenge in building your brand is building the level of engagement and delivery of your team. Gregg Lederman, in his classic book, “ENGAGED!: Outbehave Your Competition to Create Customers for Life,” offers eight key principles for defining and managing the experience to keep it consistent and profitable:

  1. Keep every employee on stage, delivering an experience. At work, all team members (everyone who gets paid for doing a job at the company) are on stage responsible for delivering a branded experience to coworkers and customers. They have to out-behave and outperform your competition. Is your team performing like they are on Broadway?
  1. Keep your team happy to create engaged customers. An unhappy team member can’t create an engaged customer. Yet less than half of the people working today claim to be satisfied and happy at work. How many of your employees would say that what they think, what they say and what they do are in harmony? Money does not buy engagement.

  1. Don’t just announce your culture, make it visible. Your mission, values, brand positioning, and guiding principles are invisible, unless your employees know specifically how to act them out through their day-to-day behavior. You have to define these behaviors, measure them, and reward them. Walking the talk is the place to start.
  1. Focus on culture change rather than culture talk. Culture is changed by how we act (perform) and interact (employees and customers). Define and document a common mindset and make related behaviors non-negotiable. Everyone must know and do these things consistently. The secret to success is 1% training and 99% reminding.
  1. Turn common sense into common practice. The only true employee-driven measure of whether the workforce is “living the brand” is the perspective of others in each work area. Use a company-wide assessment at least twice a year to understand and remind the team to out-behave the competition. No more gamed employee satisfaction surveys.
  1. Build relationships and stop surveying customers. Every senior leader needs to have regular quality conversations with customers. These enable leaders to learn firsthand about how the company is living the brand and when it is not. Relationships will get referrals, drive more sales, and build loyalty. Use the feedback to improve and grow.
  1. Incent engagement with training and recognition, rather than rewards. Employees get much greater value from the power of recognition and much less from the actual rewards. Reward programs don’t drive sustainable culture change or business results. Provide recognition for the right behaviors consistently, and the results will accrue.
  1. Build trust in you as the leader by managing the experience. Without solid leadership people simply won’t follow. Earn trust by making the right experience a part of the day-to-day conversation, and reminding people by your actions what you expect. Demonstrate a culture of responsibility and accountability.

Lack of engagement is very expensive. According to Lederman, engaged organizations grew profits as much as three times faster than their competitors. Highly engaged organizations have been shown to reduce staff turnover by 87 percent, improve performance by 20 percent, and increase customer satisfaction by at least 12 percent.

Overall, successful startups and world-class companies are known to have fiercely loyal customers driven by fully-engaged team members, resulting in proactive referrals and more purchases. That’s the brand you want, and it needs minimal focus on the logo and advertising to survive and out-perform your competition. How would you rate your customer experience today?

Marty Zwilling

0

Share/Bookmark