Leading Blog




Leading Blog | Posts by Category



06.15.20

3 Startup Financing Myths You Should Avoid

3 Startup Financing Myths You Should Avoid

IF you are building a startup, you’ll find no shortage of people who are willing to give you advice, particularly when it comes to raising financing. Unfortunately, much of this advice is wrong.

Well not, wrong exactly.

Most startup advice, like most myths, have a kernel of truth to them, but you have to know when to apply it and when to skip it.

Here are three pieces of advice that are tossed around Silicon Valley as if they are gospel, but they are really Startup Myths.

Myth #1: Build a Billion Dollar Company

I don’t know exactly when it happened, but at some point, Silicon Valley became obsessed with the word billion. Some people blame it on Justin Timberlake (playing Sean Parker) in the movie The Social Network, who famously said that one million wasn’t cool, one billion was. I personally blame my MIT classmate Aileen Lee, formerly with Kleiner Perkins, who coined the term Unicorn, a private company valued at over a billion dollars.

Today the conventional wisdom is not to approach VC’s unless you can build the next Unicorn. To do that, you have to show how your market is big enough (a multi-billion dollar market) to support that kind of valuation.

The truth is, if you look at many of the traditional companies that went on to be worth over a billion dollars, it wasn’t at all clear when they started the company that they had a billion-dollar idea.

Going all the way back to Yahoo or Microsoft, the initial products (a directory for a nascent tech called the World Wide Web, and Microsoft BASIC,) didn’t look like billion-dollar products at all. The same is true of recent Unicorns like Facebook, Twitter, Slack, Discord, Minecraft and many others.

The real issue here is that if an entrepreneur comes in to a pitch and goes on and on about how they’re going to build a billion dollar company in just a few years, most investors eyes tend to glaze over. We’ve heard it all before.

So how do billion dollar companies get built? Like Jerry Yang who started Yahoo, as investors we are looking for entrepreneurs who are obsessed with a new technology. Like Mark Zuckerberg, who built a site only for college students, we are looking for a small, protected market that you as an entrepreneur, can dominate.

Like Markus Persson, who created Minecraft, who was just trying to build an idea that he could sell for $6.99 a game, we are looking for a product that ends up becoming wildly popular, more popular than anyone thought it could be in the early days.

The real key is to have an entrepreneur that is obsessed with a small market. Why does it need to be a small market? Because that’s what an entrepreneur with a small amount of money and a lot of talent can dominate. If, like Microsoft and Facebook, you can dominate your small market, you can then move on to other products or markets that are adjacent. Moreover, if the market grows and you are the leader, then you can find yourself at the helm of a billion dollar company.

Even when there is a large market, most successful entrepreneurs attack a small portion of it at the beginning. So, while everyone wants to get in on the next Unicorn, the way to get there is to make sure you have a product that meets the needs of a growing, but still very small, segment of a newly emerging startup market!

Myth #2: Talk to As Many Investors As You Can

For some entrepreneurs, raising financing can seem like a full time job, particularly in these trying times. Anyone who’s been through the process will tell you that you have to go through a lot of “No’s” before you to get to a “Yes.”

If talking to investors is turning out to be a full-time job, it’s possible that you are talking to too many investors or that you need to refine your pitch.

Gurinder Sangha, a securities lawyer who started Intelligize (sold to Lexis-Nexis), put it best when he said that you want to go after investors that are “in your tribe.”

Who is in your tribe? In the U.S., it’s often your alma matter. Sangha was a graduate of the University of Pennsylvania, and his first venture capital investor turned out to be an alumnus.

It doesn’t always have to be alumni. My first institutional financing came from people who were in the “MIT” network.

A few years ago, an entrepreneur was building an automated job matching site in Latin America. He would fly into Silicon Valley, meet with many investors, and having read that raising money was easy here, go away disappointed. In the end, the fund that led his series was a fund that focused on Latin America.

This might seem obvious, but it’s not. Many entrepreneurs waste time talking to investors who are at the wrong stage, sector, or tribe. When a VC’s website says they do “early stage” – to a VC that means a product has already been built and generating some revenue, while to an entrepreneur, it means “just an idea.”

When raising institutional financing, you are better off finding your tribe and focusing on investors who are more likely to invest in your particular market, stage or team. To do this, talk to less investors, not more.

Myth #3: Take the Highest Valuation You Can Get

Valuation is a touchy subject for most entrepreneurs. They seem to take it personally when an investor isn’t willing to negotiate on valuation.

At first glance, this doesn’t seem like a myth at all. Of course, you will take the higher valuation, because you’ll give up less of the company, right?

The problem is that most entrepreneurs don’t truly take the time to understand what’s in a valuation.

I used to think a valuation was kind of like the stock price of a public company. I got a $5 million valuation on my very first startup and thought I was a millionaire because I owned half the company.

I was wrong.

Setting aside the issues of valuation of common stock vs. preferred stock, what I really didn’t understand was that a valuation is a set of expectations. The expectations are about how quickly the company can grow and how big it can grow to justify the valuation.

While expectations in a private valuation are not as explicit as they are in public companies, they are still there.

I always caution entrepreneurs not to take too high a valuation in any round because it sets very high expectations for the next round. Unfortunately, most startups don’t meet their initial rosy projections.

What happens then? A down round, which can damage a company and make it difficult to raise money in the future.

Another model for valuation is the “high bar,” as shown in Figure 1.

Suppose I ask you to set the bar such that I will only invest in your next round if you make it over the bar? In some ways, this is what a valuation is.

Would you set it high or low? Of course, you want the bar to be set low rather than high, to guarantee that you’ll make it over. The investor might not want it to be too low in this case.

A valuation is basically a bar that you are expected to jump over. This is why experienced entrepreneurs can usually get a higher valuation from VCs than less experienced ones – because the VCs expect them to be able to build a company to a higher valuation more quickly.

Financing

Of course, there are other reasons not to always take the highest valuation. Strategic investors might be willing to give you a higher or lower valuation than VCs because they have different priorities, etc. The point is that the highest valuation isn’t always the best one to take.

These are just some of the many myths that are given as advice when entrepreneurs are trying to raise financing. If you follow advice blindly without understanding the underlying complexity, you are likely to get yourself and your startup into trouble.

* * *

Leading Forum
Rizwan Virk is the author of Startup Myths and Models: What You Won’t Learn in Business School. He is a successful entrepreneur, video game pioneer, and venture capitalist and founder of the startup accelerator Play Labs @ MIT. A graduate of MIT and Stanford, he is also the author of Zen Entrepreneurship: Walking the Path of the Career Warrior; Treasure Hunt: Follow Your Inner Clues to Find True Success); and The Simulation Hypothesis: An MIT Computer Scientist Shows Why AI, Quantum Physics, and Eastern Mystics All Agree We Are in a Video Game. For more information, please visit ZenEntrepreneur.com and follow the author on Twitter.

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *

 

Explore More

Pitching RemotelyDear Founder

Posted by Michael McKinney at 06:19 AM
| Comments (0) | Entrepreneurship

05.04.20

5 Tips for Pitching Investors Remotely in the Time of Coronavirus

Pitching Remotely

NOW that almost everyone is working from home, startup founders looking to raise money from investors will need to do so remotely. In fact, in-person pitches may now be a thing of the past.

As both an individual investor and venture capitalist, I’ve taken a lot of remote pitches since the shelter-in-place order started. My impression is that most entrepreneurs aren’t always putting their best foot forward.

Here are five seemingly contradictory tips to keep in mind while pitching remotely.

Tip #1: The Slides Aren’t the Pitch

The first tip will be relevant for both in-person and remote pitches but is doubly important when you are pitching remotely: the slide deck isn’t the pitch. The pitch is the story that you are telling.

So, what do I mean by the story? This is a sequential narrative that captures the main reasons why an investor might want to invest in you. It doesn’t matter how good your slides look; it matters how compelling your story is.

Just like story beats in a movie script, which is meant to evoke responses from the audience, a story in the context of pitching to investors should consist of certain beats that are meant to elicit their reaction.

Paradoxically, the better the story, the worse the slides can be. When I was an entrepreneur raising money, one of the most effective pitches was for the Tap Fish video game.

I only had simple black and white slides with text and no images. If that seems like it violates everything you’ve read and heard about putting together pitches—you are right! Our story was great, so the slides didn’t have to be.

Here is an outline of the basic story, along with the ER (expected reaction):

  1. Mobile gaming is new and taking off
      (ER: Nodding/agreement)
  2. We have a million daily active users
      (ER: Surprise and/or impressed)
  3. Our users love our games
      (ER: Nodding)
  4. We’re making quite a bit of profit
      (ER: Surprise, because most startups aren’t profitable so soon)
  5. Look how much money we’re going to make if we follow our plan
      (ER: Greed and excitement)

A few years later, I was raising a subsequent round for my next video game startup, Midverse Studios. By then, we had a more experienced team thanks to the success of Tap Fish. We had flashier games that were based on the TV shows Penny Dreadful and Grimm. We also had marquis investors, who put money into our seed round, and we had a more impressive set of slides.

Despite the flashy slides, we found it difficult to raise money. The fact of the matter was that the slides were better, but the underlying story wasn’t nearly as good. This was because the market for mobile games had become more competitive, making it difficult to acquire users cheaply. We also didn’t have nearly as many users, and we certainly weren’t even close to profitability. We needed a new story that would captivate users and investors.

The real takeaway from my experience is that before you assemble your slides, make sure to articulate your skeleton of a story that will evoke the desired response from investors.

Tip #2: Use Your Slides in the Remote Pitch

Now, this might sound contradictory to Tip #1, but going through some slides is even more important these days when pitching remotely than before the current health crisis.

In recent times, it seems the trend is that entrepreneurs will email me their slides before the call. But then, during the call, they completely ignore the slides. It’s as if they expected me to have memorized the slides for the call.

Instead of being able to focus on their message with the guidance of slides, I found myself rifling through the collection of slides to find the right one.

Out of my last five entrepreneurial pitches, all five had sent me the deck beforehand. Yet only one actually brought up the slides on the Zoom call and went through them with me. The rest just wanted me to look at them sitting on their desks at home, not wanting to “bore me” with the slides. This was a mistake.

Now I’m not saying you need to go through every single slide on a remote pitch. You can certainly economize and jump around. But the visuals are actually important when you are trying to make a point to an investor who is attempting to understand your story and has been listening to a multitude of pitches. For one thing, it’s harder for an investor to figure out what the heck your product actually does on a remote pitch.

I’m more likely to remember you if there is a catchy visual that illustrates an important point, as opposed to just telling me that point.

So, if you have a deck, bring up the slides while talking to investors on Zoom. Otherwise, they’ll just remember you as another face on a screen.

Tip #3: Don’t Spend Too Much Time on the Product

Traditionally, entrepreneurs love to talk about their product, but investors need to know about more than just the product - the market, the team, competitors, business model, etc.

Recently, I saw an entrepreneur’s deck that was 30 slides long, with 10 slides about the product (features, roadmaps, videos, and screenshots). This was too much. Try to keep your deck to 10-15 slides (with extras you can draw upon if necessary).

Some pitches have too little about the product, and some have way too much. The best pitches have “just enough” so that an investor can understand what their product offers and why it might be special.

One or two slides about your product are enough if you do it right. Then it’s time to move on to why it’s better than other solutions, followed by the business model and how you are going to make money.

Tip #4: Explain What Your Product Does

Some entrepreneurs go too far in the other direction and make it really hard for the investor to figure out what their product does clearly.

This has led to pitches that are “market heavy,” such as many slides of data about the market. To be honest, if I took your pitch, I am probably already interested in the market. So the market slides are somewhat important, but you don’t need more than 2 slides on the market, so don’t dwell on them.

For example, if your startup is in esports, you’ll have the obligatory slides talking about how many hundreds of millions of viewers of esports there are. However, as an investor, I probably already know this, or I wouldn’t have taken the pitch.

What I really need to know is your segment of the market, what your product is, and why it’s better or different than others.

If I had to pick the one thing that takes the most time in remote pitches, it is figuring out what the heck an entrepreneur’s product actually does! Many entrepreneurs get to 2/3 of the way through the slides and start talking about the business model and financial projections while I’m still wondering exactly what their product does and what makes it unique. Having a screenshot or two displayed while you explain your product helps tremendously.

So remember Goldilocks—having too little or too much on the product can both be big problems—you have to get it “just right.”

Seems obvious, right? You would think so.

Tip #5: Identify a Killer Slide Investors Will Remember and Repeat

I always tell entrepreneurs whether they are conscious of it or not, an investor leaves with a positioning in their mind about you and your company. This is how the investor will position your company to their partners (if they are a VC) or to other investors, or even to their spouse (if they are angel investors).

If you aren’t clear on what they positioning will be, it’s likely you aren’t clear on your story, which brings us right back to Tip #1.

The best positioning is usually the single strongest point that you have in your presentation. Typically, it is about your team, market opportunity, technology/product, or market results/ traction.

You can go through 15 slides, but in the end, there is one slide that will get an investor. I call it the killer slide.

If you are in a new market and don’t have anything to show yet, but have a team that has had real success before (by selling a company), or you are a team that worked together at Google, then the killer slide is the team slide.

These days it’s become fashionable for entrepreneurs to put the team slide at the very end of the presentation, which is great for Demo days. But if the team aspect is your biggest strength, then you need to be sure that you establish your credibility up front, so put that first. Because up until that slide, the investor is thinking: “Who are these yahoos, and why should I care about what they say?”

If your biggest strength is your technology or IP differentiation, you better have a simple visual, which makes it easy to understand while also hammering home your IP is so important. It’s important is that the investor remembers the “gist” of why your IP is so special after your conversation. Spend more time on this “killer slide” and hammer in the point.

Sometimes, the “big strength” is a product demo, which isn’t in the slides at all. I recently invested in a VR company whose founder told me that the way he sells investors is to get them to put on VR glasses and meet him “in world.” In this case, it is necessary to get people over the hurdle because the VR market is not as “hot” as it used to be when it was seen as the “next big thing.”

All investors have to justify their actions to someone else (partners, LPs, spouses, etc.). This is why it’s extremely important to not just convince an investor, but to arm them with a positioning they can take to others to justify their investment.

Conclusion

There is, of course, no one way to do a good pitch remotely during these trying times. But for many startups, it’s even more critical that you raise money quickly, at a time when investors are growing more and more cautious.

Almost all good pitches have a good, solid story behind the slides. Moreover, guiding the investor to the right slides is even more important when you are pitching remotely rather than relying on the investor to “get it.” You aren’t there to just chat—you are there to pitch.

Remember to keep a “just right” approach to all the sections of your pitch: market, product, competitors, business model, and team. Ensure that you don’t have too much or too little on any one section.

Most importantly, think about what the investor will say about your company after the pitch. If it’s not what you want them to say, then your pitch needs work!

* * *

Leading Forum
Rizwan Virk is the founder of Play Labs @ MIT and author of Startup Myths & Models: What You Won’t Learn in Business School, Zen Entrepreneurship, and The Simulation Hypothesis. He is also a venture partner at several VC firms. For more information, please visit ZenEntrepreneur.com and follow him on Twitter.

*Atmos is a text-based, mentor management, and retention platform, that accurately connects university students to mentors in a more personalized and efficient way than ever before. From BlueSkyAI.

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *

 

Explore More

How to Get Venture Capital Dear Founder



Posted by Michael McKinney at 07:06 AM
| Comments (0) | Entrepreneurship

03.11.20

5 Leadership Lessons: Tireless—Key Principles That Drive Success Beyond Business School

Tireless Kim Lorenz

YOUR NEXT DECISION could dictate the trajectory you take. In Tireless, Kim Lorenz encourages us to look for opportunities both as an entrepreneur and in the company where we work, that will propel us to success.

Lorenz co-founded two companies that he eventually sold to Fortune 500’s. He shares his experiences and those of others to give us a picture of the principles that bring success and the mindset required to see the opportunities in front of us. Here are five thoughts from Kim Lorenz:

1  “You and only you, make the choices you make. Believing in opportunity, and believing that opportunities are in front of you all the time, helps you make better decisions and look for what is in front of you yet often not visualized. It is the leaders—those who see the opportunity disguised as a problem—who think through solutions and become partners in the positive changes needed. You can make that decision to be part of positive change, and you can start today.”

2  “Improving your mental attitude opens your eyes to better opportunities and allows you to visualize positive steps that you might not otherwise see. We all hear the glass is half-empty to some, while half-full to others. Thinking along the more positive, ‘half-full’ scenario leads to looking for the rest of an opportunity as opposed to thinking negatively and waiting for the remainder of the negative. Your subconscious never rests, so it is important to be aware and try to use it as a positive force. Look for opportunity that is there. Your self-talk is with you all the time. Make it positive. Only you can make the choice and set the direction for your self-talk.”

3  “’This might work,’ discipline involves making the choice to get off your butt and do something. That ‘doing’ could be learning and applying that knowledge, trying something new or going full-out on a business idea. Simple discipline can be applied to any person, in any situation. Simply put, it is developing a habit of questioning everything; not accepting things as they seem to be, and asking yourself why they are not. Discipline also involves taking initiative and taking the first steps to imagine and create what you think might be possible. As the Nike slogan says, Just Do It! When you are dreaming of something you really want to do, start thinking about what the first step is and take that step. You will not only feel better, but you will also likely commit to accomplishing more. Only you can choose to strive to do more in any situation. Do not worry about what blunders might ensure. Work through them and find the opportunity that results.”

4  “Many who have made it to the top sometimes get into a familiar rut, going through each day the same as the day before. They made it to the top position, perhaps as CEO, and then their goals to achieve more are just not as appealing to them. [See Are You Leading for the Right Reasons?] At the same time, other CEO’s continue to improve, add value to the business, expand, and do great things. They too must continually improve and find new ways to do business. We all put on our pants the same way, after all. The difference is what you mentally establish regarding what you need to do and your level of follow-through. Continual success requires the tireless discipline to do it; taking the time to write down the goals. This is what makes the difference between the ordinary leader and the exceptional, growing leader.”

5  “In both business and personal relationships, the bottom line is the same: how you treat people is always a reflection on you. A genuine, self-confident person treats all people the same, regardless of position, gender, race, or social status. Every person has their own story, their own struggles, and their own hopes and dreams. While we realistically cannot listen to all of them, we can make a better effort to get to know the people around us.”

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *

 

Explore More

William Donaldson Sam Zell

Posted by Michael McKinney at 07:45 PM
| Comments (0) | Entrepreneurship , Five Lessons

03.09.20

5 Leadership Lessons: Built Not Born

Built Not Born

IF you are considering starting your own business or struggling to get one off the ground, Tom Golisano’s Built Not Born will be very valuable. Entrepreneurship is not easy, but it can be rewarding, provided you keep some basic business principles in mind.

With $3000 and a credit card in hand, Tom Golisano started what has become today the multi-billion-dollar Paychex. Golisano takes us through what he experienced from start to finish, what not to forget, and what the business owner is responsible for and the importance of understanding every aspect of your business.

Much of the advice is obvious, but in the thick of running a business, all too easy to forget. And Golisano keeps the critical issues front and center. “Running a business, any business, means challenges, some expected and others that come out of the blue. It comes with the territory. It’s an old aphorism, but it’s true nevertheless: If you can’t stand the heat, get out of the kitchen.” While entrepreneurship is not for everyone, going in well-informed is essential to success.

1  The Business Plan: It’s easy to let passion cloud your judgment. “That’s the myth many business books peddle: ‘Follow your passion,’ or ‘Believe it and you’ll achieve it.’ That sort of thinking can lead you down a dangerous path. The most important thing when planning your business should be the accuracy of your facts and statistics. Another important thing not only to understand but to accept with every fiber of your being is that a first-rate business plan can often tell you not to start the business at all but run away and run fast. It’s critical that you take a hard look at the actual numbers and be candid with yourself about what they are telling you.”

2  Financials: “If you don’t understand financial statements, you are running your business blindfolded. I think many entrepreneurs get into trouble simply because they don’t understand their financial statements, of which the balance sheet and the profit and loss statement are the most important. If you know your numbers, you know your business. Any entrepreneur who does not understand financial statements is in great danger.”

3  Cash Flow: “If your business is short of cash, the first place to look is at your sales productivity. Cash flow problems are a direct result of not generating enough revenue through sales. Therefore, they are actually a sales problem, not a cash flow problem. The biggest mistake entrepreneurs make is a tendency to overestimate their ability to sell their product or service.”

4  Business Knowledge: “Often, entrepreneurs not only have large gaps in their business knowledge and experience but also are completely blind to their deficiencies. If you want to improve your chances of success, be honest with yourself and recognize the weaknesses in your business education and your business acumen, and seek help from a mentor or take courses to learn what you need to know.

When you think of a thoroughbred racehorse, no matter how good it is, no matter its lineage or pedigree, it won’t win races if it’s ridden by a poor jockey. The same can be said of a business.”

5  Family: “A common regret I am sure I share with many entrepreneurs is not spending as much time with my family as I should have. This a tough one because you are working hard building your company so that you can provide a better standard of living for your spouse and children. However, I do regret not finding a better balance. Work-life balance has become a big thing in business in recent years, and I’m not sure how qualified I am in giving advice on the subject, but remember it’s no good being successful and having no one with whom to share that success.”

Always keep in mind, a lasting legacy is built on we, not I.

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *

 

Explore More

That Will Never Work Dear Founder

Posted by Michael McKinney at 08:02 AM
| Comments (0) | Entrepreneurship , Five Lessons

02.17.20

How to Get Venture Capital: Secrets of Sand Hill Road

How to Get Venture Capital

VENTURE CAPITAL is not right for every business. But if you determine that it is right for you, you should read Secrets of Sand Hill Road by Scott Kupor, the managing partner at Andreessen Horowitz. It is a book for those with big ideas.

Beginning in the 2000s, capital became more abundant due in large part to the costs required to start a new company. Consequently, the amount of money a start-up needs to raise has declined significantly. Beyond that, there are more angel investors to provide early-stage funding. And the size of the funds has increased as institutions have contributed to VC funds allowing them to fund growth throughout a startup’s life cycle.

VC firms stay with their investments longer (upwards of ten years), often providing advice, support, a network of relationships, and coaching to improve the odds of success. Of course, most investments don’t work out. 50 percent don’t. 20 to 30 percent of businesses invested in make a return over the investment. 10 to 20 percent are home runs where an investment returns ten to one hundred times the investment.

It’s those home runs that make the whole thing work. Understanding those economics will help you to align your objectives with the sources of the funds you need. VCs don’t always get it right because, at the beginning, there are really no hard numbers to go on. To determine if funding your venture is right for them, they look for three things:

1. People and Team

If the idea is a good one, we have to assume that there are others thinking about doing the same thing. “So what matters most is, why do I as a VC want to back this particular team versus any number of the x-number of other teams that might show up to execute this idea? A decision to invest means that the VC cannot invest in a different team that may come along and ultimately be better equipped to pursue the opportunity.”

VCs are trying to determine whether this founder will be able to create a compelling story around the company mission in order to attract great engineers, executives, sales and marketing people, etc.

2. Product

Because the original idea is not likely the idea or product that will ultimately go to market, the VC wants to know how the founder came up with the idea. They want to know the process. They like founders that “have strong opinions but ones that are weakly held, that is, the ability to incorporate compelling market data and allow it to evolve your product thinking.” In other words, “they want to be comfortable that your process of evaluating the market needs to date is robust enough to enable you to adapt appropriately to changing market demands.”

The idea or product also must be significantly different to move people. Great illustration of this point:

Ben Horowitz uses the difference between a vitamin and an aspirin to articulate this point. Vitamins are nice to have; they offer some potential health benefits, but you probably don’t interrupt your commute when you are halfway to the office to return home for the vitamin you neglected to take before you left the house. It also takes a very, very long time to know if your vitamins are even working for you. If you have a headache, though, you’ll do just about anything to get an aspirin! They solve your problem and they are fast acting. Similarly, products that often have massive advantages over the status quo are aspirins. VC want to fund aspirins.

3. Market Size

What matters most is the size of the market you’re going after because the bigger the market the better the odds of a home run.

Kupor delves into how VCs are funded and why it matters to the entrepreneur. Specifically, ask how old the fund is from which you are receiving payment. If it is generally towards the end of its life cycle, there is will be additional pressure on you to return capital or exit. Also, at the beginning of the life cycle there are generally funds reserved for additional rounds of funding.

Importantly, he covers what form your company should take (C Corp), stock vesting, up-front agreements, intellectual property, and employee option pools.

How much money should you raise? This is something founders often get wrong. The simple answer is: “to raise as much money as you can that enables you to safely achieve the key milestones you will need for the next fund-raising.” Raise the first round with the second round in mind.

Thus, if you are raising your first round of financing (typically called the Series A round), you will want to raise an amount of money that gives you enough runway to get to the milestones you will need to hit to be able to successfully raise he next round of financing (the Series B) at (hopefully) a higher valuation than the A round.

The other consideration regarding the amount of capital to raise is the desire to maintain focus for the company by forcing real economic trade-offs during the most formative stages of company development. Scarcity is indeed the mother of invention. Believe it or not, having too much money can be the death knell for early-stage startups.

In the discussion of the art of the pitch, Kupor notes that VCs aren’t expecting you to be clairvoyant, but “you do need to demonstrate to the VCs that you are the master of the domain you are proposing to attack and that you have thought about every important detail of your business in a way that shows depth of preparation and conviction.”

Kupor also covers the less exiting—but critical—legal and financial aspects of funding like term sheets, valuation, voting rights, the board, stock, insurance, vesting, and founder issues. Actually, he covers it in the most straight-forward manner I’ve ever read.

Secrets of Sand Hill Road is a must-read for anyone considering entrepreneurship. Kupor takes the mystery out of funding and clearly explains why things work the way they do. You will discover the inner workings of the VC-Founder partnership. If you are an entrepreneur, this book will help you get to know your partner.

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *

 

Explore More

Dear Founder 36 Lessons from Coach Bill Campbell

Posted by Michael McKinney at 08:13 AM
| Comments (0) | Entrepreneurship

01.22.20

What Robert Greifeld Can Teach You About Getting Your Organization On Track

What Robert Greifeld Can Teach You

TURNING AROUND an organization requires a new story. A very clear and well-told story. When Robert Greifeld was asked to take the helm of Nasdaq in 2003 to execute a turnaround, he came with a new story. As he relates in Market Mover, the story had five parts:

1. Get the Right People on Board
2. Reduce Bureaucracy
3. Embrace Fiscal Discipline
4. Overhaul Technology
5. Stop Being Satisfied with No.2

In any cultural or business turnaround, the right people make all the difference. You can’t predict the future, so you need people that get the new story.

You can’t control circumstances, but what you can do is to ensure that you have the best people in place so that when the world changes around them, they can adapt, respond, and step up. That’s why my motto has always been people first.

He believes that you should promote before you recruit and offers this advice on finding them:

Often, the people who are right for the new culture are not individuals who thrived under the previous regime. Change the culture, and inevitably, people with skill sets more apropos to the next context suddenly stand out.

He wasn’t looking for just smart people, but people with bandwidth. That is, people with the “capacity to fruitful focus one’s attention on multiple areas.” He also encouraged debates among his executive team.

The point of the debate wasn’t to enact a perfectly democratic ideal. It was to achieve better clarity on all of the issues involved so everyone understood the reasons for proposed changes, and my decision-making was both transparent and much better informed.

Next, Greifeld had to get people working on the right things. “A common trait of those who fail, I believe, is that they end up working on the wrong things.” Prioritizing is the challenge.

As a leader, I consider it my job to focus on what’s not working. Optimism is essential if you’re to take risks and succeed; indeed, it’s probably true that the only people who really accomplish things are the optimists. But that optimism must be tempered by a disciplined and critical perspective.

Shine the light into areas of vagueness, confusion, or conflict, knowing that there is leverage to be found in creating clarity, alignment, and resolution.

A focus on cash is vital, but it’s important to remember that you can’t save your way to success. “When a culture is focused entirely on thrift, the next big thing is usually invented somewhere else.”

To address the technology gap at Nasdaq, Greifeld went outside to buy winners—smart acquisitions.

Today’s outsiders are tomorrow's establishment. Business leaders should always cultivate an attentive disposition toward outsiders, especially in industries impacted by technology. Always be on the lookout for new ideas, products, and technologies happening on the edges of your business ecosystem, where outsiders are developing a different picture of your future in apocryphal garages and basements.

Naturally, Nasdaq must deal with regulation and government oversight, but no matter what business we are in, we must sell ideas to others. “Don’t feel like you’re above politics—none of us are. Learn to work with it and use it to increase your competitive advantage. Lobbying is education. It’s an opportunity to get important perspectives on the table so legislatures and regulators can actually make informed decisions.”

Motivation to change is easier when you are threatened, but when times are good, when you have things where you want them, change is much harder. You always need to be looking for ways to change and grow.

Any moment reflecting on the past is a moment you’re not focused on the future. Just because you were successful yesterday does not mean you will be successful tomorrow. If you’re not careful, personally and organizationally, past success will be a weight on future success, and the greater the success, the heavier the weight.

As NASDAQ grew and matured, Greifeld realized that he was not as essential as he had been. It was time to move on. He left the CEO position to someone he promoted when he first arrived, Adena Friedman.

“Business is a marathon, not a sprint, and to be a leader in the marathon takes an unusual degree of fitness—mental, emotional, and physical.”

Market Mover is of course, full of the nuts and bolts of financial technology and the digital economy, but it is so much more. It is not just about the revival of Nasdaq’s near-death experience but is a course in leadership and the entrepreneurial spirit that drives innovation and growth. He writes candidly of the most critical moments of his thirteen-year career at Nasdaq with each chapter focusing on a headline-making event. He takes us through his response and the lessons he learned. This book will not only help you be a better leader, but the insights you will find here will prove invaluable in guiding you as you build your organization.

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *

 

Explore More

Stephen Schwarzmans 25 Rules Robert Iger Leadership Lessons

Posted by Michael McKinney at 02:35 PM
| Comments (0) | Entrepreneurship , General Business , Leaders

10.28.19

Beginner’s Pluck: 14 Principles to Build Your Life of Purpose

Beginners Pluck

YOUR PURPOSE is not out there waiting to be found. Your purpose is something you build. Being clueless is where the adventure begins.

Liz Forkin Bohannon is the co-founder and CEO of Sseko Designs. Sseko Designs creates opportunity for women and girls living in extreme poverty, but they aren’t another charity. Instead, they employ women in Uganda to make footwear and accessories allowing them to earn money towards college degrees so that they can stop the cycle of poverty for themselves and their families and eventually move into other fields. Sseko Designs the largest exporter of non-agricultural goods from Uganda to the U.S.

Bohannon shares her journey in Beginner’s Pluck: Build Your Life of Purpose and Impact Now. It is well worth reading for would-be entrepreneurs, but the insights and lessons apply to any area of life. Her journey is not what you would expect but you will find it encouraging because it is down-to-earth. Bohannon’s wit and personality come through, making it a joy to read. (She has a Masters in Journalism.)

We all have been encouraged to “follow our dreams” and to “find our passion.” She says, “what I think was meant to be a message of encouragement and empowerment is actually creating anxiety, fear, and serious analysis paralysis.” The message is a myth. “Stop wasting your time hunting for a unicorn that doesn’t exist and instead get down to the incredibly juicy, adventurous, life-giving work of building an extraordinary life of passion, purpose, and impact.” This is one of the best books you’ll find on the topic. And one worth handing off to anyone starting out in life.

She has distilled from her experience, 14 principles to build your life of purpose. I’ll list them below with a comment from the book to give you a taste of the insights you’ll find here.

The Principles of Beginner’s Pluck

Own Your Average

You. Are. Average.

Owning Your Average is actually a remarkably freeing and powerful acknowledgment because being born inherently gifted or above average isn’t a prerequisite to living an extraordinary life.

Building a life of purpose and passion has so much less to do with your inherent intelligence or gifts and more about your posture, mindset, and curiosity quotient.

2. Stop Trying to “Find Your Passion”

To believe that your passion and purpose exists, fully formed “out there” … and is waiting to be found is a kind of lunacy. And it puts an awful lot of pressure on you to make the right step and get the right degree and open the right door so the stars align and you can, in a cinematically glorious moment Find Your Passion.

Passion and purpose are not an object of desire or hidden treasure waiting to be discovered. They are a canvas that is waiting for you to get the first splatter of paint on it.

3. Dream Small

There are lots of excuses that can keep you from pursuing your Big Dream of quitting your job and becoming a full-time artist who can actually pay their bills and then some. So, make it smaller. Go smaller and smaller until you have no more excuses.

4. Chose Curiosity Over Criticism

Curiosity is not only one of the greatest tools we have in building lives of purpose and passion, it’s a mindset that each and every one of us can choose, each and every day.

Curiosity will not only help you take those first, daunting steps, but will actually make you more successful in the long run at whatever it is you choose to build and create.

5. Be on Assignment in Your Own Life

Show up like a cub reporter, new on the beat. Start looking around and ask interesting questions, not needing to confirm your preexisting biases.

The less you think you have it all figured out, the more you can learn.

6. Find and Replace

What if every time we thought we should be looking for THE solution, we Found and Replaced “Solution” with “Wicked Problem?”

We become so obsessed with the solution and we pour energy into chasing it without much regard to whether the Solution is actually solving the problem. We start with and get emotionally attached to the The Solution, when we should be having a committed love affair with The Interesting Problem.

7. Surprise Yourself

If you want to build a life of passion and purpose, you’re best off if you’re willing to be surprised by what it looks like. You might actually build a passionate life doing something that in a million years, you’d never have been able to see coming. And you will never know unless you are open enough to try. You’ll never be surprised if you’re running every idea through a 12-point checklist and making sure it aligns perfectly with everything you think you know about your interests and gifts and experience and natural inclinations.

8. Get Your Steps In

Think about having a Fitbit for your life. Doesn’t actually matter where you’re going, so much as that you get your steps in.

[I made a deal with myself.] The deal I made did not rely on luck or the right connection or permission from someone else or anything else we are tempted to blame for our lack of movement. The deal wasn’t about a specific outcome, it was intended to break my inertia and get me moving.

9. Get Hooked on Making (and Keeping!) Promises

Make a promise that aligns not with what you want now, but what you want most in life. Building a life of purpose and impact is not some mystical, cryptic, cosmic code to be cracked, it’s actually just a series of meaningful promises, small and large, that you actually keep. Do. The. Work.

10. Be Good with Good Enough

What is the least amount of time/energy/resources I can put into this concept/idea/dream before I can put it out into the universe and actually start getting real-life feedback that will enable me to make it even better?

Excellence is not a requisite for starting.

11. Stop, Drop, and WOW

A spirit of WOW must be intentionally cultivated.

WOW TIME is an hour-long time slot where I go for a walk or to a coffee shop and let my WOW run amuck. I don’t daydream or let my mind wander. I vision. In vivid color. I let myself visualize what the future could actually look like. And feel like. And taste like. And sound like.

12. Dream to Attract Your Team

Your dream will attract your team. Asking for help is one of the most vulnerable and courageous things you will ever do. You will face rejection. But I promise you the hurt is worth having a dream that eventually attracts your team.

13. Don’t Hide from The Shadows

The degree to which you can experience true joy and lasting fulfillment is equal to the degree to which you hold space for darkness and questions.

And if we buy the line that “Finding Our Pasion” and “Changing the World” brings only clean and bright happiness and self-satisfaction, we’ll bounce from “cause” to “cause.”

14. Walk One Another Home

We were all created in the image of The Divine to partake in the beautiful and terrifying dance of giving and receiving, joy and disappointment, miracles and mistakes. We don’t need you to be anyone else’s hero. We just need more people walking one another home.

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *

 

Explore More

Killing It Caterpillars Edge

Posted by Michael McKinney at 11:32 PM
| Comments (0) | Entrepreneurship

10.14.19

Robert Iger's 20 Leadership Lessons

Robert Iger Leadership Lessons

ROBERT IGER has worked for the same company for forty-five years: twenty-two of them at ABC, and another twenty-three at Disney, after Disney acquired ABC in 1995—the last fourteen of those years, as the CEO of Disney. He shares it all in The Ride of a Lifetime. Like the biggest, most exciting rides were once called at Disneyland, he says his time as CEO of Disney has been like a fourteen-year ride on a giant E-Ticket attraction.

After sharing a bit of his background, he quickly delves into his career beginning at ABC, and the lessons he’s learned and the principles that have guided him that help “nurture the good and manage the bad.”

He explains the thinking behind his habit of waking at 4:15 am.

It’s vital to create space in each day to let your thoughts wander beyond your immediate job responsibilities, to turn things over in your mind in a less pressured, more creative way than is possible once the daily triage kicks in. I am certain I’d be less productive and less creative in my work if I didn’t also spend those first hours away from the emails and text messages and phone calls that require so much attention as the day goes on.

Iger writes of the key mentors in his career and his relationship with Steve Jobs, George Lucas, and Michael Eisner. Iger truly embraces innovation. When he took over as CEO in 2005, he laid out three strategic priorities saying it should be about the future, not the past: Recommit to the concept that quality matters, embrace technology instead of fighting it, and think bigger—think global—and turn Disney into a stronger brand in international markets.

These priorities have guided the company through all of the growth and acquisitions since he was named CEO. Today, Disney is the largest media company in the world, counting Pixar, Marvel, Lucasfilm, and 21st Century Fox among its properties. Its value is nearly five times what it was when Iger took over.

You have to approach your work and life with a sense of genuine humility. The success I’ve enjoyed has been due in part to my own efforts, but it’s also been due to so much beyond me, the effort and support and examples of so many people, and to twists of fate beyond my control.

What follows are 20 leadership lessons from the book but stripped of the stories that brought them to life. You’ll have to read the book to get that.

1
I talk a lot about “the relentless pursuit of perfection.” In practice, this can mean a lot of things, and it’s hard to define. It’s a mindset, more than a specific set of rules. It’s not about perfectionism at all costs. It’s about creating an environment in which people refuse to accept mediocrity. It’s about pushing back against the urge to say that “good enough” is good enough.

2
Be decent to people. Treat everyone with fairness and empathy. This doesn’t mean that you lower your expectations or convey the message that mistakes don’t matter. It means that you create an environment where people know you’ll hear them out, that you’re emotionally consistent and fair-minded, and that they’ll be given second choices for honest mistakes. Excellence and fairness don’t have to be mutually exclusive. Strive for perfection but always be aware of the pitfalls of caring only about the product and never the people.

3
True integrity—a sense of knowing who you are and being guided by your own clear sense of right and wrong—is a kind of secret weapon.

4
Value ability more than experience, and put people in roles that require more of them than they know they have in them.

5
Do not fake anything. You have to be humble, and you can’t pretend to be someone you’re not or to know something you don’t. True authority and true leadership come from knowing who you are and not pretending to be anything else.

6
Don’t start negatively and don’t start small. People will often focus on little details as a way of masking a lack of any clear, coherent, big thoughts. If you start petty, you seem petty.

7
Don’t let ambition get ahead of opportunity. By fixating on a future job or project, you become impatient with where you are. You don’t tend enough to the responsibilities you do have, and so ambition can become counterproductive. It’s important to know how to find the balance—do the job you have well; be patient; look for opportunities to pitch in and expand and grow; and make yourself one of the people, through attitude and energy and focus, whom your bosses feel they have to turn to when an opportunity arises.

8
My former boss Dan Burke [ABC] once handed me a note that said: “Avoid getting into the business of manufacturing trombone oil. You may become the greatest trombone-oil manufacturer in the world, but in the end, the world only consumes a few quarts of oil a year!” He was telling me not to invest in small projects that would sap my and the company’s resources and not give much back. I still have that note in my desk, and I use it when talking to our executives about what to pursue and where to put their energy.

9
We all want to believe we’re indispensable. You have to be self-aware enough that you don’t cling to the notion that you are the only person who can do this job. At its essence, good leadership isn’t about being indispensable; it’s about helping others be prepared to step into your shoes—giving them access to your own decision-making, identifying the skills they need to develop and helping them improve, and sometimes being honest with them about why they’re not ready for the next step up.

10
Too often, we lead from a place of fear rather than courage, stubbornly trying to build a bulwark to protect old models that can’t possibly survive the sea change that is underway. It’s hard to look at your current models, sometimes even ones that are profitable in the moment, and make a decision to undermine them in order to face the change that’s coming.

11
Optimism emerges from faith in yourself and in the people who work for you. It’s not about saying things are good when they’re not, and it’s not about conveying some blind faith that “things will work out.” It’s about believing in your and others’ abilities.

12
People sometimes shy away from big swings because they build a case against trying something before they even step up to the plate. Long shots aren’t usually as long as they seem. With enough thoughtfulness and commitment, the boldest ideas can be executed.

13
You have to convey your priorities clearly and repeatedly. If you don’t articulate your priorities clearly, then the people around you don’t know what their own should be. Time and energy and capital get wasted.

14
You can do a lot for the morale of the people around you (and therefore the people around them) just by taking the guesswork out of their day-to-day life. A lot of work is complex and requires intense amounts of focus and energy, but this kind of messaging is fairly simple: This is where we want to be. This is how we’re going to get there.

15
It’s easy to be optimistic when everyone is telling you you’re great. It’s much harder, and much more necessary, when your sense of yourself is on the line.

16
As a leader, you are the embodiment of that company. What that means is this: Your values—your sense of integrity and decency and honesty, the way you comport yourself in the world—are a stand-in for the values of the company. You can be the head of a seven-person organization or a quarter-million-person organization, and the same truth holds: what people think of you is what they think of your company.

17
Projecting your anxiety onto your team is counterproductive. It’s subtle, but heirs a difference between communicating that you share their stress—that you’re in it with them—and communicating that you need them to deliver in order to alleviate your stress.

18
The decision to disrupt a business model that is working for you requires no small amount of courage. It means intentionally taking on short-term losses in the hope that a long-term risk will pay off. Routines and priorities get disrupted. Traditional ways of doing business get slowly marginalized and eroded—and start to lose money—as a new model takes over. That’s a big ask, in terms of a company’s culture and mindset. When you do it, you’re saying to people who for their entire careers have been compensated based on the success of their traditional business: “Don’t worry about that too much anymore. Worry about this instead.” But this isn’t profitable yet, and won’t be for a while. Deal with this kind of uncertainty by going back to basics: Lay out your strategic priorities clearly. Remain optimistic in the face of the unknown. And be accessible and fair-minded to people whose work lives are being thrown into disarray.

19
It’s not good to have power for too long. You don’t realize the way your voice seems to boom louder than every other voice in the room. You get used to people withholding their opinions until they hear what you have to say. People are afraid to bring ideas to you, afraid to dissent, afraid to engage. This can happen even to the most well-intentioned leaders. You have to work consciously and actively to fend off its corrosive effects.

20
Hold on to your awareness of yourself, even as the world tells you how important and powerful you are. The moment you start to believe it all too much, the moment you look at yourself in the mirror and see a title emblazoned on your forehead, you’ve lost your way.

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *

 

Explore More

That Will Never Work Stephen Schwarzmans 25 Rules



Posted by Michael McKinney at 10:39 AM
| Comments (0) | Entrepreneurship , Leaders

10.07.19

Stephen Schwarzman’s 25 Rules for Work & Life

Stephen Schwarzman

BLACKSTONE chairman, CEO, and co-founder Stephen Schwarzman has written a book about the potential that can be realized when you combine personal responsibility with ambition. What It Takes: Lessons in the Pursuit of Excellence chronicles his life leading up to the founding of Blackstone and the journey to build it into what it has become today. He shares the lessons and the opportunities that have come his way as a result of his success. It is inspiring and instructive. Well worth the time to read.

Schwarzman grew up in a successful entrepreneurial family selling curtains and linens in Philadelphia. His Dad was content with the one store. Schwarzman was not. He had more ambition. Even in high school he wanted to create something more than the status quo. Through connections and hard work, he got a popular rhythm and blues group of the late 50s, Little Anthony and the Imperials, to come and play at his school. He learned that “if you want something badly enough, you can find a way. You can create it out of nothing. But wanting something isn’t enough. If you’re going to pursue difficult goals, you’re inevitably going to fall short sometimes. It’s one of the costs of ambition.” But you try anyway.

With good grades and being fleet-of-foot, he was admitted to Yale University. Like most freshmen, he was lonely and intimidated. He got through it and during the summer he grew in confidence by taking a job at sea. With a new mindset he began his sophomore year determined to make it create something out of nothing as he did in high school. He started a dorm room business and a dance society to bring girls around. His determination and creativity make for a good read.

After graduation he got a job at Donaldson Lufkin Jenrette, went to Harvard Business School and ended up at Lehman. This is where he really learned about finance and discovered his strengths. He left Lehman and in 1985 Schwarzman co-founded Blackstone with his mentor and friend Pete Peterson with a $400,000 investment. Today, Blackstone has over $500 billion in assets under management. But as with all new ventures it had its share of inflection points, setbacks and disappointments.

He says, “To be successful you have to put yourself in situations and places you have no right being in. You shake your head at your stupidity. But through sheer will, you wear the world down, and it gives you what you want.” Here are 25 more rules for work and life that are woven throughout his book:

1
It’s as easy to do something big as it is to do something small, so reach for a fantasy worthy of your pursuit, with rewards commensurate to your effort.

2
The best executives are made, not born. They never stop learning. Study the people and organizations in your life that have had enormous success. They offer a free course from the real world to help you improve.

3
Write or call the people you admire, and ask for advice or a meeting. You never know who will be willing to meet with you. You may end up learning something important or form a connection you can leverage for the rest of your life. Meeting people early in life creates an unusual bond.

4
There is nothing more interesting to people than their own problems. Think about what others are dealing with, and try to come up with ideas to help them. Almost anyone, however senior or important, is receptive to good ideas provided you are thoughtful.

5
Every business is a closed, integrated system with a set of distinct but interrelated parts. Great managers understand how each part works on its own and in relation to all the others.

6
Information is the most important asset in business. The more you know, the more perspectives you have, and the more likely you are to spot patterns and anomalies before your competition. So always be open to new inputs, whether they are people, experiences, or knowledge.

7
When you’re young, only take a job that provides you with a steep learning curve and strong training. First jobs are foundational. Don’t take a job just because it seems prestigious.

8
When presenting yourself, remember that impressions matter. The whole picture has to be right. Others will be watching for all sorts of clues and cues that tell who you are. Be on time. Be authentic. Be prepared.

9
No one person, however smart, can solve every problem. But an army of smart people talking openly with one another will.

10
People in a tough spot often focus on their own problems, when the answer usually lies in fixing someone else’s.

11
Believe in something greater than yourself and your personal needs. It can be your company, your country, or a duty for service. Any challenge you tackle that is inspired by your beliefs and core values will be worth it, regardless of whether you succeed or fail.

12
Never deviate from your sense of right and wrong. Your integrity must be unquestionable. It is easy to do what’s right when you don’t have to write a check or suffer any consequences. It’s harder when you have to give something up. Always do what you say you will, and never mislead anyone for your own advantage.

13
Be bold. Successful entrepreneurs, managers, and individuals have the confidence and courage to act when the moment seems right. They accept risk when others are cautious and take action when everyone else is frozen, but they do so smartly. This trait is the mark of a leader.

14
Never get complacent. Nothing is forever. Whether it is an individual or a business, your competition will defeat you if you are not constantly seeking ways to reinvent and improve yourself. Organizations, especially, are more fragile than you think.

15
Sales rarely get made on the first pitch. Just because you believe in something doesn’t mean everyone else will. You need to be able to sell your vision with conviction over and over again. Most people don’t like change, so you need to be able to convince them why they should accept it. Don't be afraid to ask for what you want.

16
If you see a huge, transformative opportunity, don’t worry that no one else is pursuing it. You might be seeing something others don’t. The harder the problem is, the more limited the competition, and the greater the reward for whomever can solve it.

17
Success comes down to rare moments of opportunity. Be open, alert, and ready to seize them. Gather the right people and resources; then commit. If you’re not prepared to apply that kind of effort, either the opportunity isn’t as compelling as you think or you are not the right person to pursue it.

18
Time wounds all deals, sometimes even fatally. Often the longer you wait, the more surprises await you. In tough negotiations especially, keep everyone at the table long enough to reach an agreement.

19
Don’t lose money!!! Objectively assess the risks of every opportunity.

20
Make decisions when you are ready, not under pressure. Others will always push you to make a decision for their own purposes, internal politics, or some other external need. But you can almost always say, “I think I need a little more time to think about this. I’ll get back to you.” This tactic is very effective at defusing even the most difficult and uncomfortable situations.

21
Worrying is an active, liberating activity. If channeled appropriately, it allows you to articulate the downside in any situation and drives you to take action to avoid it.

22
Failure is the best teacher in an organization. Talk about failures openly and objectively. Analyze what went wrong. You will learn new rules for decision making and organizational behavior. If evaluated well, failures have the potential to change the course of any organization and make it more successful in the future.

23
Hire 10s whenever you can. They are proactive about sensing problems, designing solutions, and taking a business in new directions. They also attract and hire other 10s. You can always build something around a 10.

24
Be there for the people you know to be good, even when everyone else is walking away. Anyone can end up in a tough situation. A random act of kindness in someone’s time of need can change the course of a life and create an unexpected friendship or loyalty.

25
Everyone has dreams. Do what you can to help others achieve theirs.

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *

 

Explore More

Sam Zell William Donaldson



Posted by Michael McKinney at 07:51 AM
| Comments (0) | Entrepreneurship , Leaders

09.24.19

“That Will Never Work”

That Will Never Work

THE STORY GOES that the idea for Netflix came to Reed Hastings after he was hit with a $40 late fee when he returned his rental of Apollo 13 to Blockbuster. Annoyed, he thought, “What if there were no late fees?” And wham, the idea for Netflix was born.

Of course, we like stories like that. It’s neat and clean, but in this case, it’s not true. It’s useful though, and it captures in a paragraph the essence of what Netflix is all about. Marc Randolph, Netflix’s co-founder, and first CEO says it’s emotionally true. “Reed’s oft-repeated origin story,” he says, “is branding at its finest, and I don’t begrudge him for it at all.”

The real story is longer. While it is messy and complicated, it is much more exciting. Marc Randolph shares it all in That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea. I read a lot of business books, and I can say this is one of the best you’ll ever read on starting and growing a business—the emotions, the triumphs, the failures and the lessons learned. The story is a well-told page-turner.

Briefly, the real story is that while carpooling with Hastings to jobs that would soon be redundant due to a merger, Randolph would pitch ideas to him in search of the next act. After a slew of ideas like customized shampoo, dog food, and baseball bats, Randolph hit upon renting VHS tapes online. But, among other things, the costs for acquisition and shipping were too high, so it was ruled out. That is until they learned about an emerging technology—DVDs. Then the game was on.

DVDs were cheaper and lighter, but would they be shipped safely. They tested it by mailing a CD in a greeting card envelope to Hastings. It worked, and they had their idea.

And people said, “That will never work.”

When you start a company, what you’re really doing is getting other people to latch on to an idea. You have to convince your future employees, investors, business partners, and board members that your idea is worth spending money, reputation, and time on.

Randolph risked his time and Hastings risked his money. Now the work began.

I needed to come up with something approaching a business plan. Notice that I used the word “approaching.” I never intended to get there. Most business plans are a complete waste of time. They become obsolete the minute the business starts and you realize how wildly off the mark you were with your expectations. So the trick is to take your idea and set it on a collision course with reality as soon as possible.

Randolph takes us through the whole process from idea to launch day. Any entrepreneur will relate to the journey, and any would-be entrepreneur will find it enlightening. He candidly writes about pitching the idea to investors (what it was like to take a check for 1.9 million dollars to the bank), finding and getting talent, setting up an office, building the basics, building an inventory and the mailer, and building a website.

And creating an innovative culture:

Real innovation comes not from top-down pronouncements and narrowly defined tasks. It comes from hiring innovators focused on the big picture who can orient themselves within a problem and solve it without having their hand held the whole time. We call it loosely coupled but tightly aligned.

He adds this:

Most companies end up building a system to protect themselves from people who lack judgment. And that only ends up frustrating the people who have it.

Launch Day: April 14, 1998

There are a great many stages in the life cycle of a startup. But a tectonic shift happens on launch day. Before you go live, you’re in the dreamy zone of planning and forecasts: your efforts are provisional.

The day your site launches, something shifts. Your work now is no longer predictive and anticipatory: it’s fundamentally reactive. Those problems you anticipated? You didn’t know the half of it. Your planned solutions? They’re a drop in the bucket. And there are hundreds—thousands—of issues that you could have never even imagine, and now have to deal with.

For better and for worse, things never go as planned. And Randolph gives an account of all of it—the possible acquisition of Netflix by Amazon, the potential buyout by Blockbuster, the rethinking of the business model, the ups and downs. Great stories with lessons in them all.

My favorite chapter was, I’m Losing Faith in You. After about 18 months in, Hastings comes to him and tells him that he’s losing faith in his ability to run the company alone. He suggests (really more of an ultimatum) that he come in as CEO and Randolph become president. He writes, “Radical honesty is great, until it’s aimed at you.”

Randolph had to take a look at himself—his strengths and weaknesses, his goals and motivations—and decide what was best for the company. It takes a tremendous amount of humility to do that and to agree to what Hastings was asking.

I realized that there were really two dreams, and I might need to sacrifice one of them to ensure that the other came true.

The company was one dream. Me at the helm was another. And if the company was going to succeed, I needed to honestly confront my own limitations. I need to acknowledge that I was a builder, someone creative and freewheeling enough to assemble a team, to create a culture, to launch an idea from the back of an envelope into a company, an office, a product that existed in the world. Now we were going to have to grow, and rapidly, and that took a different skill set entirely.

And that was Hastings strength. Hastings became CEO and Randolph became the president in 1998. His self-knowledge made is easier for him to know when it was time to go as he eventually did in 2003 not long after Netflix went public. He realized that he liked building things more than the finished product. In the end he writes, “I missed the late nights and early mornings, the lawn chairs and card tables. I missed the feeling of all hands on deck, and the expectation that every day you’d be working on a problem that wasn’t strictly tied to your job description.”

Marc Randolph HPU
As far as “that will never work” goes, Randolph says, quoting William Goldman in Adventures in the Screen Trade, “Nobody Knows Anything.” Which he claims is an encouragement. “If Nobody Knows Anything, then you have to trust yourself. You have to test yourself. And you have to be willing to fail. Not only had all of the people who told me that Netflix would never work (including my wife) gotten it wrong, but so had I. We all had. We’d known that the idea could work, but in the end, nobody knew anything about how—until it did.”

Randolph is conversational and generous to others throughout. There is a lot of experience-based wisdom in this book. Here are a few more insights:

We were always trying to avoid one of the number one pitfalls of startup entrepreneurship: building imaginary castles in your mind, meticulously designed, complete with turrets, drawbridges, moats. Overplanning and overdesigning is often just overthinking—or just plain old procrastination. When it comes to ideas, it’s more efficient to test ten bad ones than spend days trying to come up with something perfect.

Here’s what I’ve learned: when it comes to making your dream a reality, one of the most powerful weapons at your disposal is dogged, bullheaded insistence. It pays to be the person who won’t take no for an answer, since in business, no doesn’t always mean no.

You have to learn to love the problem, not the solution. That’s how you stay engaged when things take longer than you expected.

The most powerful step that anyone can take to turn their dreams into reality is a simple one: you just need to start. The only real way to find out if your idea is a good one is to do it. You’ll learn more in one hour of doing something than in a lifetime of thinking about it.

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *

 

Explore More

BurnThe Business Plan Dear Founder



Posted by Michael McKinney at 04:35 PM
| Comments (0) | Entrepreneurship

08.20.19

Find Your Ideal Job and Build Your Dream Business

Build Your Dream Business

IS IT POSSIBLE to have your cake and eat it too? If there was a way to find your ideal job and build your dream business, would you consider both? Most people see this dichotomy and feel that they need to choose one dream over the other. The reality is that you can have both dreams so long as each doesn’t harm the other and enhances your lifestyle.

Having worked with more than 10,000 entrepreneurs, innovators, inventors, hobbyists and side hustlers, they often struggle with when it is appropriate to leap from the job environment into the entrepreneurship maze. The presumption is that one has to sacrifice entrepreneurial dreams in order to be successful at a specific career choice. The truth is that you can have both and I strongly encourage aspiring employee-preneurs to review the following five reasons to consider maintaining your job in the first few years of building your business.

1. Learning from Both Work Environments:

When you work as an employee and have a side entrepreneurial business, you can learn from both environments and both environments can benefit from each other. Often the entrepreneurial pathway is a lonely pathway and sole-preneurs in particular find themselves trying to navigate, learn and network to gain knowledge while building their business. Realizing that you can gain education from both environments allows an opportunity for you to thrive as an employee and manage a successful side hustle.

2. Business Ownership Strengthens Your Employee Net Worth:

In most positions you rarely get the opportunity to experience the functions associated with the roles of a Chief Executive Officer, Chief Financial Officer, and Chief Marketing Officer, as well as manage the day-to-day requirements for customer engagement and retention. As a result of limited job functions in a large corporate environment, it doesn’t give you the full breadth of work involved in successfully managing an enterprise. By exploring the entrepreneurship maze you will quickly immerse yourself in all these functions, which will give you a better picture of the business itself, as well as an appreciation for the company that employees you.

3. Position Yourself with a Better Financial Portfolio:

Quitting your job and then applying for a small business loan is a recipe for disaster. Often lenders expect borrowers to be fully collateralized. Having a successful employment position strengthens your probability of obtaining a loan or line of credit. While there are a lot of targeted small business funds that don’t require full collateralization, obtaining funds from your financial institution will be challenging if your debt to equity ratio does not meet their criteria and you don’t have a secondary source of income they can secure against the loan. In addition, being employed allows you the flexibility of investing in your small business without the stress of adding more debt into your current financial portfolio. Having the availability to set aside a few hundred dollars each month towards your business is significant when you have to consider paying for licensing, website development, social media support, etc.

4. Don’t Put Your Financial Eggs in One Basket:

Diversifying your income allows you to mitigate financial risk and maximize your ability to make more money. Most people rely on their employment position for sole source income and if that position is compromised they may have a difficult time replacing those funds in a short period of time. Creating other opportunities to generate more money provides an additional financial cushion for investments or as an emergency fund program. The key is to target business concepts that don’t impose too much time on your part but produce a sizable financial return on your investment. Examples may include selling products online, starting a consulting business, or purchasing a semi-absentee franchise opportunity.

5. There Is No Need to Rush the Process:

Most entrepreneurs believe they have to rush things to launch a company because they may lose out on the business opportunity. This may actually be a recipe for disaster. Rushing into a business concept without a proper feasibility review including competitive research, market analysis, and customer input is rushing to an unproven plan. Spending time building the foundation of the business allows for validation and a chance to identify the strengths, weakness, opportunities and threats of the proposed concept. Once the business has reached a certain consistent income you can decide whether to leap into the business full-time or hire others to manage the business.

Ironically many of the Fortune 500 companies today began with entrepreneurs that started their business concept while working for an employer and then transitioned to their business slowly. Skin in the game does not mean you have to quit a job to explore a business. It means you have to be willing to invest time, money, or both in order to build your side hustle into a fledging small business operation. The great news is you don’t have to sacrifice either opportunity to benefit from both opportunities. You can have your cake and eat it too.

* * *

Leading Forum
Kedma Ough is the author of Target Funding: A Proven System to Get the Money and Resources You Need to Start or Grow Your Business. One of today’s most respected authorities on small business funding and entrepreneurship, she is a nationally renowned business coach and funding expert and winner of the Small Business Administration (SBA) Small Business Champion of the Year Award. As a small business consultant and educator, she has guided more than 10,000 individuals through a wide range of business advising and is a past contributing writer for Entrepreneur Magazine. When she is not running around as a live superhero, she enjoys time with her family and traveling the world. Ough is a proud fifth-generation entrepreneur.

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *

 

Explore More

Dear Founder Killing It



Posted by Michael McKinney at 05:33 PM
| Comments (0) | Entrepreneurship , Leading Forum

07.25.19

How Innovation Is Completely Different in Established Organizations Than in Startups

Transforming Legacy Organizations

WE LIVE IN the age of the entrepreneur. New startups appear out of nowhere and challenge not only established companies, but entire industries. Where unicorns were once mythical creatures, the word unicorn now refers to the startups that have a value of at least $1 billion, and there are more than 370 of them worldwide. In 2018 alone, 53 unicorns were added to the list.

Established organizations of a certain size and age, sometimes called “legacy organizations,” are stressed by the entrepreneurial successes. Their greatest fear is no longer their closest competitor, but the startups which, although they live in metaphorical garages and have hardly taken off, have an innovation power that established organizations can only dream of possessing.

Still, no matter what great strides the innovative startups make or how much airtime they’re given by the media, innovation in startups is completely different than innovation in established organizations.

The bad news for established organizations is that innovation for them is much more difficult than it is for startups. The most important job for startups is to focus on their (probably one) product and to subsequently scale up. Established organizations have to entertain many more considerations with their complicated product portfolios and business structures.

The good news for established organizations, however, is that nobody is more likely to succeed than they are in their innovation efforts. Unlike startups, established organizations have tremendous resources. They have money, customers, data, employees, suppliers, partners, and infrastructure -- which put them in a perfect position to transform new ideas into concrete, value-creating, successful offerings.

The Three Tracks of Innovation

Many established organizations commit the mistake of engaging in innovation as if it were a homogeneous process. But innovation in established organizations must actually be divided into three different tracks: optimizing, augmenting, and mutating innovations. All three are important. There’s no one singular type of innovation that’s better than another. And, unlike the startups, established organizations must execute all three types of innovation at the same time.

1. Optimizing innovation: Improving the past. Optimizing innovation makes up the majority of what established organizations already do today. And they must continue doing so. Optimizing innovation is, simply put, the metaphorical extra blade on the razor. When the razor manufacturer launches a new razor that has not just three, but four blades, to ensure an even better, closer and more comfortable shave, only to announce one or two years later that it’s now launching a razor that has not only four, but five blades, that is optimizing innovation. This is where the established player reigns.

No startup with so much as a modicum of sense would even try to beat the established company in this type of innovation. Continuous optimization, both on the operational side and the customer side, is good and important -- in the short term. It pays the rent. But it’s far from enough if the established company wants to continue to be a leader three to five years from now because there are limits on how many blades a razor needs. Each additional blade generates a bit less value than the previous one.

Essentially, optimizing innovation improves upon the past. But startups are inventing the future. To match their entrepreneurial innovation power, established organizations must also prepare for the future and, ultimately, learn how to invent the future.

2. Augmenting innovation: Preparing for the future. To prepare for the future, the established players must engage in innovative augmentations. The digital transformation projects that more and more organizations are initiating can typically be characterized as augmenting innovation. It’s about upgrading the organization and its core offerings and processes from analog to digital. Or, if organizations were born digital, they may have had to become “mobile-first.” Perhaps they’ve even entered the next augmenting phase, which is to become “AI-first.” These augmentations are not small matters. They require great technological conversions. But technology may, in fact, be a minor part of the task. When it comes to augmenting innovation, the biggest challenge is most likely culture.

Where startups have the advantage in building cultures from scratch that fit the times in which they originate perfectly, established organizations, who have had decades or even millennia of history, typically have created cultures in which there’s a preference to maintain the status quo. But if they hope to match the startup innovation power, they will need to transform their cultures to ensure their employees all thrive in constant change.

3. Mutating innovation: Inventing the future. Finally, established organizations also need to invent the future through mutating innovation. The business that maintains or exceeds its level of success 10, 20, and 30 years from now will have mutated. Whatever is currently at the core of the company today, making up the majority of the top and bottom lines, won’t remain the same in the long run.

Mutating innovation requires a bold focus on experimentation into what isn’t yet understood. This is where the successful startups have excelled -- taking what exists and challenging it to either create something new with more value or open up to new target groups. For established organizations, this innovation track is difficult because it essentially challenges their identities. Therefore, mutating innovation cannot thrive inside a company’s core, but needs to be taken outside to the core organization’s edges.

Tools to promote mutating innovation can include establishing labs or X-divisions. Alphabet has excelled in this approach, but other legacy companies are also increasing their experimentations. DIY chain Lowe’s, for example, is building 3D printers that print in zero gravity, thus opening up entirely new markets for themselves. Japanese airline ANA commissioned a global competition via the XPRIZE Foundation to create the future of travel that has now resulted in targeting the next big market: Space.

As game-changing innovation is at the core of these efforts, both startups and established organizations can find common ground in working together. The established companies want access to the startups’ technology expertise, while the startups want access to the established companies’ customers and data, this can be a match made in heaven.

Becoming the Innovation Champions of the Future

Ultimately, if startups turn to scale-ups and succeed, they’ll fast become established organizations with very complex systems, requiring them to change their innovation strategies and entire organizations to remain successful. For Alphabet, even though the company is only 20 years old, this has already happened twice. It moved from a search engine to advertising to spawning off autonomous vehicle and health care companies that may turn into the new cores of the organization.

Similarly, Apple is in the process of transforming from hardware into an entertainment company, and Amazon, perhaps the master of mutation, continuously adds new layers to its complex structure.

For the legacy organizations of the world, they must learn from these examples, dare to challenge their status quo cultures, and ensure that they can engage in optimizing, augmenting and mutating innovation at the same time if they are to become innovation champions of the future.

* * *

Leading Forum
Kris Østergaard is a sought after speaker, facilitator, researcher, and expert on innovation in legacy organizations, corporate cultures and exponential organizations. He is co-founder and Chief Learning and Innovation Officer at SingularityU Nordic, a collaborative venture with Singularity University in Silicon Valley. His new book is Transforming Legacy Organizations: Turn Your Established Business into an Innovation Champion to Win the Future. Learn more at sunordic.org.

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *

 

Explore More

Think Like Amazon Creative Construction



Posted by Michael McKinney at 01:27 PM
| Comments (0) | Creativity & Innovation , Entrepreneurship , Leading Forum

07.15.19

Jerry Colonna on True Grit and Other Advice for Leaders

Jerry Colonna on True Grit

JERRY COLONNA helps start-up CEOs make peace with their demons, the psychological habits and behavioral patterns that have helped them to succeed—molding them into highly accomplished individuals—yet have been detrimental to their relationships and ultimate well-being. In Reboot: Leadership and the Art of Growing Up, he does just that.

He states that much of what he has learned about growing up came from learning to lead. Reboot is a peak into his life and the lives of leaders as they come to terms with who they are and what is holding them back. It’s like listening to a coaching session.

Who we are shows up in our leadership. Sometimes we use the organizations we lead to make ourselves feel better about our unresolved issues. When we don’t like what we see, we have to be honest and ask ourselves, how have I been complicit in creating the conditions I say I don’t want?

In Reboot, he says things like:

The back of the warrior is strengthened by knowledge of knowing the right thing to do. The soft, open heart is made resilient by remembering who you are, what you have come through, and how those things combine to make you unique as a leader.

On learning to lead yourself he says:

Learning to leader yourself is hard because it requires us to look at the reality of all that we are—not to fix blame on ourselves but to understand with clarity what is really happening in our lives. Learning to lead yourself is hard because it is painful. Growth is painful; that’s why so few chose to do it.

A client tells him, “It’s like this—if I’m not panting, I feel like I’m not working.” He responds with:

There it is. That same old haunting belief system. Run faster and faster, telling oneself that the way to be is to do; do more, faster, and just maybe you’ll outrun war, cancer, and the other demons that cause you to doubt your worth, your lovability, and your own voice.

Colonna challenges leaders to show up as you are.

When we stop the bullshitting, the pretending that we’re crushing it, that we’ve got it all figured out, we run the risk of being overwhelmed by the realities of all that we carry—the burdens we’ve convinced must remain secret to keep us and those we love safe, warm, and happy. But the spinning prevents us from being who we really are. You might as well tell me who you are, because if you don’t, I’m going to invent things, and those things will stand between us, keeping us from being close.

His thoughts on grit are illuminating. He begins by telling us what grit is not:

False grit is brittle. It’s the sense that we are nothing if we can’t take a punch. In fact, we define “taking a punch” as the ability to not feel pain when we are pinched. False grit is dangerous. It feeds a stubbornness that, in turn, can feed delusion. We mistake the tendency to delude ourselves that our relationship will improve, our companies will succeed, if only we double down on our old patterns, grip the steering wheel until our knuckles whiten, and bear down. Stubbornness is not the hallmark of the warrior. Leaders who persist out of stubbornness, believing themselves to be gritty, are at best delusional and, at worst, reckless.

On the other hand, true grit is kind.

True grit is persistent. Ture grit persists not in holding on to false beliefs against all evidence but in believing in one’s inherent lovability and worthiness. Ture grit is the leader believing in the team’s purpose, its capacity to overcome obstacles, and the relevancy of the cause. True grit acknowledges the potential of failure, embraces the fear of disappointment, and rallies the team to reach and try, regardless of the potential of loss.

True grit, the capacity to stick with something to the end, stems from knowing oneself well enough to be able to forgive oneself. To have inquired deeply and steadily enough to find the deep sense of purpose that is beyond a personal mission statement. In that knowing of oneself, one is then able to stand as a single, warrior amid a community of brokenhearted fellow leaders.

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *

 

Explore More

Self as Coach Dear Founder



Posted by Michael McKinney at 01:05 AM
| Comments (0) | Entrepreneurship , Personal Development

03.15.19

Leading Views: Entrepreneurs Are the Heroes of Creative Destruction

Entrepreneurs Are the Heroes of Creative Destruction

Leading ViewsCapitalism in America by Alan Greenspan and Adrian Wooldridge is an accessible history of America’s capitalist traditions and entrepreneurial culture.

In this chronological account beginning with the American Revolution, the genius of America’s innovative success is not only its tolerance of but also its penchant for creative destruction. Though sometimes painful, it is the driving force of economic progress.

The authors talk not only of the familiar product innovation but also America’s process innovation—innovation in management and organizing production.

Entrepreneurs drawn from every level of society are the primary drivers of this creative destruction. Associated with openness and opportunity, America produces and draws in more entrepreneurs than anywhere else.

Entrepreneurs are the heroes of creative destruction—the people with the ability to feel the future in their bones and bring it into being through sheer force of will and intellect. Entrepreneurs drive long-term growth in productivity by pursuing their dreams of building a business, launching a product, or, human nature being what it is, making a fortune. But they are seldom the easiest of heroes, or the nicest. They are almost always guilty of what might be termed imperialism of the soul: they will sacrifice anything, from their own peace of mind to the lives of those around them, to build a business empire and then protect that business empire from destruction. Great entrepreneurs are never at rest; they must keep building and innovating in order to survive. They are also prone to what Norwegians call Stormannsgalskap, or the “madness of great men.”

One of the reasons America has been so successful is that it possesses a genius for mass-producing these flawed heroes. Charles Goodyear was so obsessed with vulcanizing rubber that he condemned his family to a life of poverty and squalor, with three of his children dying in infancy. Isaac Singer was guilty of cheating his partner out of his business and choking one of his wives into unconsciousness as well as polygamy and child neglect. John Henry Patterson, the founder of National Cash Register Company, was a food faddist and exercise fanatic who bathed five times a day and once fasted for thirty-seven days. Henry Ford launched a succession of ambitious schemes for improving the world, including eliminating cow, which he couldn’t abide. In 1915, he took a ship of leading businesspeople and peace activists to Europe to try to end the First World War and “get those boys out of the trenches.” “Great War to End Christmas Day,” read a New York Times headline; “Ford to Stop It.” Thomas Watson turned IBM into a personality cult, complete with company songs about “our friend and guiding hand,” a man whose “courage none can stem.”

The ugly side of these entrepreneurs is often just as important to their success as their admirable side, just as the destruction is as important as the creation. You cannot reshape entire industries and build companies from nothing without overdoing things. These negative qualities often end up undermining the empire that they helped to create, particularly if they get worse with age. They very stubbornness that led Henry Ford to mass-produce cars before there were many roads for people to drive them on also led him to ignore the fact that American consumers craved variety. Henry Ford’s failures prepared the way for the rise of General Motors.

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *


Posted by Michael McKinney at 12:54 AM
| Comments (0) | Entrepreneurship , Leading Views

02.13.19

Finding Your Flywheel

Finding Your Flywheel

GREATNESS NEVER HAPPENS in one fell swoop—no single action. It is the result of a series of correct actions that build on each other. Jim Collins likens it to turning a giant, heavy flywheel. In Turning the Flywheel, he describes the process:

Pushing with great effort, you get the flywheel to inch forward. You keep pushing, and with persistent effort, you get the flywheel to complete one entire turn. You don’t stop. You keep pushing. The flywheel moves a bit faster. Two turns … then four … then eight … the flywheel builds momentum … sixteen … thirty-two … moving faster … a thousand … ten thousand … a hundred thousand. Then at some point breakthrough! The flywheel flies forward with almost unstoppable momentum.

The flywheel concept was first introduced in the bestselling Good to Great. In Turning the Flywheel, Collins shares practical insights and clarity about the process. You can see it at work in successful organizations, but the trick is finding your flywheel. While it your flywheel may be similar to another organization’s flywheel, “what matters most is how well you understand your flywheel and how well you execute on each component over a long series of iterations.” Collins lists seven essential steps to finding and capturing your flywheel.

Collins explains the flywheels of Amazon, Vanguard, Intel, Giro Sport Design and others. Giro’s flywheel is illustrated below. As with all proper flywheels, each step or action in sequence is the almost inevitable consequence of executing the step before it. So, in the case of Giro, by creating a great bike helmet that elite athletes want to wear, it naturally inspires weekend warriors to wear it, which in turn attracts mainstream customers, which builds brand power and allows you the resources to invent more great products. And the flywheel turns faster and with more power.

Giro Flywheel

If you understand your flywheel’s underlying architecture as distinct from a single line of business or arena of activity, you can evolve, expand, or extend your flywheel in response to changes in your environment. That is to say the underlying logic of your flywheel—what your organization is doing. If you understand that, you can apply it to other areas.

Some Rules

The very nature of a flywheel—that it depends upon getting the sequence right and that every component depends on all the other components—means that you simply cannot falter on any primary component and sustain momentum.
To sustain and renew the flywheel you need to embrace the Genius of the AND (as presented in Built to Last).
When you reach a hundred turns on a flywheel, go for a thousand turns, then ten thousand, then a million, then ten million, and keep going until (and unless) you make a conscious decision to abandon that flywheel. Exit definitively or renew obsessively, but never—ever—neglect your flywheel.

Collins also makes it clear that a flywheel operates within a context—a framework of principles that great organizations adhere to. The framework has four stages:

Stage 1: Disciplined People
Stage 2: Disciplined Thought
Stage 3: Disciplined Action
Stage 4: Building to Last

The flywheel principle operates at the pivot point from Disciplined Thought into Disciplined Action. Collins explains each stage in detail and the principles that apply to each like Level 5 Leadership, the Hedgehog Concept, 20 Mile March, and Fire Bullets, Then Cannonballs. But I found this observation interesting:

An overarching theme across our research findings is the role of discipline in separating the great from the mediocre. The only legitimate form of discipline is self-discipline, having the inner will to do whatever it takes to create a great outcome, no matter how difficult. When you have a disciplined people, you don’t need hierarchy. When you have disciplined thought, you don’t need bureaucracy. When you have disciplined action, you don’t need excessive controls. When you combine a culture of discipline with an ethic of entrepreneurship, you create a powerful mixture that correlates with great performance.

Every entrepreneur should read this because it organizes your decisions around a principle that compounds your efforts. Turning the Flywheel is a short but necessary read to help you understand your business and what can and will make it successful. Executing well on a well thought out flywheel will give you years—even decades—of success.

More importantly, if leaders communicate their organization’s unique flywheel so that everyone at every level understands it, it will bring clarity and purpose to each individual’s work. It provides tangible evidence as to their part in the organization’s success.

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *

 

Explore More

Books By Jim Collins Great by Choice



Posted by Michael McKinney at 08:12 AM
| Comments (0) | Entrepreneurship , General Business

02.04.19

Simple Techniques to Overcome Negative Emotions When Negotiating with Others

Overcome Negative Emotions

A KEY PREDICTOR of entrepreneurial success is a leader’s ability to manage relationships with investors, employees, and customers. Relationships are negotiations. We all negotiate. How well we learn to negotiate can be the difference between success and failure.

Entrepreneurs who can negotiate well are better equipped to deal with the challenges they face in relationships significant to their business.

Here we will look at one aspect of successful negotiating: our emotions.

The mishandling of emotions – especially tension and mistrust – is a major source of errors when negotiating. It can lead to miscommunication, misjudging the other party’s motives, inability to reach consensus, and more. In our book Entrepreneurial Negotiation, we explain that the best way to diffuse negative emotions is to prevent them from escalating in the first place.

Diffuse Tension Before It Escalates

At the beginning of every negotiation, there is a natural tension in the air. The higher the stakes, the higher the tension level. To diffuse it, open by conveying your sincerity and warmth with a handshake, eye contact, and a smile, as appropriate.

Other ways of reducing tension in the first few minutes are sharing airtime while projecting genuine interest, showing respect and asking for agreement on some small initial ground-rule (e.g., use of first or last names, seating arrangements, etc.).

A 2004 experiment using sociometric badges in a mock negotiation (between a corporate vice president and a middle manager) demonstrated that “tone of voice” used by participants in the first five minutes predicted more than a third of the variation in the objective and subjective outcome of a negotiation. They also found that turn-taking dynamics (who speaks when) had a strong correlation with the subjective value levels reported after the negotiation.

Still, other studies showed that similarity, also called affiliation, is a primary factor that influences personal human connection – the building of rapport between individuals. Rapport reduces stress and is the best predictor of success in relationships. As a negotiation proceeds to more difficult topics, good negotiators maintain a relaxed tone (with the appropriate level of seriousness) while respecting their counterpart’s autonomy and status.

The Power of Humor, Stories, and Metaphors

Several additional tools that are often used to reduce stress are storytelling, metaphors, and humor. The appropriate use of humor, especially, can serve as a release valve for negative emotions such as anxiety, suspicion, and anger, and can create room for people to put things in perspective. Humor can also serve as a way of acknowledging the absurdity of the moment, where parties have inadvertently locked themselves into extreme positions. Humor does need to be used carefully. If a party doesn’t understand an attempt at humor, they may be left wondering if the joke is on them. If they feel as if they are the target (or that they are being taken lightly), it will most likely make the situation worse. Finding the right balance between humor and serious intent can make it easier to deal with escalating competitive behavior.

Stories have the power to convey an important idea, stimulate a strong emotional response, and allow a release of political or interpersonal tension. They help to shift everyone’s focus from the tension in the room to the tension in the story. At the conclusion, when the story’s tension is finally released – both the listeners and the storyteller experience a stress-reducing feeling. Our brains react to stories the same way they react to true events.

Using metaphors is also effective. For example, in negotiating the break-up of a business, framing the situation as a pile of cash to be divided creates a “divide the pie” metaphor. This is likely to induce a win-lose mindset. Using a story about a “cash cow” might shift the focus to a living creature that cannot be divided, but if taken care of will produce dividends over time. This second framing metaphor would more likely induce a collaborative discussion of how to share responsibilities and allocate future profits.

Apologize Quickly and Sincerely

f you realize you have done something that has hurt the other side, you should issue an apology immediately. It is rarely to your advantage to provoke feelings of fear, anger or resentment. A sincere apology can often restore a better working context. Apology is a social ritual that shows respect and empathy to the offended person. While you cannot undo a mistake, an apology can help the other side move on. This is the opposite of what happens when a person is emotionally triggered. Experiments show that receiving an apology reduces heart rate, breathing rate, sweat levels, facial tension, and blood pressure.

Apologizing quickly and sincerely shows that you take responsibility for your actions. On your side, it can also prevent a buildup of remorse or shame caused by the fact that you hurt someone or simply as a result of having made an error. It is not easy, and quite humbling to apologize, but when done correctly it projects the inner strength of someone who is confident and aware of the feelings of others.

Even when you apologize immediately, don’t rush things. It takes time for impacted emotions to wash over the other side. The body needs time to recover and to switch from fear, anger, and anxiety to empathy and compassion. Be present and attentive. Accept the silence as OK, and don’t move on prematurely. You may need to repeat your apology, since it may not have been fully heard or absorbed the first time. Focus on your counterpart’s reactions. Wait for them to indicate that it is OK to continue.

Some mistakes are minor, and it will be easier for the other side to recover from these, even without an apology. Some will require both sides to cool off before continuing. After you have apologized and demonstrated your sincere intent to remedy the situation, you may want to revisit the item that was on the agenda when you made the mistake initially. Ask for a “do-over.” This is the ultimate “detect and respond” response: an “on-the-spot” apology that is accepted, coupled with permission to return to the negotiation.

Negotiations are fraught with tensions. Learning to reduce tension and negative emotions creates a better outcome for everyone.

* * *

Leading Forum
This post is by Samuel Dinnar and Lawrence Susskind, co-authors of Entrepreneurial Negotiation: Understanding and Managing the Relationships that Determine Your Entrepreneurial Success. They are both experts in negotiation and mediation, teach at the Program on Negotiation at Harvard Law School and at MIT, and have experience as entrepreneurs, executives, consultants, and mediators. To learn more, visit www.entrepreneurialnegotiation.com.

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *

 

Think Like A Futurist Predictive Analytics


Posted by Michael McKinney at 11:43 AM
| Comments (0) | Entrepreneurship , Problem Solving

11.19.18

William Donaldson on Entrepreneurial Leadership

William Donaldson

W

ILLIAM DONALDSON has led a full life. He was most notably a co-founder of the investment banking firm of Donaldson, Lufkin & Jenrette in 1959, served in Henry Kissinger’s State Department, was the founding dean at the Yale School of Management, served as chairman and chief executive of the New York Stock Exchange, turnaround CEO of Aetna, chairman of the SEC, and now CEO of the private investment firm Donaldson Enterprises.

Donaldson and Karl Weber extract relevant lessons for leaders in Entrepreneurial Leader. The thread that runs through his career is the entrepreneurial mindset. That mindset is “about the application of creative thinking and prudent risk-taking to build innovative, long-lasting organizations in any sector of the economy.”

There are leaders and there are entrepreneurs, but not all leaders are entrepreneurs, and not all entrepreneurs are leaders. Simply put, I believe that entrepreneurial is a mindset—a way of thinking—and leadership is a way of acting. Entrepreneurial leadership, then, describes the way such a leader behaves.

The case method he experienced at the Harvard Business School, showed him that “in many cases, the deeper you delve into a problem, the less obvious the answers are.” This realization is empowering because “since nobody really knows the one perfect solution to the kinds of real-life challenges organizations face, it’s important to have the courage to ask questions, to propose answers, to challenge assumptions, and to experiment—all of which are key elements of the entrepreneurial drive.”

As founding dean and professor at the Yale school of management, he taught a course on entrepreneurial leadership. He focused on the personal characteristics of the leader. “Of course, an entrepreneurial leader needs to know about subjects like financial management, competitive strategy, market analysis, and the like. But I think those topics are distinctly secondary. More important are the human qualities that the entrepreneurial leader brings to the job—the ability to see the world through fresh eyes; the ability to pay attention to both the big picture and the small details that define a particular situation; a high degree of personal energy, optimism, and a sense of fun; the readiness to shape and define the system in which he or she operates rather than being controlled by a system someone else has created; and, most important, a strong sense of integrity.”

By integrity, he means that they transcend themselves. They look beyond their ego. They remain true to the vision and commit to the value of individuals.

He notes that an entrepreneur is not a gambler. “The smart entrepreneur uses careful planning, intelligent strategy, and lots of hard work to minimize the risk as much as possible.”

Effective leaders must be entrepreneurial—which means getting things done, regardless of the obstacles.

Entrepreneurial leaders must have the ability to learn fast in environments of ambiguity and change, while providing clarity and coherence for those around them.

Entrepreneurial leaders have the ability to see the world a bit differently from everyone else. They have the drive to innovate—the willingness to continually experiment, to test new ways of organizing and deploying resources, to abandon outmoded approaches when circumstances change; in short, to “make all things new.”

I found this comment especially useful as it speaks to the mission here at LeadershipNow:

In the business arena, entrepreneurial leaders must think and behave as if they own the company—whether they do or not. Entrepreneurial leaders must define systems rather than be defined by them; they must adopt an ownership mentality. They understand that they must take ownership of their choices, including the smaller, day-to-day decisions they make. They must take full responsibility for them rather than attributing them to “the system” or “circumstances.” Entrepreneurial leaders also think continually about the big picture—the broader goal that everyone in the organization is supposed to be working toward—and strive to be guided not by short-term gain or personal profit but by long-term objectives that help everyone. Furthermore, entrepreneurial leaders find ways to encourage everyone in the organization to think and behave in this way, and create circumstances that help them do this.

The behind-the-scenes look at the roles he has taken on throughout his life—especially the rationale behind and the building of Donaldson, Lufkin & Jenrette—is instructive. The range of his life and career demonstrate the broad relevance of the principles he describes in this book and makes for a fascinating read.

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *

 

Explore More

That Will Never Work Learning to Lead Williams



Posted by Michael McKinney at 12:43 PM
| Comments (0) | Entrepreneurship , Leadership

11.14.18

The 8 Elements of Punk Rock Business

Punk Rock Business

O

K,  I’ll bite. What do the Ramones, the Clash, and the Sex Pistols have to do with leadership?

The title of Jeremy Dale’s book, The Punk Rock of Business, comes from a comment Bono made to Oprah about a project Dale was working on with him for Motorola. Dale and his team had performed the impossible and Bono said, “They are the punk rock of business: no long introductions, three beats and you’re in. They say they are going to do something, and then it just gets done.”

Using that as an inspiration, Dale has taken it to mean so much more. Punk is an attitude. It’s a fight against apathy and complacency. “I’m not okay with the current status quo. We’re into disruption.”

Many businesses these days are clogged up by bureaucracy that thwarts innovation, slows down creativity, and encourages mediocrity. I hate mediocrity. I’d much rather have spectacular success or fantastic failure. I believe mediocrity occurs far too often because too many people in business, particularly those in middle-management roles, are far too cautious, pessimistic, and more concerned about protecting their jobs rather than striving for greatness and being everything they could be. They are fearful of putting their heads above the parapet, so they take a play-it-safe attitude and come up with the conservative, tame, and expected proposals.

Dale has distilled the punk rock movement to eight elements. These 8 elements of Punk Rock Business were at the heart of punk rock music, movement, attitude, fashion, and culture. Elements that are wanting in many organizations.

Element 1: Have a Cause

“Punk was all about wanting something better, being clear about what that was, and making that their cause.” Have a point of view. Find something you’re passionate about and then inspire your team to deliver it. An organization’s mission statement is meant to direct every single decision. A mission statement may not be enough. You may need to create a manifesto to add substance and emotion, creating a story around the mission statement. “We should be committed to being a lighthouse brand; that is, one who shines brightly, whose position is fixed so that people can navigate their world trusting in us and our position on things.” Well put.

Element 2: Build a Movement

“Punk was attractive to like-minded people, and it galvanized that segment of the youth. Punk, more than music, was a mindset, and that attracted people.” It’s all about the people. The followers make the movement. You must get other people on board. Show your commitment to them and the mission by showing up. This is where you bring your emotional brain and not your rational brain.

Element 3: Create New and Radically Different Ideas

“Punk was completely different—never seen before jaw-dropping creation that exploded into our consciousness. No one was ambivalent to punk; you loved it or hated it.” It’s about creating new, different, and better ideas. After all, that’s what leadership is. Punk provided an avenue to express their frustration with the dead-end society that they saw at the time. “Never before had music been played at anything like two hundred beats per minute. Never before had music been played so loudly or aggressively. Never before had the lyrics to the songs been so politically charged or laid siege to taboo subjects.”

Begin by finding out what’s different about what you’re doing. What problem are you trying to solve? Radical ideas come from teams. And when they do they need to be brought to life by showing, not telling. Radical ideas are targets and so need to be protected. “Every project should have a vision and some nonnegotiables. The nonnegotiables are so important, because not only do they prevent the willingness to compromise, they also act as the catalyst for intelligent people to seek creative solutions when the inevitable challenges arrive.”

Element 4: Drive Speed and Action

“Punk was three beats, and you’re in.” Go for it. “When time is tight, great things happen.” You don’t always have to be right. “Decision-making is a portfolio. Not every decision needs to be correct.” The momentum is the important thing.

Element 5: Say It as It Is

“Punk lyrics came with a contagious honesty.” No nonsense. You have to say it like it is—but constructively. Sometimes you have to call others out, and sometime you must call yourself out. Don’t leave people wondering what you think. Speaking plainly saves time, bring clarity, and sets the performance bar where you want to set it.

Element 6: Be Authentic

“Punk gave people permission to be themselves.” Probably the only rule of being punk is: “to be yourself and be comfortable being who you are.” Surround yourself with confidants who will hold you accountable and call you out when you are being a fraud.

“Don’t just endure or play it safe. If you are, work out how you are going to stop that immediately … or, alternatively, work out how you are going to justify that to your grandchild in years to come.”

Element 7: Put Yourself Out There

“To be punk you had to make a very visible and belligerent statement; it required you to put yourself out there, say ‘this is me,’ and invite criticism. It was far more important to just give it a go, rather than to get it perfect.” Grab every opportunity to challenge yourself. Be the first to volunteer. You will be criticized. Get used to it. “You will not always get it right, but my experience is that the impact you have when you do get it right far outweighs the embarrassment when you don’t.” Are you a participant or a spectator?

Element 8: Reject Conformity

“Punk pressed the reset button.” Nonconformist. “However, it wasn’t just its nonconformity, it was the extent to which it didn’t conform that was shocking for many.” Some norms are pointless and irrelevant. “Today’s corporate world is full of mediocrity, slowness, politics, false praise, and people too scared to say it as it is. More and more employees are disillusioned with lukewarm leadership that makes their jobs dull and boring and constrains their creativity, imposing limitations rather than empowering them.”

Don’t take yourself too seriously. “Get over the show, get over your ego, and react based on the quality of work, not the superficial stuff that doesn’t matter.” Joey Ramone said they started a band because in 1974 everything was overproduced. “Being overproduced and perfectly organized kills the lifeblood that spontaneity brings.”

Humility is the X-Factor

“Punk by its very nature is aggressive and in your face.” Humility keeps you out of trouble. “Punk doesn’t need to be aggressive if you apply a degree of care and humility. If people see that you are fundamentally a good person, whose heart is in the right place, whose motives are pure, who has charm and charisma, who isn’t arrogant or conceited, who cares about people, and above all else is human and has humility, then you can apply all eight elements without worrying if you’re going too far.” Dale adds fifteen more key requirements that are needed to implement a punk rock attitude in business.

Unfortunately, I have not conveyed in this commentary the great stories that are used throughout to illustrate the 8 Elements of Punk Rock of Business. They are engaging and entertaining and really help to develop the concept. Well worth the read. The book provides a much-needed perspective on business and leadership in a very unconventional way.

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *

 

Explore More

Humility is the X-factor That Will Never Work



Posted by Michael McKinney at 07:14 PM
| Comments (0) | Entrepreneurship , General Business , Teamwork

10.15.18

Dear Founder

Dear Founder

W

HAT BEGAN AS a project to provide guidance to a select group of founders in the Webb Investment Network has been expanded and offered to founders of all types and those who need to have a founder’s mindset. The result is Dear Founder written by Maynard Webb with the help of Carlye Adler.

Maynard Webb is a Silicon Valley veteran and investor. Behind all of these letters is real-world experience from his days at IBM, eBay, Yahoo, LiveOps, Gateway, Bay Networks, and Quantum. They are organized to follow the trajectory of a company’s life cycle from getting started, getting to relevance, getting to scale, to finally leaving a legacy.

Being a founder is complicated, and with each step in the life cycle, the success stories become fewer and fewer. Webb’s wish is that these letters will help you and your team through the tough issues that most founders inevitably face.

Too often, Webb finds that founders set the bar too low. It’s uninspiring, and the company doesn’t “achieve the destiny it’s aiming for.” “I’ve learned,” says Webb, “that it is better to aim very high and not quite achieve perfection than to nail every goal and deliver mediocrity.” He encourages, “We are all capable of more than we think we are. Dream big, and execute bigger. If you are willing to dream and then work hard and execute well, you can achieve more than you ever imagined.”

Fundraising while exhausting, can make you better. “Fundraising is a lot like sales, only this time you’re not selling a product but rather shares in your company…. It can offer a window of self-reflection and a chance to tighten your story and focus on the important drivers of your business.”

There are many letters on the nuts and bolts of growing a business, but not surprisingly, many of the letters deal with the human side. It’s all about people. Here are some excerpts from several of the letters:

When You Need to Delegate

“Effective delegation means that you know that the task/project will get done with the results that you expect. At the outset, this means that you have to:

“Assess the capability and willingness of the team to do the task. Often, people will volunteer for a cool assignment, but can/will they really do it?

“Communicate what success looks like to the people you are delegating to. What is the timeline, quality, etc.?

“Ensure they know that if they encounter problems, you are there to guide them. Overall, you are still accountable for the results. Delegation is not abdication.

“Establish checkpoints to monitor progress, so you don’t get any nasty surprises at the end.

“When the team delivers, celebrate their success.

“The more confidence you have in a team or person, the less structure you need to make delegation work.”

When You Are Overwhelmed

“The important thing is to realize that it is a momentary state. By shifting into action, you can get rid of this uncomfortable feeling. Once I realize that I am feeling overwhelmed, I don’t need to actually fix everything to get rid of the overwhelming feeling; I just need a plan that I believe in and that I can start executing.”

When You Are Confusing Hubris with Boldness

“Of course everybody that comes in thinks they have a winning strategy, but when someone truly has conviction, it shows. How? It’s when someone can crisply articulate the vision, the value proposition, the market, and the potential. They have clarity on what their next steps are and what will be done with the money. Rather than downplay competitors as dumb and naïve, they explain what the strengths of each are and why these strengths will make the difference for them to outcompete this new startup.

“Here’s the one thing that signals a bold attitude that might be more counterintuitive: being secure enough to identify the parade of horrible things that can go wrong.

When You’re Accused of Working Too Much

“In staring a company, the unfortunate reality is that there’s no such thing as balance. Taking an idea to greatness requires extreme—Herculean—efforts.

“Sometimes these trade-offs will be worth the cost, and other times they won’t be. If they are not, don’t commit to doing your job halfway.

“Our work and personal lives often collide, and they will only continue to do so. The best way to make it all work is not to silo off these distinct parts, but to weave them together into a custom tapestry. If you do that, and if you are truly doing what you love, it trumps the desire for balance and achieves something better, something magical.”

When You Self-Impose Limits

“When you create limits that don’t really exist, you are justifying where you are. And where you are is never as great as where you could be.

“Generally we put more limits on ourselves than any outside force ever can.

“If there is a recipe for success, I believe that it is this: Get out of defense mode and go into wonder mode.

When You Receive Public Criticism

“I’ve come to realize that getting input—good or bad—is a blessing. It gives you invaluable information on how you are doing, and more importantly, how you can do better.

“So what do you do when you’re on the receiving end of critical reviews or negative comments? First of all, congrats—this is validation that people care about what you’re doing.”

Other letters include:

When you are selecting a co-founder
When nobody wants to give you money
When everyone wants to invest
When you need to spend your money wisely
When you need to figure out compensation for your sales team
When you need to know who owns what
When you need to have an open door
When you need to build a great board
When your first key hire leaves
When no one is excited to be here
When you need to deal with poor performers
When you have to face that your startup is failing
When you need to pick your battles
When you need to improve execution
When you need to scale
When you have just missed your quarter
When the board says they are replacing you as CEO
When you have a big payday


* * *

Of Related Interest:
  Rebooting Work: How to Make Work— Work for You

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *

 



Posted by Michael McKinney at 12:07 AM
| Comments (0) | Entrepreneurship

08.16.18

Straight Talk for Startups

Straight Talk for Startups

E

NTREPRENEURSHIP is not for everyone. It’s not an escape from the cubicle, hard work or bosses. But it is creative. It can be enriching in many ways. And if you are successful, you can believe that you did it all on your terms. And while it’s easier than ever to get started, it harder than ever to succeed.

Randy Komisar and Jantoon Reigersman bring decades of startup experience to help you beat the odds. In Straight Talk for Startups they offer 100 insider rules to bring clarity and a dose of reality to the entrepreneurial process. So whether you’re thinking of starting a business or are in the middle of managing one, this book will help to avoid (are correct) rookie mistakes.

Komisar and Reigersman begin by telling you what matters and what doesn’t. Before you quit your job, here are a few things you need to think about:

It’s hard. Because money is abundant, “it’s no surprise that the competitive landscape becomes crowded and non-economic.” It’s not uncommon for your competition to sell below cost in order to buy customers with their capital. And employees tend to act more like mercenaries than comrades in arms.

Try to act normal. “There is nothing normal about being an entrepreneur.” I loved this line: “Venture capitalists have one of the greatest jobs in the world. They get to sit across the table from passionate strangers who hallucinate the future for them.” They advise that when selling your idea: “Don’t let them know you are one of those precious lunatics hell-bent on changing the world until you’ve gotten to know them better. You don’t want to scare them off right at the start.”

Aim for an order-of-magnitude improvement. You’ve got to give people a really good reason to move from where they are quite comfortable to where you want them to be—a loyal customer. An order-of-magnitude of ten times is the minimum. Beyond that you improve your odds of success. “If you try to thread the needle with an innovation that is just good enough, you may miss [the target] entirely. But if you shoot for an order-of-magnitude change, you may still be in the game even if you miss by half.”

Most failure result from poor execution, not unsuccessful innovation. “Plenty of people confuse luck for skill. We flatter ourselves and find cause where there is none. The difference between skill and chance boils down to repeatability.” Timing matters. The elements need to line up. The authors identify six significant stages of development:

Stage 1: Idea—develop your idea and assess its attractiveness
Stage 2: Technology—build the technology
Stage 3: Product—deliver the product
Stage 4: Market—demonstrate market demand
Stage 5: Economics—prove unit economics in real life
Stage 6: Scale—now, finally, grow your business

There is a method to the madness. Don’t get ahead of yourself. Great clarification: “The creative process is essentially an execution process, not a eureka moment.

Other rules include:

  • A part-time game changer is preferable to a full-time seat filler.
  • Manage your team like a jazz band.
  • Net income is an opinion, but cash flow is a fact.
  • Avoid venture capital unless you absolutely need it.
  • Too many unanimous board decisions is a sign of trouble.
  • Success is not linear.
  • Learn the rules by heart so you know when to break them.

Komisar and Reigersman close by saying, Always ask why. Why this? Why you? Why now? Asking why will keep you grounded.

Know why this venture is important to you. Why it should be important to others. And given the low probability of success for any venture, why it is nevertheless worth failing at. Of course you don’t want to fail; success is always preferable to failure. But if you fail, will you feel you wasted your time, or that you fought the good fight?

Keep yourself grounded and your wits about you by frequently asking yourself, Why? Entrepreneurship is important because it has the power to make the world better. That is why it is worth all the blood, sweat, and tears.

If you are considering starting a business, you will do well to also read Randy Komisar’s The Monk and the Riddle: The Art of Creating a Life While Making a Living.

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *

 

Explore More

BurnThe Business Plan Killing It

Posted by Michael McKinney at 08:01 AM
| Comments (0) | Entrepreneurship

06.29.18

Born to Build

Born to Build

A
RE YOU A BUILDER?

All of us are to one degree or another. We are born to build. Building something gives us meaning and purpose. For some though, it is a need that drives them every day.
Building is a high-degree-of-difficulty task, but natural builders want the impossible assignment. They actually prefer the messiness, the problems, the barriers, the absence of supervision, the improvisation and the rush of a new customer breakthrough.

You can build something on your own or from within an existing organization. But builders know how to create demand for their ideas.

In Born to Build, Jim Clifton and Sangeeta Badal of Gallup—the people who brought you StrengthsFinder—have turned their attention to entrepreneurs and ambitions, self-motivated people that want to build something. They take a psychological approach to the subject to understand builders—who they are, what motivates them, and how they do it. With the Builder Profile 10 assessment included with the book, you can find out if you are a builder and what part you are likely to play.

The skills and the mindset of a builder will help you no matter what career path you choose.
Successful builders proactively develop behaviors that empower them to anticipate problems, overcome adversity, recognize opportunities, organize resources and take action to build something.

Gallup has determined that there are three key players or roles in the development of an organization: The Rainmaker, the Conductor, and the Expert. When all three are present in an organization or a team, the likelihood of it breaking out and booming grows exponentially. It is rare that any one person is all three. So the idea is to find partners or create a team early on that will complement your type of builder.

The Rainmaker: Aggressive, optimistic, risk-tolerant, Rainmakers measure success by profitability. They are self-confident and incredibly persuasive. They know how to energize and influence customers and employees with their vision of the future. A venture almost never works without this player. (38 years ago when I started my manufacturing business, I wish I would have brought a Rainmaker on board a lot sooner. We would have reached our goals much faster.)

The Conductor: They possess great management talent and mainly focus on the operations of the venture. They know how to get everyone working together and take pride in finding the right people for key positions. They build the venture by building its people. Hard work energizes them.

The Expert: Primarily focused on product development and research, Experts set a high bar and believe that being the best in your field is the organization's crucial distinction. Highly independent, discerning and quick-thinking, Experts never accept the status quo and constantly imagine new possibilities. They are part artist and part scientist.

The mindset of a builder incorporates four keys to building: Creating Self-Awareness, Recognizing Opportunities, Activating on Ideas, and Building a Team.

Creating self-awareness and building a team is where this book and its assessment really come into play. Through study and research Gallup came up with a list of 10 talents that influence the behaviors and explain the success of a builder. Every builder uses a mix of these 10 talents:
  • Confidence: People with Confidence accurately know themselves and understand others.
  • Delegator: Delegators recognize that they cannot do everything and are willing to contemplate a shift in style and control.
  • Determination: People with Determination persevere through difficult and seemingly insurmountable obstacles.
  • Disruptor: Disruptors exhibit creativity in taking an existing idea or product and turning it into something better.
  • Independence: People with Independence do whatever needs to be done to build a successful venture.
  • Knowledge: People with Knowledge constantly search for information that is relevant to growing their business.
  • Profitability: People with Profitability make decisions based on the observed or anticipated effect on profit.
  • Relationship: People with Relationship possess high social awareness and an ability to build relationships that are beneficial to their organization's survival and growth.
  • Risk: People with Risk instinctively know how to manage high-risk situations and make decisions easily in complex scenarios.
  • Selling: People with Selling are the best spokesperson for their business.

Your unique mix of talents will determine your role in the venture—Rainmaker, Conductor or Expert. Your dominate talents help to determine your building journey. “The way you are wired will influence not only what you build, but also how you build it. Your talents are the lens you use to look at the world. They guide how you frame problems and the solutions you generate for those problems, what you see as roadblocks and the methods you use to clear them, how you identify your goals and aspirations, and the route you take to fulfilling them.”

Importantly, once you understand the way you are wired, you will see what kind of people you need to complement your talents in order to successfully create your vision of the future and build your venture. Although it’s a romantic thought, we never do it alone.

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *



Posted by Michael McKinney at 07:57 AM
| Comments (0) | Entrepreneurship

05.18.18

Burn the Business Plan

Burn the Business Plan

I

F YOU ARE THINKING of starting a business—and apparently nine million Americans are currently thinking about it and only about 500,000 actually do each year—you will want to read Burn the Business Plan by Carl Schramm.

The highly-romanticized, high-tech startups that we read about and want to emulate are less than seven percent of all start-ups and they experience the highest failure rate of all business startups. Eighty percent disappear within five years.

Most entrepreneurs never went to college, and most did not start their companies until they were well along in their careers. The average entrepreneur is nearly forty years old when he launches, and more than eighty percent of all new companies are stated by people over thirty-five. More entrepreneurs are between forty-five and fifty-five than any other cohort, and entrepreneurs over fifty-five now create more companies than those under thirty-five. And—another surprise—the chances of a new company surviving rises with the age of the entrepreneur.

What these high-tech startups have in common with all other entrepreneurs is that they don’t follow a business plan. The detailed and rigid planning of your typical formal business plan is of little value once the business gets underway.

Just as German Field Marshal Helmuth Karl Bernhard Graf von Moltke once observed, “No plan survives first contact with the enemy,” “it is rare,” writes Schramm, “to find an entrepreneur who reports that his business plan was of much use…. Entrepreneurs must learn to dance to the market’s ever-changing tempo and rhythm. Planning doesn’t help and is mostly a waste of time.” Microsoft, Apple, Facebook, Amex, Disney, GE, Walmart, and Google are just a few examples of companies that began without writing a formal business plan.

To build a successful company, one has to be able to change direction as shifting facts and circumstances dictate. In my experience running a manufacturing company for over 30 years, Schramm is right on.

While I believe that the basics of running a business and the type of mindset that is required can be taught or presented, I would agree that you can only learn by doing. “There is no time-tested body of knowledge that will improve the probability that a startup will be successful.”

As Steve Wozniak, Marc Randolph, and many others have suggested, a great way to learn entrepreneurship is by working in a big company. “The average entrepreneur works for someone else for nearly fifteen years before starting his own business.”

Many entrepreneurs who started their own careers in large corporations regarded them as critical to their subsequent success. Most importantly, they learned the culture of business, how big companies did or did not do a good job of serving their customers, and their customers’ continuously changing needs.

Building a company takes time. Rather than flipping their companies, most successful founders work at it for the rest of their lives. When you begin everything changes. “While many aspiring entrepreneurs think that starting a company is all about one good idea, in fact, successful entrepreneurs know that their first idea was seldom what made their company successful.” And here’s something to think about: “Failure rates are considerably higher for companies that are started with the intention of a short-term sale.

Every startup has one CEO. The myth that two entrepreneurs coming together makes for a better company is just that, a myth. A realistic “look at the history of startups shows that every company, even those claiming multiple founders, had just one person who functioned as the ‘entrepreneur-in-chief.’ She is the person who sparked the idea, first articulated the vision for the company and brought others together; the person who functions as the company’s driving force, without whom the startup never would have happened.”

Another reason success as an entrepreneur favors age is that “creating a new product or service is an organic process, one that is shaped by background, experience, and acuity of the innovator.” “The average age of an inventor awarded a patent is forty-seven. The reason? Innovation involves a synthesis of accumulated knowledge, much of it subconscious, that the inventor has absorbed and compiled over his life.”

If you are aspiring to be an entrepreneur, you would be wise to read widely across many fields and disciplines. Innovators are curious and have a voracious appetite for learning.

Schramm tells the stories of Dyson, Head, Kasbar, Stebbins and others who “weren’t even sure that what they were toiling to achieve was a ‘company,’ they were just sure that they had really good ideas.

Other interesting ideas Schramm covers:

  • Franchising is often overlooked as a real entrepreneurial business and is generally not taught in colleges.
  • “You should operate with sufficient flexibility so that you are open to considering other ideas as you work on your original concept.”
  • Business plans are for investors. Most businesses become successful without venture capital and venture capital is no guarantee of success. “The average startup needs $50,000 in capital.” And this comes mostly from savings, credit cards, family, second mortgages and reinvesting revenues.
  • “An entrepreneur’s planning is fundamentally different from how managers in large companies follow well-researched and formalized business strategies. The planning process in a startup can be described more accurately as situational decision making, an imperfectly informed, just-in-time, default strategy.
  • “Entrepreneurial planning involves learning how to make critical decisions quickly, mostly about matters never anticipated, likely while relying on incomplete information.”
  • It takes time. “Of the thirty percent of startups that survive past five years, most are not profitable until they reach their seventh anniversary.”

Burn the Business Plan is a fascinating and accurate look at what it means to be an entrepreneur. It should be required reading in business schools and by anyone contemplating a startup. Schramm tells interesting stories of entrepreneurial successes and failures all of which add to the value of this book.

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *

Explore More

Think Like Amazon How Google Works



Posted by Michael McKinney at 04:13 PM
| Comments (0) | Entrepreneurship

01.26.18

A Dozen Lessons for Entrepreneurs

Entrepreneurs

T

REN GRIFFIN, who writes the well-read 25iq blog, has assembled a collection of insights for entrepreneurs from some of the most successful venture capitalists and coaches of business founders in the world.

For A Dozen Lessons for Entrepreneurs, Griffin has interviewed 35 people who have “seen more highly successful business launched than any other single group on the planet.” He offers 12 quotes from each followed by short explanations to provide clarity and context. The book is a real education that is worth taking the time to reflect on and absorb.

You will get an experiential education from investors like Steve Blank, Marc Andreessen, Mary Meeker, Paul Graham, John Doerr, and Ben Horowitz.

What follows are some of the thoughts that resonated with me:

Eric Ries: “The mistake isn’t releasing something bad. The mistake is to launch it and get PR people involved. You don’t want people to start amping up expectations for an early version of your product. The best entrepreneurship happens in low-stakes environments where no one is paying attention, like Mark Zuckerberg’s dorm room at Harvard.” (p. 36)

Sam Altman: “In general, it’s best if you’re building something that you need. You’ll understand it better than if you have to understand it by talking to a customer. Passion and a mission are more likely to exist if a business is providing solutions to problems that cause the founders personal pain. In other words, a deep understanding of a valuable customer problem and potential solutions to that problem is enhanced if the founders are themselves potential customers for the solution.” (p. 44)

Sam Altman: “Eliminate distractions. The hard part of running a business is that there are a hundred things that you could be doing, and only five of those matter, and only one of them matters more than all of the rest of them combined.” (p. 48)

Steve Anderson: “Ten years ago, you needed $5 million to start a business. Today, you need $70 and some coding skills.” (p. 53)

Rich Barton: “It’s much more powerful long-term to make up a new word than it is to use a literal word. I also like to high-point Scrabble letters in my brands if I can work them in. They are high point because they are rarely used. A letter that’s is rarely used is very memorable. Z and Q are all worth ten points in Scrabble. X is 8. They jump off the page when you read them, and they stick in your memory as interesting.” (p. 73)

Chris Dixon: “You’ve either started a company or you haven’t. “Started” means starting with no money, no help, no one who believes in you (except perhaps your closest friends and family), and building an organization from a borrowed cubicle with credit card debt and nowhere to seep except the office. It means lying awake at night worrying about running out of cash and having a constant know in your stomach during the day fearing you’ll disappoint the few people who believed in you and validate your smug doubters.” (p. 99)

John Doerr: “Believe me; selling is honorable work—particularly in a startup, where it’s the difference between life and death.” (p. 102)

Jim Goetz: Many of the entrepreneurs that we back are attacking a personal pain.” (p. 116)

Paul Graham: “If you want to start a startup, you’re probably going to have to think of something fairly novel. A startup has to make something it can deliver to a large market, and ideas of that type are so valuable that all the obvious ones are taken. Usually, successful startups happen because the founders are sufficiently different from other people—ideas few others can see seem obvious to them.” (pp. 126-127)

Reid Hoffman: “So many entrepreneurs are worried about protecting their precious ideas, but the truly valuable thing is that you’re in motion, you have momentum, and you are gathering all the necessary resources to make it happen.” (p. 158)

Reid Hoffman: “The network of people around you I what extends your ability to be effective regarding expertise and reaching your goals. Put yourself out there and get feedback. Don’t be afraid to take a risk. Another huge thing to emphasize is the importance of your network. Get to know smart people. Talk to them. Stay current on what’s happening. People see things that other people don’t. If you try to analyze it all yourself, you miss things. Talk with people about what’s going on.” (pp. 160-161)

Ben Horowitz: “Sometimes an organization doesn’t need a solution; it just needs clarity.” (p. 168)

Vinod Khosla: “The single most important thing an entrepreneur needs to learn is whom to take advice from and on what topic. Ask different questions of different people, both those who have been successful and those who haven’t.” (p. 179)

Keith Rabois: “As you get into the unchartered territory where you don’t actually have any intellectual background, you need perspectives from people who are very different from you. At that point, it’s actually quite valuable to have people who are diverse.” (p. 255)

Keith Rabois: “First Principle: The team you build is the company you build.” (p. 254)

Fred Wilson: “Reputation is the magnet that brings opportunities to you time and time again. I have found that being nice builds your reputation.” (p.302)

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *

 

Posted by Michael McKinney at 06:11 AM
| Comments (0) | Entrepreneurship

01.22.18

Killing It! How to Run a Startup in a Healthy, Joyful Way

Killing it

A

MERICA WAS FOUNDED by entrepreneurs. Along with all of the other freedoms granted to its citizens, the freedom to risk and to fail encourages our culture of innovation and entrepreneurship.

Entrepreneurship has never seemed so popular as it is today no doubt because it is easier than ever to start a company. Especially in the tech sector, barriers to entry have fallen, and there is greater access to risk capital for startups. Steve Anderson, the founder of Baseline Ventures, said, “Ten years ago, you needed $5 million to start a business. Today, you need $70 and some coding skills.” It is a golden age for entrepreneurs.

But with the implied success is a dark side that is rarely talked about. The cost is often the entrepreneur’s physical and mental health and the impact their work has on their family and friends. Sheryl O'Loughlin tackles this head-on in Killing It! The entrepreneur’s personal life is often the hidden cost of building an uber-successful career or business.

Sheryl who has taught entrepreneurship at the Stanford Graduate School of Business understands the ups and downs of being an entrepreneur. She served as the CEO of Clif Bar, was the Co-Founder and CEO of Plum Organics and is now CEO of REBBL. In Killing It! she offers empathetic support for entrepreneurs with candid discussions about her own experience and those of other entrepreneurs she has known.

Many people start a business without really knowing what they are getting into. Starting a business for money is a bad bet since around 95 percent of startups fail. There needs to be a real love for the problem you’re trying to solve. Professor, social entrepreneur and investor Will Rosenzweig, told Sheryl, “Many thought they were going to launch a business coming out of school, not necessarily to solve a problem, but the problem they were trying to solve was their own unemployment and livelihood.”

Execution

Once you get past the idea, execution is everything. “It’s this build phase that catches many entrepreneurs by surprise—after so much excitement; they’re shocked at how mundane it all is. Remember the Buddhist saying, ‘After enlightenment, the laundry.’ Oh, and how much laundry there is.”

Sheryl says you have to make others love your business as well and connect to the company’s purpose—and it’s ongoing. You do that by inviting others to be part of the story. You help others to connect their personal passions to the company’s purpose. You and your team need to live the experience your customers have with the product. You need to be a leader that models love, compassion and care and hire people that can do the same.

At the same time, love can blind you to realities. So “let reality in,” she cautions. “You don’t have to love every moment, but you do have to love enough of them.

Entrepreneurs believe they have to do it all. Show no weakness. But we do have weaknesses. We need to talk to each other. “When entrepreneurs don’t rely on one another, they don’t harness the power of possibility. Too often we approach our work from a mind-set of scarcity and not one of abundance—a mistake that holds us back. The entrepreneurial profession requires that a person be vulnerable in order to remain healthy, and it’s critical to have a space in your life with others that allows for that.” When it comes to running your own company, business and personal issues are all intertwined.

Friendships

Hang on to your friends. “Friendships are crucial for the emotional well-being of an entrepreneur, but they are often the first thing to hit the chopping block when things get busy.” There are three good reasons for this:

  1. It’s Good for Your Business. Entrepreneurs can easily become myopic. “The point is, you have to stay connected to the world outside your narrow one in order to make sure your ideas are still relevant—not according to some marketing study or other, but according to common sense.”

  2. It Helps Maintain Your Full Identity. “You are not your startup. Being a friend or a family member forces you to take on that identity. You can’t just take in the relationship; you have to give, too. Valuing these relationships reminds you that it’s not in fact all about you. Being a friend offers a buffer against narcissism and obsession. Remember that the intensity that entrepreneurs are so susceptible to must be guarded against so that it doesn’t become destructive. If you’ve been spinning all day long about a decision, just sitting with someone else and offering your attention and care to them can pull you out of that dangerous headspace.”

  3. It Helps Heal You (and Them). “There are dozens of studies that show the friendships are good for our health. Choose a friend you trust and open up to him or her. Write down a list if your greatest fears with your business and share them.”

Risk-Taking

I’ve risked it all is not a good strategy. “A skilled entrepreneur is the one who will assign risk to somebody else. The entrepreneur will that the resources when they are there. Would you go climbing without the proper gear? Probably not, and you shouldn’t approach business any differently. Entrepreneurship is about minimizing risk.”

You need a Plan B because most of the time you will need it. Most ventures will fail. “You can’t make the mistake of thinking you’ll beat the odds just because you have a fancy degree, stellar experience, and great contacts.”

Self-Worth

We are conditioned to believe that money equals success. It’s vital, but your self-worth isn’t tied to the company’s net worth. “To keep a healthy self-worth/net worth separation, you have to continually ask yourself what role money is serving in your endeavor? Is money becoming your identity?” What are you proud of? We talk about family values, but they aren’t as easy to measure as money.

Your self-worth is probably the most important message of her book. Self-worth “is the quality that must be the strongest and most fight-ready before you start a company.” No matter what happens, you are not the company. “What must endure is a deep feeling that you are living in line with your values, that you are fundamentally grounded. You have to have resilience, and you have to know that you can fall down, get back up, and wipe yourself off, aware that deep down you are okay. Without this strong sense of self-worth, no matter how supportive your partner or your kids or your friends, no matter how bold or humble you are, you are at risk, even if your company isn’t.”

Most new businesses fail. And most entrepreneurs would do it all over again. But if you know up front the dark side of entrepreneurship, hopefully, the journey will end up happier and healthier for you. Before you start a company, think of entrepreneurship in terms of your life as a whole. Invest in your wellbeing. Killing It! is a great place to start.

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *

 

Explore More

Dear Founder Build Your Dream Business



Posted by Michael McKinney at 03:39 PM
| Comments (0) | Entrepreneurship , General Business

01.09.17

Shoe Dog: How to Succeed in Business with a Little Luck

Shoe Dog

PHIL KNIGHT'S memoir about creating Nike, Shoe Dog, covers the time from his “Crazy Idea” to going public in 1980. It is a down-to-earth account of the sacrifices and struggles, failures and successes of what it takes to succeed in business.

Any would-be entrepreneur would do well to read it before venturing out on their own.

Knight says that the act alone is the destination. “Let everyone else call your idea crazy . . . just keep going. Don’t stop. Don’t even think about stopping until you get there, and don’t give much thought to where ‘there’ is. Whatever comes, just don’t stop.” And that’s different from “giving up” as he explains: “Sometimes you have to give up. Sometimes knowing when to give up, when to try something else, is genius. Giving up doesn’t mean stopping. Don’t ever stop.”

He admits to the stress of it all. “The years of stress were taking their toll. When you see only problems, you’re not seeing clearly. At just the moment when I needed to be my sharpest, I was approaching burnout.” In the end he gives credit to hard work and luck. It’s not uncommon to see the IQ of successful entrepreneurs rise at least 50 points as they become experts on nearly every topic. But quite candidly, Knight writes:
Luck plays a big role. Yes, I’d like to publicly acknowledge the power of luck. Athletes get lucky, poets get lucky, businesses get lucky. Hard work is critical, a good team is essential, brains and determination are invaluable, but luck may decide the outcome. Some people might not call it luck. They might call it Tao, or Logos, or Jñāna, or Dharma. Or spirit. Or God.

Put it this way. The harder you work, the better your Tao. And since no one has ever adequately defined Tao, I now to go regularly to mass. I would tell them: Have faith in yourself, but also have faith in faith. Not faith as others define it. Faith as you define it. Faith as faith defines itself in your heart.

Shoe Dog is an amazing story of how he made that luck happen.

2016 best book pick

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *


Explore More

12 Lessons for Entrepreneurs Dear Founder

Posted by Michael McKinney at 08:03 AM
| Comments (0) | Entrepreneurship , General Business

06.17.16

Why the Rules of the Entrepreneurial Game Are Changing

Steve Case

THERE WAS A TIME when AOL was how most Americans got online. Co-founded by Steve Case, American Online at its peak handled nearly half of U.S. Internet traffic and was the first Internet IPO. From his unique vantage point, Case shares his playbook for the future in The Third Wave.

Case believes we are now entering the Third Wave of the Internet. The First Wave was building the Internet. The Second Wave was building on top of the Internet. And the Third Wave is integrating the Internet in seamless and pervasive ways throughout our lives.

Third Wave

Leading on the Third Wave of the Internet

The Third Wave is about leveraging partnerships. Entrepreneurs of the Third Wave will spend a great deal of time focused on things other than tech as they work to connecting the Internet to everything else. It will be a matter of connecting ideas to create context.

“The entrepreneurs of this era are going to challenge the biggest industries in the world, and those that most affect our daily lives. They will reimagine our healthcare system and retool our education system. They will create products and services that make our food safer and our commute to work easier. The Third Wave of the Internet will be defined not by the Internet of Things; it will be defined by the Internet of Everything. We are entering a new phase of technological evolution, a phase where the Internet will be fully integrated into every part of our lives… As the third wave gains momentum, every industry leader in every economic sector is at risk of being disrupted.”

For example, education will be more personal, more individualized, and more data driven. “Education innovators were often too focused on technology in the First Wave, and too much on content in the Second Wave. The winners in the Third Wave will leverage technology and focus on great content, but also understand the importance of context and community.”

Case believes that if you are to start a successful company in the Third Wave it’s going to come down to partnership, policy, and perseverance.

Can You Work with Others?

Your partnership skills may very well be the determining factor in the success or failure of your product. Partnerships help to bring credibility, momentum and a sense of inevitability.

Can You Work with the Lawmakers?

The government is a key force in the Third Wave. Third Wave entrepreneurs will need to figure out how to work with governments. “No matter how good an idea, a Third Wave company that lacks a clear strategy for policy is a dangerous gamble for investors. It is not that success is impossible, but the odds make it a difficult bet.”

Are You Adaptable?

Of course perseverance is critical in nearly everything of any importance. But Third Wave entrepreneurs will need to have a special kind of perseverance in a changing world to manage tensions. “The winners of the Third Wave will be those who chase big-impact ideas with a sense of urgency—but also methodically and diplomatically. It requires a fresh perspective and the ability to look a new paradigms without being burdened by legacy dogma.” He adds, “Third Wave entrepreneurs must find a way, then, to bring both viewpoints to bear—the nuanced perspective of the defending incumbent and the relentlessly disruptive mind-set of an entrepreneur on the attack.”

In the Third Wave innovation can happen almost anywhere—anywhere there are experts in the field your are trying to disrupt. “During the Third Wave, though products will be tech-enabled, they won’t be tech-centric. They’ll use apps, but the product won’t be an app. And so the benefit derived from being surrounded by the tech world won’t be as high. Instead, being surrounded by experts in the industry you’re trying to disrupt may reap the biggest dividends.”

Case makes a distinction between “startups” and “small business” especially where policy is concerned. While startups are businesses that can scale quickly and disrupt an existing category, small businesses are focused on steady growth in the long term. More to the point: “The difference between the two is reflected both in the kinds of problems they are trying to solve and in their effect on the broader economy. Indeed, it is not small businesses but new business startups that account for nearly all of the net new job creation in the United States.”

Collaboration is Key

On a final note, Case reiterates: “Entrepreneurs as ‘Soloists’ will be replaced by orchestras playing a stronger, more credible tune. If you want to go far in the Third Wave, you must go together.”

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *



Posted by Michael McKinney at 06:49 PM
| Comments (0) | Entrepreneurship , General Business , Government

01.26.12

Leading Views: Resilience

Leading Views Resilience

Leading ViewsIN ANY BUSINESS, things never go according to plan. And we make mistakes. We always will. The trick is learning from them and making the right course corrections.

Norm Brodsky and Bo Burlingham, authors of Street Smarts say that the essential quality for business success is resilience—“the ability to bounce back from failure—to turn around a bad situation—to profit from your mistakes.”

For the benefit of first-time entrepreneurs the offer four points that lead to business success:

Point One: Those who persevere win. Be resilient and welcome failure. That’s how you become a better businessperson.

Point Two: You learn by refusing to make excuses and looking inside yourself for the reason things have gone wrong.

Point Three: Focus and discipline are more important than identifying opportunities, but they have to be balanced with flexibility.

Point Four: The solutions are seldom right in front of you. You need to learn how to spot them out of the corner of your eye.

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *

 

Explore More

Resilience Is Key Bounce Forward



Posted by Michael McKinney at 09:52 PM
| Comments (0) | Entrepreneurship , Leading Views

01.08.09

One More Time: Resilience is Key

Resilience Is Key

IN The Knack, a book for entrepreneurs, Norm Broadsky and Bo Burlingham respond to the question, “What does it take to be a successful entrepreneur?” The most important quality is resilience. “I’m talking about the ability to bounce back from failure, to turn around a bad situation, to profit from your mistakes. They continue:

That’s because everybody makes mistakes, plenty of them. What’s more, we keep making them as long as we’re in business. Sure, we like to think we’ll eventually get so smart we won’t make mistakes anymore. Forget about it. You’ll never stop making mistakes. Hopefully, the new ones won’t be the same as the old ones, but they’ll be equally painful. They’ll bug you just as much. They’ll make you just as mad. As upset as you get, however, it’s important to bear in mind that failure is still the best teacher around. You’ll do fine as long as you’re open to the lessons it’s trying to teach you.

And a concluding thought from an article in the New York Times, Innovation Should Mean More Jobs, Not Less. Geoffrey A. Moore, author of Dealing with Darwin, comments:

America is probably the best culture in the world at failing,” he said. “We’re willing to navigate in a fog and keep moving forward. Our competitive advantage tends to be at the fuzzy front end of things when you’re still finding your way. Once the way has been found, we’re back at a disadvantage.

* * *

Like us on Instagram and Facebook for additional leadership and personal development ideas.

* * *

 

Explore More

Bounce Forward LeadingViews Resilience



Posted by Michael McKinney at 12:29 AM
| Comments (0) | Entrepreneurship , Personal Development



SEARCH THIS BLOG


ADVERTISE WITH US



Entrepreneurs

Leadership Books
How to Do Your Start-Up Right
STRAIGHT TALK FOR START-UPS



Explore More

Leadership Books
Grow Your Leadership Skills
NEW AND UPCOMING LEADERSHIP BOOKS

Leadership Minute
Leadership Minute
BITE-SIZE CONCEPTS YOU CAN CHEW ON

Leadership Classics
Classic Leadership Books
BOOKS TO READ BEFORE YOU LEAD




Email
Get the LEAD:OLOGY Newsletter delivered to your inbox.    
Follow us on: Twitter Facebook LinkedIn Instagram

© 2020 LeadershipNow™

All materials contained in https://www.LeadershipNow.com are protected by copyright and trademark laws and may not be used for any purpose whatsoever other than private, non-commercial viewing purposes. Derivative works and other unauthorized copying or use of stills, video footage, text or graphics is expressly prohibited.