Successful Startup 101: December 2014

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What's the Difference Between Success and Failure? TIME. by Michael I. Kaplan How to Explain a Complex Product Quickly & Effectively, by Tom Cox How to Know If Your Prospecting Email Message is Effective, by Jill Konrath When Adversity Hits, by Jeffery Fry 5 Fails Agile Entrepreneurs May Regret and Never Recover, by Taffy Williams All You Need To Know About Hiring For A Startup, by Steven Corcoran The Marketing Bulls-Eye: What’s Missing from Most Startup Marketing Campaigns 5 Ways to Win, presented by EY 5 Mistakes Founders and Business Owners Make, by Bill Rice The Road to Hell is Paved with Details,

by Ian Jackson

Born Global or Die Local: Building a Regional Startup Playbook, by Steve Blank

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From Zero to Thousands: 5 Steps to Get Your Social Media Up and Running, by Rachel Wisuri Startups: Grow Fast or Die Slow [VIDEO],

by Ronald Barba

4 Signs It's Time for Your Startup to Grow Up,

by Robert Sher

Want to Give Your Startup a Tactical Edge?

Go Paperless from the Start, by Ingrid von Stein Managing the Numbers of a Seasonal Startup: When to Spend and How Much, by Greg Coleman 10 Incentives For Entrepreneurs To Bootstrap Their Startup, by Martin Zwilling Are You Suffering from Small Business Success? By Allison Kelly Infographic: How to Make the Leap from Employee to Entrepreneur, by The Founder Institute Must See Movie For Entrepreneurs: Tommy Boy 10 Ways Entrepreneurs Fail Their Way To The Top, by Martin Zwilling

THE EDITOR

LETTER FROM

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s the end of December nears, many people are busy and overwhelmed. Whether you’re busy buying Christmas presents or trying to wrap up things for your business to prepare for next year, the end of the year can be hectic.

With all of the chaos and running around, it’s easy to forget about taking a few moments to yourself. Not only is it healthy to take a break, but allowing yourself to take a break can give you the strength to continue forward, accept anything that comes your way and reflect on what a successful year it has been.

Celebrating Victories During your time of reflection, you should cut yourself some slack and celebrate any victories you may have had the joy of encountering throughout the year.

Celebrate the client who you swayed to say yes instead of no; bask in the fact that you have launched or startup or the fact that you’ve finalized a date for launch; give yourself a pat on the back for gaining 500 new followers on your business’ Facebook page.

Allowing yourself time to celebrate and enjoy some of the victories you’ve had for your business - big or small - will make you feel good about the choices you’re making. It can give you a little inspiration or motivation. End of the year preparation can cause a lot of stress, but knowing what you have to look forward to can open the door to new ideas and excitement.

LETTER FROM

THE EDITOR

Whether your successes have been big or small, thinking about them can open up your imagination to a world of possibilities.

Accepting and Learning From Setbacks Maybe you only had a few victories to celebrate but quite a few setbacks to dwell on. Before you begin dwelling on a failure you’ve had - don’t.

It isn’t healthy or productive to sit and think about why you failed in a certain situation or why something happened to you that shouldn’t have. Regardless of what setbacks you faced in 2014, the only thing you can do is now is allow yourself to learn from your mistakes and move on.

Looking back at some of the setbacks you’ve encountered is healthy if you aren’t dwelling. Ask yourself questions about each situation to help find a better solution. What could you have done differently? If the situation were to occur again, what steps would you take to ensure a better solution? If the issue was with your products, brand or business in general, how have any of these issues changed since then?

Understanding your setbacks and failures can help you look forward instead of dwelling on the past. If a tragic situation occurred in 2014, the chances of it happening to you twice are slim because now you have an effective solution and way of handling things differently.

Whatever failures you may have faced in 2014, you have nowhere to go but up in 2015.

Planning Ahead As you’re scurrying around buying gifts and getting things ready for 2015, be sure to write a potential plan for the upcoming year.

Planning ahead can allow you to write down any situations you may foresee, possible new products, new marketing tactics and more. If you are hoping to hire more employees or have your startup launch planned in 2015, write a synopsis of how you anticipate each situation will occur. If you begin planning for any future issues or changes, then you will be able to prepare better for when these things actually happen. Some other helpful preparations to include in your plan can be:

Preparing your business for tax season or hiring a tax professional

Holding any meetings with your employees or co-founders to get any additional help in planning for a successful year

Go through your contracts with your current clients so that you can ensure their loyalty for 2015

When you look towards the future, you want to look with confidence and plan for success. Reflect on 2014, plan for 2015 and prepare for an exciting and successful year!

All The Best -

Tabitha Jean Naylor Editor & Publisher

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What’s the Difference Between Success and Failure? TIME.

By Michael I. Kaplan

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The truth is successful people fail much more often than those who are not successful. However, unlike those who try and fail – then subsequently give up without ever trying again – successful people overcome those failures with renewed determination until they finally realize their dream.

For this reason, believing successful people have a magic recipe for success that also immunizes them from failure is an outright lie. Once I prove this, and I will, please put this lie at the top of your “Things to Forget List” forever.

When it comes to the subject of success and failure, humanity in general tends to be a fair weather friend.

When you tell someone your dreams they might say “You have no chance to succeed.” If you do fail the first time out they’ll say “I told you so.”

When your perseverance pays off and you finally succeed they’ll probably say “I knew you could do it” – then promptly forget all the previous failures that brought you to this point.

One of the fundamental philosophies underlying this mindset is the belief that life should somehow be easy.

Typically, when a person says a particular task is going to be too difficult, what they are actually saying is “the task is going to be too difficult for me,” thus elevating difficult to impossible.

If you believe a task is too difficult, my first question to you would be, “Did you think it would be easy?” You might respond with, “No, but I didn’t think it would be this difficult.”

Now the truth comes out; you thought it would be easier. Had you predicted the task at hand would be difficult – but the reward would be worth the effort – you would be right on track.

At this juncture I feel compelled to admit to you just how much I hate the word “failure,” especially in light

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of the words’ contemporary usage. In my experience – and the point I try to make to those who use the word “failure” so freely – a failure constitutes an absolute loss from which no further action follows, and from which nothing can be learned.

Attempting to jump the Grand Canyon in your family vehicle would fit neatly into this category: zoom, whoosh, splat and done. You failed.

However, if you unsuccessfully attempt a task but still manage to gain valuable insight and knowledge, and then apply that knowledge to your next endeavor, can you honestly say the first attempt was a complete failure?

To a fault, those who have pursued their dreams and won will tell you they learned as much from their “failures” as they did from their victories. To illustrate this point, consider the following examples: 1. Bill Gates: Launched his first start-up, Traf-O-Data, in 1972 to automate the transfer of data collected from roadway traffic counters to transportation engineers. Great concept but it failed miserably.

Gates and his partner Paul Allen learned from the experience and created Microsoft. The rest is history.

2. James Dyson: The brilliant inventor of cutting-edge vacuum cleaners spent 15 years creating 5,127 prototypes before coming up with a marketable product ... all while his wife gave art lessons to keep food on the table and a roof over their

heads. All failed the test until # 5,128. Dyson, now a billionaire many times over, never lost sight of the dream.

3. Steve Jobs: Remember when this computer guru launched the “LISA”? Most people don’t.

It’s sales performance was so abysmal it got Jobs fired from the very company he founded.

He launched another company: NeXT. It failed as well due to hardware issues, but the software division was bought

by Apple and Jobs started back at ground zero. His

motto was “failure is feedback,” which is why history will remember Steve Jobs as the genius he truly was.

If you take some time to research the back-story of those you consider to be successful, you’ll undoubtedly find a reoccurring theme: many were homeless, bankrupt and suffered a number of “failures” before finally achieving their dream.

The difference between success and failure is only a matter of where on the timeline you decide to stop trying.

About the Author Michael Kaplan is a military veteran, serial entrepreneur and author. If you enjoyed this article, see his most recent book: The Prior-Service Entrepreneur: Providing Military Veterans with the Competitive Skills to Start a Successful Business. You’re invited to connect with Michael on Twitter and Facebook as well.

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How to Explain a Complex Product Quickly & Effectively

By Tom Cox

What Does it Do Exactly?

As the world grows more and more complex, so too do the products and services we use. At a fundamental level, very few humans understand how our modern world works.

What makes a plane fly? How does WiFi work? Where does plastic come from? Where is the Internet?

Anytime we are exposed to a category-defining product, we inherently have difficulty understanding what it is and why it is valuable, let alone how it works.

In 2011, I had the task of explaining a product that had no category before it existed. This product combined several very large, very expensive products into one box. But it also created a connection between the device and an Internet-based remote monitoring software suite. Beyond that, it included step-by-step instructions for novice technicians to conduct tasks normally done by seasoned engineers. And finally, it used a smartphone for the user interface. All of this in one box – and being presented to an industry that abhors change.

The mistake I made was trying to explain ALL of it at once whenever I evangelized the product.

Think about how Steve Jobs introduced the iPhone. He explained to the audience that Apple was introducing three new revolutionary products: •

A widescreen iPod with touchscreen controls

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A cellular phone

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Breakthrough Internet communications device

Steve explained the iPhone in a way that people at the time could grasp. It was one device that combined three new products. He put a lot of effort in building analogies Successful Startup 101 Magazine

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to existing technologies, and then slowly, carefully explained the most important new characteristics.

In fact, the iPhone had more than 100 new features and capabilities that were never mentioned during his demonstration. But people eventually figured them out once they had the iPhone in their hands.

Six Tips For Explaining Complex Products Getting your audience to buy in to your vision for a product is the most important task you have as a founder or product manager. Here are some tips on how you can explain your complex product to customers, investors, and co-workers.

1. Start With Your Vision When you evangelize to an audience, always start with your vision. Explain why you created it – what gap it fills, what it does like nothing else, and why customers would miss it once they have it.

great book to help with this concept is Start With Why by Simon Senek. His book is a core pillar in my philosophy of how product evangelism should work.

2. Put Yourself In Your Audience’s Place The worst thing you can do is lose your audience during your explanation. Think about someone walking you through a product or technology you’ve never seen before. Imagine someone explaining to you how Warp Drive engines from Star Trek worked The best way for you to learn would be through analogy.

As an exercise, imagine how you would explain how television works to someone from Medieval times.

You’d have to explain electricity, radio signals, cameras, microphones, and so on. What analogies could you use from their era – from their understanding of the world?

Remember they are likely hearing something they’ve never heard before, and they’re probably skeptical of your claims. They’ll wonder why it was never done this way before. They’ll want you to reassure them this product is a better way to do things, and that you know what you’re talking about.

3. Walk Your Audience Through The Story Take your time walking your audience through the product. One mistake I see a lot of product evangelists make – the same one I used to make – is they get so used to talking about their product they forget that most of the folks they meet have no context for the product.

You want your audience to understand the purpose of your product. Start with Why, and then take them through the How and the What. This way they’ll immediately know the problem you’re solving so they can put context around what it does and how it works. A

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As evangelists talk more and more about our product, they start making assumptions that their audience understands industry jargon, acronyms, and concepts that are linked in the product that may not have been linked before. For example, the product I mentioned above combined multiple

test and measurement devices, remote monitoring, and training workflows into one product. I should have started with one of the features and key in on that, then tell the rest of the story after that concept was understood.

For people in the telecommunications industry, they know all three of these references – Google Fiber, Cisco and Comcast. In one sentence I get the message across in a way the audience can quickly understand by drawing on existing examples.

Take your audience step-by-step through the story.

Show them one part of what your product does. Then once they’re comfortable with that, move them to the next part.

6. Create World-Class Demonstrations & Explanation Videos

4. Go Slow Give your audience time to process, understand and digest what you are telling them. Evangelists are naturally excited when they talk about their product.

And when we’re excited, we tend to talk fast because we want to get all of it out.

You will lose your audience if you go too fast. If they miss an important point because they’re still processing the last point, they might give up on understanding the concept. So give them time to think about what you’re saying.

5. Use Analogies Carefully I once heard someone explain a product they were building as “Facebook minus Twitter with a bit of Instagram and Snapchat.”

I had no idea what they were talking about. When you use an analogy, use one at a time, and make sure it’s a solid logical connection. Facebook, Twitter, Instagram and Snapchat all do a lot of things. Which components were relevant in this analogy?

One of the products I evangelize now is called Gigabit Passive Optical Networking, or GPON. Without explaining how it works, I focus on creating an analogy.

“A picture is worth a thousand words, but knowing the most important 20 words is worth a thousand dollars” The fastest and most compelling way to get someone to understand your product is to show them what it can do for them. The products that are adopted the fastest are the ones that are most easily understood. This is true for complex products as well. A well-done demonstration along with a highquality explanation video are ways to absolutely nail home the point.

Show the top three things your product does in your video or demo, and let the audience explore what else can be done on their own.

About the Author Tom Cox is the founder of Soldier to Startup - a resource for veterans wanting to learn how to start and run their own businesses. He studied Nuclear Engineering at the University of Maryland, has an MBA from Georgia State University, and served with honor in the US Army for 6 years as a Combat Medic and Satellite Controller. Tom worked in the Intelligence community and Satellite industry for 10 years before starting and running his first startup for 4 years. He’s now hooked on entrepreneurship and is currently involved in multiple startups and businesses. You can find his website at www.soldiertostartup.com.

“It’s as fast as Google Fiber, half the cost of Cisco, and 1000x more reliable than Comcast.”

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How to Know If Your Prospecting Email Message is Effective

By Jill Konrath

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alespeople spend an inordinate amount of time developing cold call emails, hoping they’ll create the perfect message that will get prospects to say, “Yes! I want to meet with you immediately.”

That would be great, but it takes a lot of practice to find the best way to pique your prospects’ interest. Here are 3 ways

to evaluate the effectiveness of your prospecting email:

1. Self-evaluate: Send the email

to yourself, then read it “as if” you were your prospect. Be brutally honest with yourself. Would it pique your curiosity and get you to respond? Or, would you delete it?

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2. Ask a trusted client for feedback: Send the email to a client – someone who already knows you and roots for you. Ask for honest feedback.

3. Use it on real prospects: Don’t worry if it’s not perfect – just treat it as an experiment. Always be thinking about ways to improve your message.

So when you’re worried about email effectiveness – just test everything. That’s the only way you’ll know. And remember, one email is not your only chance to get the business. It’s only part of an 8 – 10 touch campaign. You’ll have many more chances to try and engage a targeted prospect.

For more information about how to write emails that get meetings, download the Email Sales Kit. About the Author Jill Konrath is an internationally recognized sales expert, keynote speaker and author of three bestselling books: Agile Selling, Selling to Big Companies and SNAP Selling.

To accelerate your sales, check out all the free resources on her website: http://www. jillkonrath.com/sales-resources * This post originally appeared on Jill Konrath’s website and is republished here with permission.

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When Adversity Hits

By Jeffery Fry You know in business as in life in general, adversity hits. We are all met with adversity from time to time, but how we handle it makes us or breaks us.

As Ben Johnson once said, “He knows not his own strength that has not met adversity.” So in saying, I thought this little story about some friends adversity changed them might shed some light on how you might handle the next hurdle you come across.

Four friends went fishing. They found a perfect campsite in a pine grove next to a river that shimmered with promise. As fast as they could, they set up their big tent, stowed belongings, and set off eagerly down the river with their rods and reels.

When they returned to their campsite a few hours later, tired but happy, they stood open-mouthed in disbelief. There was a big empty space where their tent had stood. It was gone!

A quick search showed that everything else was still there -- stove, tools, food, sleeping bags, etc.

Their stunned confusion soon changed to anger and a storm of questions: Why did someone take the tent and nothing else? Was a tent all the thief needed? Did they interrupt him so he couldn’t finish the job? Or would he soon return for more?

Fortunately, they still had their Coleman stove, frying pan, and eating utensils -- all the tools they needed to cook their fish and eat it. And they still had their sleeping bags against the chilly night air.

Over dinner and late into the night, they sat around the campfire, debating the significance of the missing tent.

At peace at last, they climbed into their sleeping bags, gazing up at stars instead of canvas. Being

city people, they rarely got to see stars up close and personal. That night they slept more deeply than they had since they were babies. They had realized that life is inexplicable.

All of us have sudden changes in our life that are the equivalent of having the tent stolen from over our heads. We invest ourselves heavily in a project that fails. We lose a job, become ill or go through a life crisis. But as long as we still have the basics such as courage, faith, friendship, the ability to care and laugh and hope, we still have the tools we need for life.

The thieves of life can’t steal our enthusiasm and curiosity, our ability to care and love and be loved. We have to make a choice to give those up willingly.

The moral: Someone will steal your tent every single time! Expect it, and be grateful that you still have the basics. Look up and enjoy the stars like the fishermen did. You may find new joys and opportunities that you never noticed before. In business, you will sometimes have your tent moved.

How you react will ultimately determine your success or failure.

About the Author Jeffrey Fry has over thirty years of high technology business experience within Fortune 250 technology companies as well as helping over two dozen startups develop and market their products. Mr. Fry is considered an expert in marketing, sales, social media, and goto-market strategies. Mr. Fry re­ceived his BS in Electrical Engineering from Lafayette College, and attended St. Edwards University as part of his MBA studies.

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5 Fails Agile Entrepreneurs May Regret and Never Recover

By Taffy Williams

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ailure can be a learning experience and recovery is common for many entrepreneurs. Some of the business: after all, you can rebuild a business.

It is often hard to reach a lifestyle balance when so much time and energy are required. Travel may take you away for much of your life. You are spending excessive time trying to get the business off the ground and then you continue because the business needs constant care to grow. There are a thousand reasons entrepreneurs find their time slip away. The excuses are all valid and finding that balance can require more effort than building the business. The reality is that time does not stand still. The following

are a few things you may want to try and hold near and dear. Their loss is something you may never recover and you may regret having never spent more of that valuable time holding on to these.

1. Time: You will never recover tomorrow

and each day you grow older. Things you always thought would be fun, wanted to see, or dreams of doing something slip away. There is never enough time to get to everything especially when you are so motivated in building your business. Consider finding one or two of these special things could be added to Successful Startup 101 Magazine

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your to do list. Why lose all of them!

2. Family:

People do not live forever, an important fact to remember. The recent death of the husband of a friend points to how quickly loved ones can vanish. Your children grow and leave home. You may miss those precious times watching them in school events, seeing them date, or going on family outings.

If you are not attentive, your significant other may grow weary of you not being around.

Sometimes, they grow distant or find other things that take them away. Try to remember that occasionally there is no tomorrow and find a way to enjoy those special people in your life today!

3. Education:

Education occurs in many ways. Learning on the job is one type while the more familiar is school. Putting off learning about something you always wanted may place you in a position of never learning about it at all. Some want advanced degrees while others want to learn special skills. Try to make time to learn those things important to you or you may regret it!

4. Interests: Developing interests and

hobbies seems like a waste of time when you are so involved at work. It may seem a poor use of time, but those interests can be helpful and turned to an advantage. Reading books, taking on hobbies and volunteer work are areas for discussion that may make you less boring. Being with a group of people and the only topic you can discuss is your work makes you less interesting. Finding a way to develop a few special interests allows you to connect and communicate better, a true benefit when trying to grow a business. Try developing a few interests that you find enjoyable so you can become well-rounded and less boring!

5. Property:

Many entrepreneurs borrow against their property to build the business.

This can result in loss of your home and create hardship for your loved ones. The first thing your family will find of concern is what happens to them in those bad times. It is important to remember that you are not the only one affected by financial losses. Try to put away funds for a rainy day so you can provide extra insurance that ensures your loved ones are safe!

About the Author Taffy Williams has been a successful entrepreneur and advisor to entrepreneurs for over 30 years. The founder and president of Colonial Technology Development Company, which assists start-ups in technology commercialization. He has written more than 300 articles for: Startup Blog and Examiner Charlotte, NC- small business. Mr. Williams can be found on LinkedIn, Twitter @twilli2861, ColonialTDC, photo website, Google+, Facebook, and Startup Group. More on the agile concepts may be found in soon to be released book: Think Agile

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All You Need To Know About Hiring For A Startup

By Steven Corcoran

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hen people start offering hiring advice or social media tips, I typically cringe. What comes next is inevitably a flood of jargon completely devoid of actionable advice. In the last 3 months, I’ve spent a good deal of time on these subjects. I’ve spoken to everybody from CEOs who have sold their companies billions to hiring managers of failed companies. I’ve learned a lot and have tried to implement the same practices into my own hiring.

Hiring is difficult at any size company. Though at a startup it’s even more difficult and more impactful.

Your first hire will increase your company size by 33% if you’re a 3-person founder team. Large companies don’t have to worry turnover as much, but selecting the wrong individual can cripple a small company. At the very least, it can stunt its growth trajectory.

Distilling the advice of all the amazing mentors and contacts we’ve had, here are five pieces of advice that have helped us in hiring.

1. Wait for the Right Person When your company is growing quickly, it may seem impossible to wait to fill certain positions. For us, that role was a City Manager. We needed somebody to manage the day to day business operations. We were losing out on thousands of dollars of long term value every day we didn’t hire somebody. We had tons of applicants, and we did dozens of interviews.

Unfortunately, we didn’t fall in love with any of the candidates. They were awesome people, but nobody fit the role precisely how we wanted.

Our resolve began to weaken as we lost potential revenue every day. We almost slipped up and offered the position to somebody who was “solid.” But we held out. Because after all, we’re trying to build a billion dollar business. We need people who kick ass.

Still, it was tough not to give in. Thank god we didn’t, though. After a few weeks, we met Alex (who wasn’t even interviewing for that position.) He kicked butt, and we now have the exact person we want for our team. Remember: it’s going to be hard to hold out for the best. But if you don’t have the best people on the bus, you will fail. Stay strong, and demand nothing less than the right person.

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It’s hip today to talk about your company culture and values. But when your company is smaller than 10 people, it is much harder to define. Honestly, we spent more time than we should have contemplating our values, which “type” of person we wanted on board, and who we couldn’t work with.

But what happened was more simple. We interviewed candidates we really liked, for the most part.

If anybody had an issues with a candidate, we didn’t hire them. When you’re a small team, and you can interview on a personal level like that, to figure out a “culture fit,” ask yourself this: If you sat next to this person for 80 hours a week, could you do it without jamming a pencil in your eye? If that person was in working on Sunday, and you had the day off, would you want to go in and help them?

If you answered ‘yes,’ then you have a culture fit.

If not, keep looking.

3. Define What You Want While interviewing, I ran across a peculiar problem. Instead of a lack of talent, our candidate pool was filled with individuals with unique skill sets that could be applicable to our business in one way or another. We spoke to people who ran call centers, opened up international relationships, ran crews of low income individuals, wrote professionally, and owned lawn care companies.

It’s too easy to become intrigued when you run into a valuable, yet unexpected, skill. That’s why it’s so important to define what you absolutely need.

For us, it was simple. Here’s what our ideal City Manager looks like:

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They write well. Since content creation is a huge drive for our business, they need to execute our content creation over the winter.

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They communicate effectively with lawn care companies and contractors.

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They are an effective leader. The ability to manage people is crucial.

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They are capable of making their own decisions and trusting their instincts.

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They are sharp and want to constantly improve our processes. They learn quickly.

Most candidates didn’t hit these required points, but we still debated hiring them because of some shiny new extra feature. If your core requirements aren’t satisfied, the candidate won’t work out.

4. The Sliding Scale I rarely hear people talk about compensation in hiring. This, however, is important. After choosing to offer somebody the job, how exactly do you figure out what to pay them? How do you split the salary and equity? After all, startups are cash strapped.

you have the top and bottom of your sliding scale.

Theoretically, you’re comfortable with all the data points in between.

People often make the mistake of assuming they know what the new hire wants. The fact is some people are more worried about salary, while some find larger equity packages enticing. By offering a sliding scale, you let your future employee pick their desired combination. They’ll be happier, and as long as you value the equity properly, the end result is the same for you.

5. IP Assignment First time CEOs often make the crucial mistake of ignoring intellectual property (IP) agreements.

Basically, without the proper agreements, your company might not own the rights to things your employees create while working with you. You can see where this would be problematic. In the agreement, allow the individual to claim any IP/patents they already own. Other than that, it’s in your best interest to have them sign over their past IP. That way, somebody can’t claim they created the concept prior to working with you.

Hiring is hard. It’s also different for every company.

But if you apply these five points to your own standards and interests, you’ll be well on your way to filling your company with the best possible people.

You’ll have a kick butt team who will likely become your best friends. Now, get out there and scale that business!

About the Author Steven Corcoran is the 22-year-old CEO of LawnStarter, a TechStars Company. He is also a college dropout, self taught coder, once upon a time bi-phasic sleeper, and a huge fan of startups.

The best strategy I’ve heard is to create a sliding scale. Basically, figure out the highest amount of salary you are willing to give. Next, figure out the highest amount of equity. With these two numbers,

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Podcast The Marketing Bulls-Eye: What’s Missing from Most Startup Marketing Campaigns Want to learn: The one thing that you think new business owners don’t spend enough time on?

What business plans do for startups?

The single-most important thing that small business owners do that usually overwhelms them?

When the right time to hire employees is?

One thing can startups do to close more deals with potential customers and clients?

If so, you won’t want to miss this podcast!

Tabitha Jean Naylor Founder of SuccessfulStartup101.com

Listen to the

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Work on the business rather than in it Leading differently

I have made changes in ... ... my leadership role

71%

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I have made changes in ... ... my leadership role

71%

... building a strong complementary team to help grow my business

76%

Establish key advisory networks Making important connections The program has ...

70%

79%

... expanded my professional network

... given me a strong support group in my cohort of fellow winners

Evaluate ďŹ nancing for expansion Becoming savvier business leaders I better understand ...

83% ... entreprenurial growth strategies

45%

reported that it was easier to raise funds after becoming an Entrepreneurial Winning Woman.

58% ... sources of growth capital

Entrepreneurial Winning Women are putting these lessons to work every day. To learn more about the program and its impact on women entrepreneurs, please visit www.ey.com/us/thinkingbig. Apply for the program today — applications are accepted now through May 30, 2014.

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5 Mistakes Founders and Business Owners Make

By Bill Rice

T

he statistics on new business failures is somewhat staggering. The most unfortunate part of the statistics is so many of the failures are attributed to ‘incompetence’, or what I would more softly term ignorance.

Having started a few successful businesses and as the current founder and owner of a marketing agency going into it’s tenth year of operation, I want to offer a little advice to new founders.

This is my list of top mistakes I have seen and have made in my journeys as an entrepreneur.

Underestimate How Hard it is to Get the Market’s Attention When you strike upon that ‘killer idea’ your mind begins to see it everywhere–glaring and so obviously frustrating. The application of your idea becomes the apparent solution to so many problems. You might even get a few head nods from friends and colleagues in the markets you intend to serve.

Your logical conclusion is that it will be a snap to gain market dominance with your product or service. After all, you only need “1% of that billion dollar market” to make everyone concerned wealthy.

Here’s the reality…

Simply getting in front of the market is going to be a challenge in and of itself. Online used to be the cheapest path to awareness. Capturing a reasonably sized audience wasn’t terribly difficult–the competition in most channels was still sparse and inexperienced. Not so anymore.

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megaphone. The game in both of these channels was easily ‘hacked’ to generate significant (free) web traffic and user acquisition.

Much of that has changed as these channels have grown up and become publicly traded companies– reporting to anxious shareholders. Platforms like Facebook and Twitter, and even Google and Bing need desperately to meet the earnings expectations of investors, every quarter. As a result, if you want attention for your new product or service, you’re going to have to pay for every impression.

When you try to enter the market not only do you need to solve a problem, you have to change behavior.

Have you ever tried to break or change a habit? That’s the kind of friction that you’re facing, on a market-size scale.

I can’t tell you the number of decision makers I’ve talked to over the years that are willing (and will tell you as much) to hold the status quo, even if it’s harder, inefficient, and less profitable just to avoid the pain of change. It’s just part of the human DNA. Factor it into your planning.

How do you overcome these market obstacles?

Here’s my formula:

You should be working on these steps pre-launch, probably even pre-product development.

If you get comfortable with “narrating your work” you can leverage the army of beta testers that populate the Internet. This approach will give you an enormous advantage in conserving the finite time and money that can be invested in any new venture.

If you can accomplish these steps through the

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1

. Account for the time it takes to transform your markets’ attitudes and habits. Make sure that it’s factored into your startup’s runaway. That generally means funding and investor patience.

2

. Start conditioning the market. Aggressively introduce your new thinking long before the product hits the market. Talk about the problem. Talk about why it needs to be solved.

And start suggesting conceptual solution sets.

Don’t keep your solution secret. It’s a foolish and often fatal irrational mistake many new entrepreneurs make. Remember, at this point, chances are no one cares. If you want to see someone that is masterful at this and is always launching new ideas and products, start following Dave Winer and reading Scripting. com. You will see the model over and over.

3

. In the process of conditioning the market, make as many relationships as possible. You’re looking to gather in two types of people: users that are looking for or willing to test a solution like yours (i.e., early adopters, perpetual beta users, and loyal users and advocates) and people that are always curious and advocating new approaches (i.e., industry leaders, journalist, bloggers, and vocal VCs).

efficient allocation of brain power and brain writing you will net two huge advantage. First, you will have a better understanding of whether or not there is a market. Second, if there is a market, you will have a built in fan base of users and promoters.

If there’s no market, you will know long before you sink a lot of resources into the idea and are in a stronger position to pivot to a better approach or new idea.

Underestimate How Much Money It Takes to Run Any Business Developing a new web application or opening an online storefront has never been easier, or cheaper.

The proliferation of simple content management systems and website building platforms, like WordPress and Squarespace, make a professional web presence only a good day’s work.

The challenge comes when you need to start operating your business in a sustainable way. At that point profit straining overhead enters the equation: state and federal registrations, regulations, and filings; employees and their health benefits, 401ks, unemployment, workers’ compensation; managing the books, accounting, paying the bills, invoicing, and collecting; office space, software and tools.

It all adds up and quickly drains critical capital necessary to fuel ongoing product development and innovation, sales, and marketing.

However, you have to be careful not to starve out momentum by focusing on these expenses too closely. Business is a flywheel, it takes a lot more effort and cash in the beginning, but once the energy begins to build it gives off exponential returns. Just

be mindful, though not consumed, by the cost of getting to scale with your new venture.

Stops Dialing and Answering the Phone Too Early Letting go of sales and marketing too soon is, in my estimation, one of the biggest and most consistent mistakes founders make.

Rarely will anyone be able to capture the nuance and passion required to sell an emerging product or service like the founder. In the beginning, every product needs to be sold with complete confidence and a deep understanding of the most minor details.

Every new market offering is inherently a complex sale–you’re selling not only the benefits, but also a change in an ingrained habit, belief, or attitude.

Despite the fact that the founder is often the best salesperson, most attempt to flee this post as early as possible. That decision can be fatal.

There are a few reasons this happens.

Most common is the flawed notion that you don’t know how to sell. I want to reinforce that this is an absurd and limited thinking. Selling is a survival skill that we learn from the moment we’re born. Observe any child interacting with their parents for any

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length of time and you will see a masterful salesperson evolving. Over the years we grow and perfect our salesmanship as we seek to get what we want.

Everyone has some foundational sales skills.

Next in line is fear. Developing relationships is always a little scary. Lots of self-doubt enters our minds when we start thinking about approaching someone. How will I open the conversation? Will they accept or reject me? Will they simply shut me down because I’m selling?

These are all rational fears, but you have to move them aside. Replace this anxiety with the confidence that you need to break through your own fear to help improve the business or life of a new customer.

Finally, and possibly the most damaging reason founders abandon selling, is the attitude that selling is ‘beneath’ them or somehow it reduces their credibility.

You see it all the time, founders putting on airs of being inaccessible and too consumed with being King to sell.

This attitude is not only damning to your sales, but also infects the entire DNA of a young company.

Your hubris around selling can quickly kill the ‘do whatever it takes’ mentality everyone needs to have to make a small enterprise grow.

Stays in the Day-to-Day Work of the Business Too Long Much like sales and marketing, founders are often the best at executing the day-to-day business–at least for a period of time. At some point your business will necessarily grow beyond your skills and expertise.

At some point in the maturation of the company your growth curve will take you beyond the capacity of any one person to manage all of the operational areas of the company. At that point (hopefully before it becomes critical) there should be people and systems in place that give you key insight, but no longer requires your direct day-to-day involvement.

The other advantage to this disciplined release of operational control is that you can get refocused where you’re likely to have the greatest impact–leadership, vision, sales and marketing, and product development.

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In my experience, there are some key elements that must be in place before you start this transition: 1. The right people - Nothing is more important to sustained success in a business than recruiting, growing, and fulfilling the best people. You need to develop in these people the same passion for the company. They also need to possess the expertise and curiosity to grow themselves as the business. These are the people that you will eventually give the keys to and trust completely.

2. Defined systems - This is one of the most common weakness in the transition. There is a tendency for a lot critical knowledge to be locked away in your head. If it stays there growth we be nearly impossible. You need to, from day one, begin to document and template everything possible. This will enable the business to scale beyond your personal capacity.

3. Emotional readiness - This may sound like soft science, but it’s terribly important. You, as a founder, must be ready to let things go and have the confidence your team can win and leverage, as well as fail and recover, completely without you. The worst thing you can do when someone else is trying to learn to drive is to keep yanking on the steering wheel. If you can’t keep your hands off the wheel, then it’s too soon.

Mistakes are Part of It Hopefully, this gets you thinking about your current or future startup. I’ve highlighted just a few of the mistakes that plague us founders and the businesses that we run.

I’m sure, as there are in my own company, adjustments to be made for improvement. Take the time to write down one or two things to focus on in the next week.

And always keep this top of mind: Mistakes are part of running a business. How you respond determines what happens next.

Gets Out of the Day-to-Day Work of the Business Too Long

About the Author

As with most best practices there’s often an element of timing. So, although releasing daily operational control is often advantageous, it can be done too soon.

Bill Rice is the Founder & CEO of Kaleidico Digital Marketing. He loves exploring the sociology of Web; then writing and speaking about his surprising discoveries. See what else Bill is up to on Google+ and Twitter.

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Special Spotlight Feature:

Startup Planning & Growth for 2015 Successful Startup 101 Magazine

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The Road to Hell is Paved with Details

By Ian Jackson An exploration of practical differences between successful entrepreneurs, and those who fail along the way

I

t is stated that in the mid 1100s French Abbot Bernard of Clairvaux first coined the phrase we now know as “The road to hell is paved with good intentions.” This phrase has two interpretations.

The first is that failing to act on your intentions leads to failure (hell) and the second is that sometimes your good intentions can trip you up as you act upon them.

It strikes me as a critical component of any start up to negotiate around this truism in the following ways:

Put the effort in I am a huge believer in smart working. I know that successful people maximize their time on the things of most value to them. That isn’t much help as a guiding principle when you are just starting out though. As entrepreneur you need to do everything--accounting, legal, admin, mailing, sales and operations. An acceptance that you are going to work dumbly, not smartly at times, and an understanding of how this will impact your morale is critical. You need to get excited about slogging through the long hours in each Successful Startup 101 Magazine

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and every discipline needed to successfully start a business.

Avoid burning cash Cash is critical to new businesses. If it is your first time as an entrepreneur you will have no real concept of what it is going to feel like having no money in the bank. And just because a client signs a contract doesn’t mean much to you--you need their back office people to actually pay your invoice--maybe 30-90 days from when you “earned” the money. And this is your new life. You need to preserve cash like it is water in the desert. Not until you’ve got more than enough to cover two months of payroll can you consider paying yourself.

“A key factor that differentiates successful and unsuccessful entrepreneurs is a passion for selfassessment.

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Learn to be outstanding at prioritization Successful entrepreneur Chad Sandstedt of TagniFilikes to self-fund his ventures. He notes that avoiding external money means you get all the benefits of your efforts, and you are free from external involvement. The flip side is the far smaller footprint as the business grows just from your seed capital. This requires an ability to properly plan and prioritize the stages of growth, and to have the courage to stick with them.

“When I define my priority list I need to accept we are not going to start task two until task one is complete, and I need to make sure my list is in the best possible order to drive the revenue growth.”--Chad Sandstedt, CEO, TagniFi One additional benefit of this approach is that your business model has to be simple. The lack of big teams brings a singular focus. So TagniFi have a single revenue stream, a single product and all eyes and focus are on that.

Learn to be effective with email Some people equate a clean email box with being effective and efficient. While this might be true when you are controlling someone else’s business, it is less valuable when you are building your new business. I find that many great entrepreneurs manage to completely avoid the temptation to manicure their email. I am sure that many of these only answer emails related to major priorities-developmental or revenue related. The rest can wait, and are correctly deprioritized below their own agenda and focus. If you really need them to action something you will actually need to call and talk to them, or expect a long wait. My observation of the strongest entrepreneurs I’ve worked with is that they spend more time talking--phone and face to face--than in the solo voids of email or messaging channels, which can make you feel busy, but are not necessarily a great way to spend time.

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Develop a passion for selfassessment Former hedge fund manager turned private equity visionary, Joseph Sanberg, is meticulous. As he works with his investment companies (and he is a hands on investor in many, such as the soon-to-launch Aspiration) he makes the CEOs sweat the details. He believes that as you work, you create really meaningful management information and you can only leverage this if you track it and study it. So for Sanberg, there is a huge value in studying both your successful as well as unsuccessful meetings.

“A key factor that differentiates successful and unsuccessful entrepreneurs is a passion for selfassessment. Those that work in organized companies enjoy structured as well as informal feedback loops. However, the entrepreneur must make up for the absence of these sources of feedback by administering a disciplined, self-governed process of detailed review of what works, what doesn’t work and why. Understanding the root causes of success is as important as understanding the root causes of failure. Otherwise, success becomes random instead of repeatable.”--Joseph Sanberg

Create value through a sum of all the details The best companies in their categories--Zappos, Goldman Sachs, Facebook, whoever you like to think of, all have their imitators. You’d think it would be easy to replicate companies that are so well understood.

But no, because out of sight are all the little details that differentiate these firms, in how they operate, develop and think, that is capitalized on again and again. Their competitors--be they entrepreneurs, or heavyweight corporates, don’t have the passion for the details, or don’t think they matter, and so never generate the same returns and ultimately lose.

Pick the road less travelled If you want to get wealthy, or build a business, avoid doing what everyone else is doing. It saddened me when travelling in The Gambia to see five women all set up in the same business--selling fruit to the visiting tourists--and build their stalls right next to each other.

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The competition forced down pricing and also made them get aggressive with pitching the passing tourists, reducing the appeal in the buyer’s market of their own creation. A counterpoint to this is ESP, a mid-sized entrepreneur-led company from the UK that operates in the decidedly unglamorous area of industrial tissue paper products (think public restroom or hospital paper products). Despite the market being dominated from a sales perspective by huge multinationals, ESP’s Chairman Carl Theakson saw and grew an opportunity into a national business that is more profitable than the industry giants due to different target markets and capabilities.

Choose your customers wisely Last but not least it is critical that entrepreneurs pick the right customers. At times when starting up any revenue may seem desirable. This is not the case.

Some will abuse their knowledge that they are an early adopter to smash your business model, confuse your proprieties and take advantage of the situation. The good first clients look very different--happy to take the risk, collaborative, and realistic. They also see the value of what you can deliver today as being worth the money. And it is worth remembering that the selection of each and every future customer may need the same degree of attention and due diligence.

About the Author Ian Jackson is a managing partner with Enshored, an operations consultancy and outsourcing business based in Los Angeles. Prior to founding Enshored, Jackson worked for 20 years in financial technology, leading global businesses for Barra, Multex, Reuters, Dealogic, and Fitch Ratings.

* This article originally appeared on Inc.com

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Born Global or Die Local: Building a Regional Startup Playbook

By Steve Blank

Entrepreneurship is everywhere, but everywhere isn’t a level playing field. What’s the playbook for your region or country to make it so?

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Scalable startups are on a trajectory for a billion dollar market cap. They grow into companies that define an industry and create jobs. Not all start ups want to go in that direction – some will opt instead to become a small business. There’s nothing wrong with a business that supports you and perhaps an extended family. But if you want to build a scalable startup you need to be asking how you can you get enough customers/users/ payers to build a business that can grow revenues past several $100M/year.

With 317 million people the U.S. has a large enough market that most U.S. startups ignore the rest of the world until they scale in their own country. Outside the U.S. a rough rule of thumb for scale is a local population greater than 100 million (and language, cultural and/or regulatory barriers to delay or keep out U.S. entrants.) China, Russia, Brazil, India, Indonesia all meet those criteria. (Obviously this depends on industry and application.) However, most countries don’t have sufficient population to support scale with just their local market and ultimately need to be global players – from day one.

Regional Ecosystems I’m in Australia and just spent time with some great entrepreneurs in Melbourne.

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One of the groups I spoke to was theAustralian Sports Technology Network. This group realized that Australia has a great reputation as one of the world’s best sporting nations. They realized if they could develop and promote a well-coordinated sports technologies industry, they could capture their unfair share of the $300 billon sports consumer market. So they put together a sports technology ecosystem – gathering sports startups in apparel and footwear, protective wear, equipment, nutrition, wearable devices, data and video analytics, and web and mobile solutions and brought them together with investors, retailers and distributors, universities, research

centers and national sporting organizations.

Creating a vertically oriented regional ecosystem is a pretty amazing accomplishment for any country or industry.

However, in meeting some of the sports startups one of the things that struck me is that most of the founders who said they wanted to grow big hadn’t given much thought about how they would go about building size and scale.

The trap most of them fell into (common almost everywhere): they were reading the blog posts and advice of Silicon Valley-based companies and believing that it uniformly applied to them.

It doesn’t.

Born Global or Die Local The biggest mistake for most of these startups was not understanding that optimizing their business model for the 24 million people in the Australian market would not prepare them for the size and scale they needed to get to big.

Instead of beginning with just a focus on Australia, these startups needed to use the business model canvas and articulate which of their hypotheses should be tested locally and what would require getting on an airplane to test by watching someone’s pupils dilate face-to-face.

For example, one of the critical business model hypotheses they could test locally is Product/Market

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fit – the connection between their Value Proposition (what product or service they were building) and the Customer Segment (who they were building it for.)

Further refinement of Product/Market fit could be done locally by using Value Proposition Design.

But other critical hypotheses such as activities, resources, partners, channels needed testing offshore. For

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example, many of the Australian sports tech business models shared common elements. They intended to get scale for their business by growing in the U.S. while building their products in China. And their branding and demand creation activities were going to occur primarily outside of Australia. This meant they would need U.S. channel partners and Chinese manufacturers and customer acquisition and activation programs outside their home country. And as good as the Australian angel

investors have been, there still is dearth of serious followon funding in Australia. This means that most follow-on rounds of tens of millions of dollars, if needed will likely come from outside the country.

While the network was very helpful getting these startups together and introduced to investors, it wasn’t clear how and when these startups tested their “going global” hypotheses.

No one had written the playbook.

Building a Regional Startup Playbook What’s been missing from regions outside of Silicon Valley is a “playbook.” In American football a playbook contains a sports team’s strategies and plays. It struck me that every region needs its own industry playbook on how to compete globally. For Australian sports startups, a playbook might lay out in detail the following steps:

• Build minimal viable products and test product/ market fit in Australia • Identify activities/resources/partners locally and then globally • Get seed funding in Australia • Trip 1 to China to understand manufacturing landscape, potential partners and rough cost of goods • Trip 2 to the U.S. to understand distribution channel landscape, potential partners and rough cost of customer acquisition • Test product/market fit in the U.S. • Trip 3 to China, pick manufacturing partner, start low volume production • Test channel and demand creation activities in the U.S. • Trip 4 to the U.S. Establish U.S. sales office • Trip 5 to the U.S. to get Series A funding in the U.S.

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Each industry in a region should develop a playbook that expands and details the strategy and tactics of how to build a scalable startup. When a playbook is shared through regional collaborations (like the Australian Sports Techn Network,) entrepreneurs can jumpstart their efforts by sharing experience instead of inventing the wheel each time a new startup is launched. Now all they need is a playbook. As markets mature, and investors and the ecosystem become collectively smarter, the playbook will change over time.

Lessons Learned

“

• A scalable startup typically requires a local population >100 million people • If your country doesn’t have that you need to be born global • Your country/industry needs a “go global” playbook

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About the Author Steve Blank is a retired serial entrepreneurturned-educator who changed how startups are built and how entrepreneurship is taught. He created the Customer Development methodology that launched the lean startup movement, and wrote about the process in his first book, The Four Steps to the Epiphany. His second book, The Startup Owner’s Manual, is a stepby-step guide to building a successful company.

Blank teaches the Customer Development methodology in his Lean LaunchPad classes at Stanford University, U.C. Berkeley, Columbia University and the National Science Foundation.

He writes regularly about entrepreneurship at http://www.steveblank.com. * The piece was first published October 31, 2014, at www.steveblank.com and is reprinted here with Steve Blank’s permission

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From Zero to Thousands: 5 Steps to Get Your Social Media Up and Running

By Rachel Wisuri Successful Startup 101 Magazine

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aybe you’re a new business, or maybe you’re an older business who recently decided to get active on social media.

Regardless, you face the same problem: how do you build a successful presence on social media when no one on Facebook, Twitter, Pinterest, or Instagram knows who you are?

Below, I’ve outlined 5 steps to get your social media channels up and running.

1. Choose the channels that work best for YOU Not every social media channel will works for your business. As the Community Manager for a test-prep

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company, I’ve experienced that firsthand. Pinterest for test prep? Not the most efficient use of my time.

(Have you ever heard your friends say, “Oh I saw the most amazing pin about math formulas today”? No? Didn’t think so.) So first, choose the channels that are right for your company.

How? Figure out where your customers already hang out. Set up a Mention or a Google Alert for your company’s name, and find out where conversations about you are already happening. (Or, simply ask your customers what their favorite platforms are!)

You can also consider the demographic information for each channel and try to match that up with the demographics of your customer base.

2. Define your goals As marketers, we know it’s much better to be able to track and define your success with hard numbers. Once you’ve chosen some channels, it’s time to set up your metrics for success. That will help you see if your hard work is paying off and help you decide if you should continue to invest in a channel that is not working as well as you’d like.

Some things to consider when setting up your metrics goals (a.k.a. how will you define success?): • Is getting a lot of followers your main goal?

• Do you want to increase mentions of your brand online?

• How important are likes, re-tweets, comments, and engagement to you?

• What is your goal for response time to customers’ questions and comments?

• Are you trying to increase clicks and drive traffic to your website?

3. Tell everyone you know Great, now you’re set up on the best channels for you and have started making your profiles look awesome. But you still have the same problem: no one is following you.

“

Maybe you’re a new business, or maybe you’re an older business who recently decided to get active on social media. Regardless, you face the same problem: how do you build a successful presence on social media when no one on Facebook, Twitter, Pinterest, or Instagram knows who you are?

How to fix it: start an online conversation with your current customers to get the ball rolling. Move your existing customer base to your social media channels.

Email them, put your account names on your business cards, and scream it from the rooftops. By driving their focus to your social media accounts, you’ll start to build a quality follower base that already likes you and what you have to say.

4. Think like a human being, not a social media robot Don’t just promote and talk about yourself. Don’t allow your conversations and posts to be one sided. When you act like a human being via social media and use it to interact with other human beings, you’ll be able to reach new potential customers and people who are genuinely interested in what you’re selling.

Engage in conversations like you would with your own friends — “like” relevant comments and statuses, and start conversations with interesting people and companies.

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5. Provide useful information to your community

relationships and make them last far into the future!

Now, I’m not saying you should never talk about yourself, but do so in a way that will benefit your community. What are their main concerns? What do they need help with? This comes back to knowing your customers.

Bonus Tip: people love contests and free stuff, and your followers are no exception. Engage your new social media community by promoting fun competitions. Got some company pens or t-shirts to give away? Create a contest for your followers and promise the winners swag! They might even brag about it to their friends, which just equals more and more mentions for you!

Now that you have these 5 steps under your belt, it’s up to you to upkeep your brand new follower

About the Author Rachel Wisuri is the Community Manager at Magoosh, an online test-prep company in the Bay Area. There, she spends her time making sure the Magoosh community is happy, healthy, and growing. In her free time she can be found eating peanut butter, listening to the Beatles, and lounging in the park.

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Startups: Grow Fast or Die Slow [VIDEO]

By Ronald Barba

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“A

startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of “exit.” The only essential thing is growth. Everything else we associate with startups follows from growth.” – Paul Graham

According to Y Combinator cofounder and partner Paul Graham, the single most essential trait about being a startup is its capacity for rapid growth.

That’s it: startup growth – that is the only thing that entitles a company to being labeled a “startup”. In April of this year, McKinsey & Companyreleased its findings on software and online-services companies from the likes of Adobe, Salesforce.com, Google, and Facebook, which further conveyed the innate growth trait of startups and why it’s necessary for companies to grow fast or face complete death.

The research was compiled by analyzing life cycles of approximately 3,000 software and online-services companies from around the world between 1980 and 2012 (essentially spanning the period of time between the nascency of the initial tech boom of the 1980s to today’s era of tech startups), as well as surveying more than 70 company executives.

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In McKinsey’s research, there were three primary findings: 1) growth matters more than margins, 2) sustaining high growth is difficult, and 3) sustained growth is possibly only when certain factors are secured. For startups wanting to become billiondollar companies, startup growth is the one thing on which they need to focus. Why? Because higher growth yields greater returns to shareholders.

Additionally, high growth predicts long-term success. In the study, companies with growth rates greater than 60 percent upon reaching $100 million in revenues – which McKinsey refers to as “supergrowers” – were eight times more likely to reach $1 billion in revenues than those whose growth was less than 20 percent.

In a set of two videos recently released by McKinsey, those involved in the project summarize their findings. The first video goes into why growth is a greater factor than margins:

The second video from McKinsey goes into how companies can become supergrowers:

Read the rest of the findings from McKinsey here. To determine when your startup will reach profitability, check out this startup growth calculator.

About the Author Ronald Barba is an associate writer and reporter for Tech Cocktail. Formerly a DC native, he’s now based in New York City. He reports on the Mid-Atlantic and Northeast, looking at startup communities like Boston, Chicago, D.C., and NYC. He’s especially interested in venture capital, M&As, and tech/business trends. Aside from startups, Ronald is interested in philosophy, cognitive science, politics, social justice, pop culture, and all things geek. He reads Murakami and Barthes, and alternates binge watch sessions of ‘Doctor Who’ and ‘The Mindy Project’. Got something to say? Then email me (ronald@tech.co). Follow me on Twitter: @RonaldPBarba.

Subscribe to me on Facebook. Find me on Google.

Original article published here: http://tech.co/startup-growth-fast-die-slow-startup-growth-video-2014-11

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4 Signs It’s Time for Your Startup to

Grow Up

By Robert Sher

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eading a midsized business is fundamentally different than leading a small business.

Startups have to be led by a person who is hands on and given a newly-founded company’s limited resources, it can only hire as many helpers as are critical to get going. If the team does its job well, the business will grow. At some point, however, to continue growing to midsize, a business must invest in a team of leaders with specialized and managerial expertise. But this can be tricky.

Firms that transition to a professional management style can transition to leadership professional management team too early can lose the scrappiness and nimbleness that leads to the winning strategy.

Invest in a team too late, and they will fail to scale their golden opportunity.

Here are four common signs that your startup has reached its tipping point -- and what to do next:

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1. Problems become more complex.

When launching a company, often founders look for people that can multi-task and excel at many duties. While initially it may be great to have these “Jack of all trades, master of none,” entrepreneurs will eventually need to hire people with a particular specialty to bring their business to the next level.

2. Managers aren’t leaders.

Many managers in small companies are happy to do what the CEO tells them to do. But at the tipping point, the CEO will no longer have the time or energy to solve their problems for them. This is when CEOs need managers who can lead on their own.

3. Executives lack the right skills.

In small firms, please the CEO and everything’s good. But midsized firms have leadership teams that might be three-to-five levels deep.

If your executives don’t know how to run teams, or possess the specialized knowledge and skills the business now requires, the company’s growth can stall.

4. Teams aren’t thinking long term.

Executives at early-stage companies enjoy getting their hands dirty. They like to execute, and everyone pitches in. But the larger the business, the more it needs planning, anticipation, strategy and an understanding of its market (or its future market). Some

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executives don’t like these more sophisticated business processes, finding them tedious or bureaucratic.

Keep in mind, while leadership shifts are inevitable, this changeover in management approach shouldn’t happen abruptly. Some of the original startup team may be able to grow into professional managers.

Other startups may not need to professionalize for another few years. Planning may morph from the back of an envelope to a one-page plan. Drive-by meetings might change into a weekly operations meeting.

But one staff position must lead the march: The CEO. The CEO who wishes to stay on top must begin treating leadership and management as worthy of time and attention, not unlike the attention garnered by a prospective customer or new innovation. Rather than allowing the team to organically respond to external opportunities, the leader of a midsized firm proactively picks the right leadership team for the challenge ahead, creates appropriate organizational structure and communication vehicles that set the company up for ongoing growth.

About the Author Robert Sher is the author of MIGHTY MIDSIZE COMPANIES: How Leaders Overcome 7 Silent Growth Killers (Bibliomotion; September 2014) and the founder of CEO to CEO, a consulting firm.

Sher has worked with executive teams at more than 80 companies to improve the leadership infrastructure of midsize organizations. www.ceotoceo.biz

* This article originally appeared on Entrepreneur.

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Want to Give Your Startup a Tactical Edge?

Go Paperless from the Start

By Ingrid von Stein

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n an age dominated by technology, why are we still seeing businesses – and startups especially – printing, copying, faxing, scanning and then filing trillions of pieces of paper? Did you know that globally businesses continues to use paper printouts to archive 62% of all their important documents?

client, and then were put in the filing trays to be filed.

This then takes admin staff to manage, sort out, file and organize stuff for deep storage; at a substantial monthly cost to your business. But for the moment, let’s go back to the issue of “We need the paper

So why is it so difficult for businesses to make the switch from printed paper to digital archiving and storage?

Three simple words – fear, uncertainty and doubt (or FUD for short).

I have spent countless hours in consultation with business heads, both locally and globally, and there seems to be the same pattern when it comes to going paperless. “My accounts or legal departments must have hard copies of everything and then keep them for five years”.

An interesting fact is that all these documents/contracts/invoices/ statements/credit notes, etc. all started out as a document on a computer, were saved as a digital file, were printed out and posted to the

copies for legal purposes” and unpack that further:

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Is digital legal and compliant? It’s time to think tactically Digital image copies of information that have been converted from paper and microfilm are the legal equivalent of their paper counterparts and may be considered as admissible in evidence as the original paper record in any legal or administrative proceeding.

But we have to keep the original!

Digital image copies and all other types of copies are acceptable in any legal or administrative proceeding regardless of whether the original is in existence or not.

Let’s look at a few other factors that you may need to review before you make the leap to paperless.

Take a look at your business as it is right now. If you glance around your desk or over to the desk next to you, what do you see: paper; files; notebook and probably a pad of post-it-notes.

Now pick up your cellphone and go into your gallery and take a look at all the pictures you have in there.

You trust your phone’s technology enough to take and store your precious memories – so why would you not apply the same thinking to your business?

Everything can be stored digitally. Everything can be filed in the place that you want it. Did you know that more than 20% of all your paper files either go missing or are misfiled – taking up precious man hours to search for them!

Going the paperless route…

Improves productivity — no getting up to the filing cabinet or retrieve a box from deep storage. You just click a button and go to the place where it is filed on your server or in the cloud.

Risk reduction — about 80% of all business “paperwork” is still retained and stored on paper. What happens if there is a flood or fire? Your documents are gone for good. What then happens to your business and all the information that you have on your clients or suppliers, agreements, sales records, etc.

Cost savings — on the cost of admin staff / cost of filing cabinets / cost of storage off site. At least 15% of your business revenue is spent on creating, managing and distributing documents and at least 60% of your employees’ time is spend working and managing documents.

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Don’t rush into the process of going paperless; take a few simple steps first:

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printer, copier and scanner that save to pdf are NOT a business workflow solution — it is a product that copies, scans and prints.

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o some research and find a company that will come in and assess your business needs, instead of just trying to sell you a solution. How can they if they do not know how your business works and what your business goals are.

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elect a company that has a solid reputation in the market place and has the latest software technology and top-of-the-range equipment – some of these products are: Avision / Inotec / Iris / Zuetschel / paperfreeweb.

You have invested time and money into your business in terms of human resources, technology, marketing and getting new business; you have a state-of-the-art website; you are linked to Twitter, Facebook, etc. – from a technology front-end point of view your “shop” is looking good, BUT you won’t survive with elegant digital frontend and paper-clogged processes on the back-end.

Make your business life easier – call in a paperless expert to help you grow your business into the future.

About the Author Ingrid von Stein is the Founder and CEO, Indigo Zebra Communications and www.ebizradio.com She has spent the last 25 years as a communications strategist, conversational capitalist and industry innovator and has worked side-by-side with some of the largest brands globally to ensure that their communications work in tandem with their business goals. Known for her tenacity and true entrepreneurial spirit it was a natural progression of her communications business to evolve and launch a unique African business platform that covered the world of business and the business of the world – www.ebizradio.com is currently the only entity of its kind on the African continent and brings together global thought leaders and industry innovators in the world of marketing, media, advertising, branding, communications and business who are willing to share their industry insights with the world and especially those wanting to grow their knowledge and business skills on the African continent.

Managing the Numbers of a Seasonal Startup: When to Spend and How Much

By Greg Coleman This post is produced by Nexercise and is Part II in the series, “The Myth of continuous up and to the right: The challenges of a seasonal startup.”

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n Part I of this three-part series we provided some insight into seasonal startups — specifically giving some key indicators to help founders determine if they have a seasonal startup on their hands. In Part II, we’ll share some tips from founders on managing seasonal startups, with a particular emphasis on managing cashflow and growth during the seasonality.

When our company first launched, we went to market with our Nexercise app, which is now called Challenges

by Nexercise. We simultaneously encountered both the expected January user growth in a fitness company as well as the unexpected drop in Q1 advertising spending from big brands – which we now understand to be completely normal.

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As we dug deeper into this, we saw that in January of that year, our download, active user, and session counts were all at 12-month highs — while our revenue was at a 4-month low due to low advertising campaign volume. So what was our key takeaway? The next year we needed to make sure we had campaigns from brands that shared our seasonality cycles, specifically, brands targeting fitness. So by working with our advertising partners, we were able to get a few fitnessspecific advertising campaigns to go live the following January and we ended up seeing a 2.6x increase in January revenue.

Pay attention to LTV and CAC However, there was still more learning to take place. In hindsight, we spent a little more than we should have on advertising our own. Our company is fortunate to be in a position where not only does the Lifetime Value of a user (LTV) exceed our Customer Acquisition Cost (CAC), we also have a standard payback period that is relatively short. But having said that, that following year, we REALLY opened the floodgates in order to make sure we didn’t leave any advertising revenue on the table. You’re probably thinking this isn’t a problem as long as LTV > CAC. However, this dialed-up ad spending inflated the average CAC during that period to the point where the payback period almost tripled. This is non-trivial when you’re paying attention to your working capital.

So while not fate-changing, it did illuminate another important consideration.

So what do we do now? We pay attention to the following four items when it comes to seasonality: 1

Cash in from advertising or other app sales

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Cash out from advertising spending

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Ensure cash on hand (working capital)

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Build app store rankings, which drive organic growth and overall growth rates

We also decided to offer another product. We now have a product that can take full advantage of the upside of fitness seasonality without exposure to the advertising downside. The paid version of our Sworkit app gives us the ability to directly monetize

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the seasonal growth of fitness app usage. (We’ll let you know how January of 2015 works out.)

Remember, you’re not alone Our story is just one of many in startup seasonality.

Simply understanding your primary customer’s behavior and motivations provides amazing insight. Consider this example from Weiting Liu of Codementor, a live 1:1 help marketplace for developers that connects developers with experts for on-demand support & training via screen sharing, video, and chat. Liu completely expects that their 2014 month-over-month growth streak of 30% will come to an end in December due to Christmas and the holidays. Liu states, “Codementor is all about productivity — and people generally don’t work that much during the holidays. We’ve already been seeing down time toward the end of November.” As a result, his company is proactively adjusting instead of reacting.

DropShip Commerce CEO Jeremy Hanks, however, is right in the middle of his sweet spot but realizes that he has to grab as much as he can now because things will dramatically change in January. His company, which is an enterprise SaaS platform for retailers to automate shipping, is subject to both the broader seasonality of retail sales AND the timing of IT buying decisions for companies they support. When it comes to managing the seasonality of both the service and the sales cycle, Jeremy states, “This means our KPIs like Orders and Accts who Order explode in Q4 but then our marketing/sales pipeline and then finances/ revenues fall off a cliff.”

Key takeaways from SpotHero So what should you be considering in your company?

Having collected nearly four years of seasonality data across 10 cities, SpotHero, an on-demand parking company, has figured out what to focus on.

Before joining SpotHero as its Director of Marketing, Elan Mosbacher led marketing for two other VCbacked companies facing seasonality. As you think about spending money on anything from advertising to PR to operations, Elan recommends that you consider the following: • When to spend depends on your growth plans, unit economics, and business type.

• In terms of growth plans, let’s give an example.

If you’re building a marketplace business, you may need to over-invest initially regardless of seasonality. Instead, marketing spend should be in lock step with the supply side of the business.

• In terms of unit economics, you don’t want to accelerate spend until lifetime value, customer acquisition cost, and payback are in line. If LTV:CAC is > 4 and payback is 6-12 months, you’ll want to spend regardless of seasonality.

If your business is dependent on users over revenue, make sure retention and referral are really high.

As you can see, leading a seasonal business is not rocket science. However, it’s also not something you can put on autopilot either. It’s just as much art as it is science, especially early in the life of your business.

However, following some key principles should help you navigate it through the first couple cycles.

In Part III, we’ll look at how fundraising works in a seasonal startup and how to position your company for investment when growth is not always up and to the right.

About the Author Greg Coleman is the Co-Founder and COO of Nexercise, a TechStars company focused on helping people exercise more consistently through its Sworkit personal training app and Challenges motivational app. In addition to being a TechStars alum, Greg has an MBA from The Wharton School and a BS in Electrical Engineering from the US Air Force Academy.

• In terms of business type, strategies also vary. For SaaS, focus on moving month-tomonth customers to long-term contracts. For ecommerce companies, try to sell subscriptions during busy months so you can make money during slower months. For lead generation businesses, you often want every transaction to be profitable.

• Early on, your budget should be small enough and growth should be fast enough that seasonality won’t impact you all that much.

• You’ll want to allocate more spend just before and during busy season than just after busy season.

• Spend on demand capture tactics before demand generation tactics, because the former is generally higher ROI.

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10 Incentives For Entrepreneurs To Bootstrap Their Startup

By Martin Zwilling

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’ve always wondered who started the urban myth that the best way to start a company is to come up with a great idea, and then find some professional investors to give you a pot of money to build a company.

In my experience, that’s actually the worst way to start, for reasons I will outline here, and also the least common way, according to an authoritative survey of new startups.

Based on the Startup Environment Index from the Kauffman Foundation and LegalZoom a while back, personal money, or bootstrapping, continues to be the primary startup funding source. Eighty percent of new entrepreneurs use this approach, with only six percent using investor funding. The remaining entrepreneurs borrow from family and friends, or acquire a loan.

So before you become obsessed with landing investors to fund your idea and minimize your risk, consider the following:

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inding investors takes work, time, and money you can ill afford.

Entrepreneurs who plan to complete a business plan the first month, find an investor the second, and roll out a product the third month are just kidding themselves. Count on several months of effort and costly assistance to court investors, with less than a 10% success rate. nyone who gives you money is likely to be a tough boss. If you chose the entrepreneur lifestyle to be your own boss, don’t accept money from anyone. Every person who gives you money will want to have “input,” if not formal approval on every move. Be prepared to live with communication, negotiation, and milestones every day.

on’t give up a chunk of your company and control before you start. Even a small investor in the early days will take a large equity percentage, due to that pesky valuation challenge. At least wait until later, when you ready to scale, and have some “leverage” based on a proven business model, some real customers, and real revenue.

ou will squeeze harder on your own dollars than investor dollars.

It’s just human nature that we remember the pain of earning our own dollars, versus those “donated” by someone else. Focusing on the burn rate and prioritizing every possible expense will keep overhead down, help you stay lean, and achieve a higher profit earlier. ometimes survival requires staying under the radar. People who give you money like to talk about their great investment, and competitors see you coming. Sometimes creative efforts need more time before launch, or your efforts to run the company need tuning. Investors like to replace Founders who don’t seem to be moving fast enough.

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anaging investors is a distraction from your core business. Fundraising and investor governance are never-ending tasks, which will take real focus away from building the right product and finding real customers. Having more money to spend, but spending it on the wrong things, certainly doesn’t pave the road to success.

ntrepreneurs need to start small and pivot quickly. Start with a minimum viable product (MVP), as well as a minimum viable team. Investors like a well-rounded team, working in a highly parallel fashion. That takes more money and time to set up, and more people to re-train and re-educate when forced to redirect your strategy. he best partners are ones who share costs and risks. With no investors, you will work harder to find vendors who will absorb costs and associated risks for a potentially bigger return later. Since they now have real skin in the game, they will also work harder to show quality and value, which is a win-winwin for you, them, and your customers. ou will be happier and under less pressure. You should choose to be an entrepreneur to be able to do what you love. Yet we all apply pressure to ourselves to do these things to our own satisfaction.

Investor money brings so many additional pressures, that personal happiness and satisfaction can be completely jeopardized. how you are committed to your startup, not just involved. When you put your own financing on the line, your partners, your team, and eventually your customers will know that you are committed to solving their problem. That increases their motivation and conviction, which are the keys to their success as well as yours.

Of course, some of you will say, I don’t have a dollar and my big idea can’t wait. Unfortunately, outside investors are not an answer to this problem. To investors, having no money indicates that you may not have the discipline to manage their money, and manage a tough business process as well.

In these cases, I would suggest you work in another similar startup for a while, to learn the business, save your pennies, and test your startup concept on the side. A startup idea executed hastily and poorly will be killed more completely than any timing delay. Are you sure the money you seek is really your key to changing the world?

About the Author Martin Zwilling is the Founder and CEO of Startup Professionals, a company that provides products and services to startup founders and small business owners. He writes a daily blog for entrepreneurs, and is also a regular contributor to Forbes, Harvard Business Review, Business Insider, and other business information sites. He recently released his first book titled “Do You Have What It Takes To Be An Entrepreneur?” He can be contacted directly at marty@startupprofessionals.com. * This article originally appeared on Entrepreneur.

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Are You Suffering from Small Business Success?

By Allison Kelly

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he title is not a trick question.

Suffering from your success can be a painful point in any business, and— let’s face it—in the entrepreneur’s life as well.

to breathe seems like the last priority on anyone’s list. You are just going to dive in and go for it because that is why you got into business in the first place, right? Wrong!

As the CEO of your small business you should be running things, your business should not be running you. Unfortunately, too often than not, when the promise of new customers and exciting offers come knocking, pausing

Regardless of the industry you are in, proper planning and the right perspective are necessary in order to help you carry out sustainable growth. Read on to discover the steps you can take today to stop your small business suffering once and for all.

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Plan For Your Growth Of course everyone says small business growth can be managed if you plan for it. The thing is, no one is ever quite sure when that growth will happen. That is why it is important to tuck a few “what-if” scenarios in your back pocket so you can reach for them when an exciting growth opportunity comes your way.

Start by identifying some key indicators that will help you determine when a growth surge is happening. An increase in sales is an obvious indicator, but what about all of the things that lead to that increase in sales: a news article on your company, exposure at a conference or expo, etc.? When traction for your small business starts to pick up, it is important to step back as early as possible and prepare for the activity ahead.

Having baseline numbers or an understanding in place will help ensure that your systems can handle your growth. One way to do this is to implement real-time data, which, for example, can help you keep an eye on your inventory. What do

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you have in stock? How much of your assets are held up in that inventory, and how long will it take you to replace it if you were to sell out today?

Another way to plan for your growth is to reassess your company’s cash flow. Make sure your inventory and accounts receivables match so that you do not run into monthly lulls. Consider reaching out to your suppliers and see if you can agree on a reoccurring payment date that works best for your business. Similarly for accounts receivable, offer discounts for early invoices, and put a late-payment policy in place to put some confidence behind your cash flow projections.

Remember, It’s Not All About You Yes, you are the CEO of your small business and you take your responsibility to fulfill your customers’ demand seriously — but perspective matters. If you are hit with a surge in demand, you may not be able to run your business the way you would like to for a period of time; flexibility and the right attitude will serve you well. There are always other resources you can use to help serve

While managing increased demand and the new customers that come along with it, do not forget to tend to your existing customer base too.

After all, what is the point of growing your small business if your customer connection gets short-changed in the process?

Continue to nurture your existing customer base during your growth period.

Blogs and social media updates are a great way to keep your loyal audience in the loop. Opening yourself up to suggestions and comments, and sharing samples and trials, will allow customers to feel like they have a stake in your development, and will encourage them to grow right along with you.

But, Don’t Forget About Yourself Either Somewhere today there is an entrepreneur who will have to turn down a new and exciting opportunity because their business is currently unable to meet increased demand. This does not mean their small business is a failure, or that the entrepreneur is doing the opposite of what he/she set out to do, it is simply confirmation that the demand is out there when they are ready to handle it in a sustainable and smart way. When necessary, be confident in the decision to step

“

Somewhere today there is an entrepreneur who will have to turn down a new and exciting opportunity because their business is currently unable to meet increased demand. This does not mean their small business is a failure, or that the entrepreneur is doing the opposite of what he/she set out to do, it is simply confirmation that the demand is out there when they are ready to handle it in a sustainable and smart way.

“

your customers, and the more proactive you can be, the better.

For example, you might want to reach out to another supplier of your product to ensure that you can meet any surges in demand now or in the future.

back and plan to properly meet demand moving forward. If you are currently in firefighter mode, put out immediate threats with credible and reliable resources, and then return to the drafting board.

Often small business owners think planning and preparation are exclusive to the early stage of a business, but the truth is your growth is in direct correlation to

the time you invest in nurturing it. Often when entrepreneurs are experiencing a challenge in operations, marketing, or finance, with some reflection they come to find what they really need is to develop their vision and leadership perspective. Taking a step back to assess the whole business—not just your immediate challenges— is crucial.

Consider seeking out an experienced professional who can coach you through your next stages of growth; together you can draft a 3-5 year plan while running drills of those “what-if” scenarios. A proper mentor can teach you to work with your business proactively, rather than reactively.

Perspective plays a key role in how much you choose to suffer from your success. Those current constraints and headaches can be viewed as pathways, pointing out the new directions your business needs to take in order to grow efficiently, effectively, and hopefully pain-free!

About the Author Allison Kelly works at Pacific Community Ventures, a nonprofit organization that creates economic opportunity in lowincome communities. Through PCV’s Business Advising program small business owners are connected with expert, volunteer advisors who provide tailored guidance to help them grow their business.

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Infographic: Hvow to Make the Leap from Employee to Entrepreneur by The Founder Institute Countless employees every day dream of launching their own company. They feel that they either have the correct skills or ideas to be able to enter an industry and create a successful business. But they haven’t pursued any of their business ideas yet. Why is that?

If you have had an idea for a company, but have not yet pursued it, what has been holding you back?

For many aspiring entrepreneurs, the lack of a roadmap on how to start a project that could turn into a company makes it a difficult path to take. Most don’t even know where to start, while others don’t know if this career path is correct for them.

This infographic that we’ve designed walks you through the entire process of going from employee to entrepreneur. Use it as a guidline to vet your business ideas and find out if entrepreneurship in the right path for you.

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Click here to view full infographic...

About Founder Institute The Founder Institute is the world’s largest entrepreneur training and startup launch program, helping aspiring founders across the globe build enduring technology companies. In the Founder Institute’s fourmonth, part-time program, promising startup entrepreneurs “learn by doing” and launch a company through structured training courses, practical business-building assignments, and expert feedback from a large network of business mentors. Plus, aspiring founders are not required to quit their day job to participate, so they can begin building a business around their ideas without putting their livelihood at risk.

Based in Silicon Valley and with chapters across 85 cities and 40 countries, the Founder Institute has helped launch over 1,310 companies, which have created over 10,000+ new jobs. The company’s mission is to “Globalize Silicon Valley” and build sustainable startup ecosystems that will create one million new jobs worldwide.

The Founder Institute was founded in 2009 by serial entrepreneur Adeo Ressi.

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Must See Movie For Entrepreneurs:

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ecember is full of exciting experiences. The holidays are rounding the corner and many business owners are looking forward to taking a few days off for their holiday vacation.

What better way to spend your free time than watching a relaxing yet hilarious movie? Not only does this film provide entertainment, but it can bring you

Tommy Boy

a little inspiration through your laughter and allow you to feel like you are learning something even while you’re not actually working.

The Plot Chris Farley plays Tommy Callahan Jr., who is your typical poster child for a spoiled, unintelligent rich boy.

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As seen in the movie, it takes Tommy nearly seven years to graduate from college - a task he just barely accomplishes - and his goals are practically obsolete.

His father, Big Tom Callahan, is the owner of an auto parts factory located in Ohio.

Why You Should See It

Fortunately for Tommy, there is a special position available for him in his father’s factory. While his father shows him what is to be of his future, he also introduces him to his new stepmother Beverly, played

by Bo Derek. Beverly even brings Tommy a gift he has been dreaming of; a new brother.

In the film, Tommy knows that he is following in the shadow of his father, who was not only his mentor but his friend and a well-loved member of the community.

For many entrepreneurs, this is what you are striving to do. You want to be as successful as your role models but as kind, passionate and hardworking as your mentors.

After the marriage is official and the Callahan’s are welcoming their new family into their lives, Big Tom encounters a fatal heart attack, leaving the company to Tommy to rescue. Sadly for Tommy, he has to sell enough brake pads for the company’s new brake pad division. If he fails to sell the quota necessary, the company will close down and be sold to a new owner.

It can be difficult to overcome some of the obstacles you encounter on your journey to success. In the movie, Tommy is told no over and over again. Though he does have a moment where failure overtakes his mindset, he finds what it is that motivates and fuels him and carries on.

Accompanied by the infamous David Spade, who plays Big Tom’s right hand man, Richard, the two go out on a trip to do what they can to salvage enough sales in order to save the company.

As a startup founder, you will often be told no. You will often encounter failures and times where you feel like nothing you do is right, but if you continue to move forward and search for whatever it is that fuels you to be successful, nothing can stop.

The trip is filled with obvious mishaps and disappointing situations and Tommy realizes he is in over his head. He doesn’t think he will ever have enough motivation, strength and willpower to do the job that his father did for so many years.

Once Tommy has regained his self esteem after making his first sale, he begins to succeed. He finds what his ‘spark’ is and uses it to his advantage. Although the movie oddly ends with Beverly actually being married to her son and the company being saved, Tommy succeeds in what he needs to do to save the company and overcomes all of the obstacles that he encounters.

He decides that he would like to work in the factory after all - and he gets the girl.

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While the shoes of Chris Farley have yet to be filled since his passing, his acting will remind you why laughter is the best medicine and persistence is key.

Tommy Boy will not only keep you laughing and smiling, but it will remind you this:

Persistence is the key to success

Whoever your role model is, remember that they will be proud of you as long as you continue to work hard and strive to be the best, no matter how many times you fail

You may hear 50 no’s, but it only takes one yes to keep your hopes high

By Martin Zwilling

s y a W 10 s r u e n e r p e Entr y a W r i e h T Fail p o T e To Th U

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

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

career in business for all to see and avoid.

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

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Never spend money you don’t yet

have in the bank.

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major new customer.

But things do go wrong, and you will be left holding the bag. It’s not only embarrassing, but one of the quickest ways to end your entrepreneurial career.

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

Never open your

mouth while in a negative emotional state.

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

4

Never create a market you can’t supply

and support.

If your product is really new and disruptive, make sure you have supply to meet the demand at rollout, and a patent to prevent others from jumping in quickly.

Too many entrepreneurs have had their new positions in the marketplace taken away by competitors and others with deep pockets.

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Never underestimate the importance of due diligence.

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

Never over-promise and under-deliver.

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Never count on anyone who offers to work for free.

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

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Never grow too quickly for your finances

and staffing.

Growing quickly, without a plan on how to implement that growth can be a disaster.

Learn how to reject a big order if you are not prepared to handle it. It takes a huge investment to build large orders, and large customers are the slowest to pay. In the trade, this is called “death by success.”

8

Never be confused between working

hard and working smart.

In business (as in life), you should never reward yourself or your team on the quantity of time spent, rather than results achieved.

Quality works at a thousand times the pace of quantity. Prioritize your tasks, take advantage of technology, and constantly optimize your processes.

9

Never be afraid to ask for help, advice, or even money.

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

10

Never rely on a verbal agreement in business.

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

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

The good news is that, according to the “DNA of an Entrepreneur” study a while back, almost nine in ten entrepreneurs (87%) found more satisfaction from running a small company than working in a large one, even with the pitfalls outlined here. I suspect that most of these have failed their way to this top satisfaction.

About the Author Martin Zwilling is the Founder and CEO of Startup Professionals, a company that provides products and services to startup founders and small business owners. He writes a daily blog for entrepreneurs, and is also a regular contributor to Forbes, Harvard Business Review, Business Insider, and other business information sites. He recently released his first book titled “Do You Have What It Takes To Be An Entrepreneur?” He can be contacted directly at marty@startupprofessionals.com. * This article originally appeared on Entrepreneur.

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