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Lessons for Entrepreneurs From A Navy Seal -by Martin Zwilling 80 Ways to Find Your Next Big Startup Idea - by Thomas Oppong Leave the Nest to Start Your Own Company: 8 Signs You're Ready -by Marla Tabaka Do You Have What It Takes to Start Your Own Business? -by Rieva Lesonsky Why Startups Hire Their Own Lawyers -by Daniel Doktori
Pros and Cons of Joining a Business Accelerator Program -by Jerry Jao 8 Ways to Fund Your Veteran-Owned Startup -by Tom Cox Building A Startup Empire -by Kriti Vichare What Fuels A Startup’s Success: The Drive to Win or Fear of Failure? -by George Deeb 7 Sure-Fire Success Principles -by Daniel C. Steenerson
10 Common Startup Flaws Leading to an Early Demise -by Martin Zwilling How to Avoid Common Startup Blunders
5 Lessons the Special Forces Taught Me about Business -by Michael I. Kaplan Five Startup Lessons for Fast-Growing Companies -by Kit Hickey Entrepreneurs: Here Are 7 Ways to Make the Most of Your Downtime -by Ilya Pozin New Report: Entrepreneurship May Be Contagious -by Lewis Schiff Change Happens to You and Because of You -by Brian Solis Fear - The Entrepreneur’s New Fuel - by Tabitha Jean Naylor Tips from the Startup Fundraising Playbook - by Nathan Beckord 5 Ways for Bootstrapped Startups to Get Through the First Year -by Zach Cutler How to Close a Sale: The Only Thing You Need to Know -by Jill Konrath 10 Reasons Why Small Businesses Fail -by Jared Mumford
6 Ideas for Starting a Business -by Mary Ellen Biery
Why You Should Never Give Up On Your Dreams -by Adriana Langford
In
LETTER FROM
THE EDITOR
2013, there were 21.4 million veterans in the United Stated yet a September report revealed that the percentage of veteran business owners decreased from 11.9% in 2007 to 9.1% in 2012. Many veterans, as well as active military men and women facing a new stage in their lives, have doubts about transitioning from a life in the military to earning a living as a private citizen. However, logic dictates that veterans’ skillset and training learned in the military translates perfectly into the startup space. While serving in the military does not train military men and women how to run a business, it does train you how to be a survivor, an innovator, a forwardthinker and an inspiration. The military trains you to be both a team member and a leader. As honored men and women serving the country, you should know you have a strong foundation to succeed in business. According to many business experts, U.S. veterans are among the most disciplined, malleable, and intellectual people in the world. What you don’t know about running a business, you can learn. If you are in active service but on the brink of leaving the service, you are extremely fortunate because this is the era of startups. And if you’re worried about your age, don’t be because this is also the era of employability.
What is a Startup and Employability? Startup refers to a newly created business. Forbes defines it more intricately as a company that is working to find a solution to an existing problem or gap in goods or services. Just like any new business, there are no guarantees with a startup but there are investors willing to put in funds to support the business idea. Employability is also related to new businesses in the sense that it should boost your confidence that the business world is more interested
in personal attributes, skills, and understanding of skills rather than degrees and diplomas. It completely rakes over the old school method of going through a diploma mill to get hired or be believable in business.
Why a Veteran Fits the Bill for Entrepreneurship There are multiple reasons why you as a veteran will make the perfect entrepreneur. A few of these reasons are: · You can face risk and pressure boldly and know how to manage them effectively. The risks and pressure in starting a new business are daunting. It’s the one reason most people stop short of opening a business or leveling up with their business. You are fearless but you are also taught to be analytical and cautious. You will be great in managing risks and handling pressure. · You know how to improvise and work with limited resources. Most businesses, even the established ones, have to know how to “do without” whether it is lack of funds, time, people, or resources. As military a man or woman, you are an expert in improvisation. You can prioritize, maximize, and stretch your resources to meet goals. Finally, you have been taught to excel, pay attention to details, plan, and dream big. Now is the time to do something for yourself and your family. You have what it takes to be successful as a private citizen. You have a veteran’s skillset and training, which you learned in the military - and this translates PERFECTLY into the startup space. All The Best -
Tabitha Jean Naylor Editor & Publisher
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Lessons for Entrepreneurs From A Navy Seal By Martin Zwilling
You have to be extra tough mentally to be an entrepreneur. While thinking about it, I realized that it’s really not that different from the toughness required and trained into America’s elite military force of Navy SEALs, who are known to be cool under fire, able to sense danger before it’s too late, and never give up on achieving their objective. I just finished a new book “The Way of the SEAL,” coauthored by Mark Divine, who spent many years with the SEALs, and has since started and built six multimilliondollar business ventures. He now teaches the key principles to business leaders through his Unbeatable Mind Academy, focusing on the following lessons and strategies, which I recommend for every entrepreneur: 1. Lead from the front, so that others will want to work for you. To be an entrepreneur or a Navy SEAL, you must first have vision, focus, and the courage to step up to lead. That means visibly walking the talk and willing
to clear a path for others. People want to follow leaders they can learn from, who demonstrate excellence and commitment in all they do. 2. Focus on one thing until victory is achieved. SEALs call this front-sight focus, or the ability to envision your goal to the point that you see it, believe it, and make it happen. Every entrepreneur needs this kind of focus to build a minimum viable product, target the right customer segment, differentiate from competitors, and drive business growth. 3. Think offense, all the time, to eradicate fear and indecisiveness. Indecision leads to doubt, then the two blend and become fear, which signals defense, resulting in being overrun in the business world, as well as the military world. Offense, for entrepreneurs, means
leading with a new business model, new marketing, and new technology. 4. Never be thrown off-guard by chaotic conditions. Smash the box and think outside the box. In the world of the entrepreneur and the SEAL, chaos is the norm, not the exception. Plan for it mentally and physically, and you will see opportunities rather than problems in the chaos. Winning is finding opportunities, rather than fighting problems. 5. Access your intuition so you can make “hard right” decisions. Your intuition is really your knowledge and awareness of your business environment, which must be honed with practice and focus. This knowledge is required for you to turn quickly or pivot based on new input from the market, without loss of competitive position. 6. Achieve twenty times more than you think you can. Set your targets high. Nobody knows what they are truly capable of, with the right discipline, drive, and determination (three Ds). SEALs challenge themselves to find their 20x factor, and entrepreneurs should accept no less of a challenge. Leverage the resources of mentors, investors, and peers. By teaching and practicing the principles behind these six lessons, Mark Divine was able to improve the pass rate of Navy SEAL candidates from less than 30% to over 80%. I see the same potential for improving the success rate of new entrepreneurs from the current 10-year survival rate below 30%, to a new high target of 80% in this new era.
Expanding... He suggests that you start with a self-assessment against the “five mountains” to be climbed on the path to self-mastery and success, with my adaptation for entrepreneurs: • Physical: business as well as technical skills required for the domain you want to enter. • Mental: ability to persevere, make decisions, focus, and visualize success. • Emotional: resilience, open to relationships, keep negative emotions under control. • Intuitional: level of awareness, listen more than speak, strong self-esteem, insightful. • Spiritual: strong values, at peace, willing to make sacrifices, see the big picture. I agree with Divine that if you desire serious change in your life, you can’t get there by focusing on what you don’t want. Becoming an entrepreneur is a great lifestyle, but it is a serious change from other career alternatives. If you decide to be an entrepreneur because you don’t want a boss, on don’t like regular business hours, you may be setting yourself up for failure. Apply the lessons from the Navy SEALs and you too can be an elite warrior who leads and succeeds in the new global business paradigm. Are you up to the challenge?
About the Author I am the Founder and CEO of Startup Professionals, a company that provides services to startup founders around the world. My background includes a 30-year track record as an executive in general management, computer software development, product management, and marketing. I’m now in “give-back mode” as a mentor to startup founders, and an Angel investor. My experience with investors includes roles on the selection committee of two local Angel groups, and working from the other side of the table with several VCs in Silicon Valley. In addition to blogging, I recently released my first book titled “Do You Have What It Takes To Be An Entrepreneur?” You can contact me directly at marty@startupprofessionals.com. Feel free to Circle me on Google+.
80 Ways to Find Your Next Big Startup Idea By Thomas Oppong
You want to build the next big thing? The good news is that it’s not beyond your skills and capabilities if you truly believe you have something great to offer the world. The bad news is that most people don’t get to do it because they make the mistake of trying to solve a problem no one has. The following quote by Steve Jobs is perhaps one of the greatest quotes that can inspire the creative genius in you. Life can be much broader once you discover one simple fact, and that is – everything around you that you call life, was made up by people that were no smarter than you. And you can change it, you can influence it, you can build your own things that other people can use. The minute that you understand that you can poke life and actually something will, you know if you push in, something will pop out the other side, that you can change it, you can mold it.–Steve Jobs Paul Graham sums it all in this short quote about what to create. The very best startup ideas tend to have three things in common: they’re something the founders themselves want, that they themselves can build, and that few others realize are worth doing. -Paul Graham
These are the 80 ways to find your next big idea. 01. Ask yourself how is the current product too complicated?
What simple little thing could you do to just make it simpler.
02. Ask again-why it doesn’t work better and how to resolve the 03.
problem.
Don’t wait for a brilliant, paradigm-shifting, disruptive idea, find a real problem people have and solve it.
04. Look for market gaps in the trail of successful concepts. You
will likely need fewer resources to launch a market gap plug.
05. What are the biggest challenges your colleagues at work face? 06. Go shopping for a few hours and listen to other shoppers talk about products, complain about processes, and just gab.
07. Look for problems that matches your skill set. 08. Find an industry or situation where the customer is getting frustrated on price and the customer experience is poor.
09. Think about combining two products into one. 10. What tasks take up the most time during your day? 11. Explore something completely foreign to you. The freedom from preconceptions will give you some unique insights.
12. Get people commenting and giving feedback feedback about every possible idea you have.
13. Look for problems not ideas. 14. Go to a startup weekend in your city or near you.
15. What inefficiencies do you notice in your daily routine work.
16. Ask yourself: what abilities do you care about or want to enhance?
17. Live in the future and build what people will need.
18. Look out for cues when reading books or
when taking a walk, in the bus, on the train, subway etc.
19. A great start up idea is one you’ll be able to grow continuously. Think long-term.
20. Get your best friends together, complain
about life problems, brainstorm solutions, talk it out, and write everything down.
21. Organize a Meetup or find a meetup to share ideas.
22. Many of the great businesses of the next decade will be about making information about our behaviors more visible.-Evan Williams
23. Don’t think about just one niche, stay open to ideas from all industries.
24. Think of something that everyone does with their friends and make it public.
25. Identify tasks that take time/waste your time.
26.
Ask yourself what was impossible, or unnecessary a few years ago but with technology is possible today.
27. What activity do you dread the most in a given day?
28. Ask random people that you meet what the
biggest annoyances in their lives and jobs are.
29. When you encounter a problem think
through all the possible ways of resolving it.
30. Know about different disciplines, and have
broad knowledge. Innovation often comes from crossbreeding different disciplines.
31. Ask yourself why it hasn’t been improved in the way you think would work.
32. What frustrates you most about a product, in that frustration is an idea.
41. Ideas with no long term value generally fail. Look for what will still be relevant tomorrow.
42. Transform a situation where people are isolated or lonely by connecting them in a novel way.
43. Find an active forum. Make it easier for someone (or a group) to do something they’re talking about doing there, it could be your next startup
33. Stay away from TechCrunch or Mashable and
44. Make use of your favorite to-do app consistently and
34. Put yourself in a new state of mind. Get out of solve a problem you are personally facing.
45. Take a different route home. 46. Look for markets that are not sufficiently served. 47. Think about the most normal, expected solution
around you, a mental flexibility to entertain odd possibilities
48. When you see something that annoys you, think
that habit constantly.
49. Talk about your ideas with friends. Get feedback.
look outside the box your demography.
35. It’s hard to make a good product if it doesn’t 37. Maintain a sense of curiosity in the world
38. Being creative is a habit you get into, maintain
39. Search yourself and look for problems you have yourself.
40. Don’t think up startup ideas. Notice them.
write down your ideas the instant they come to you.
to a problem would be, and then try to imagine the opposite. about how to solve it. Tweak and repeat.
50. Be in-the-know about breaking trends. 51. Look at the most commonly searched phrases on Google trends.
52. Look through the customer service sections of websites and find out what people are complaining about.
53. Find product review forums and read about customer frustration about products.
54. Listen when other people complain. Gather it by listening when people tell you what’s ruining their day.
62. Spend time with successful people in your
network and talk about the same issues. Each will have a slightly different way of thinking about things.
63. Create a Twitter list. Add influential users whose ideas can inspire great ideas.
64. You can also go deeper by tracking registered patents. Innovative products are constantly being protected.
55. Bring an existing idea to a different platform. 56. Study your employer’s business process and
65. The key to problem spotting is to capture
57. Spend time reading about other companies
66. Take a service or approach applied to one
build upon it. i.e. improve it.
and their customer pain points
58. Build something you need in your company,
chances are others need it too. Think Yammer.
59. Copy business-model ideas from another country that have yet to be imported
60. Taking a trip to a totally different environment is always a great way to spot interesting ideas.
61. Try things: Experiment with everything. You’ll
find things you like and things you don’t like.
a long list of problems before you start considering possible solutions.
market, and apply it to another. Cotap is the Whatsapp for business.
67. Take a task that seems tedious and currently requires humans and automate it.
69. Ask yourself if it’s a product you will personally use.
70. Take a single category out of the many offered by tech giants like eBay or Amazon and make it a simple niche business.
71. Pair up people who don’t normally
work together and give them room for brainstorm.
72. The big guys leave a tremendous
amount of opportunity on the table. Look for that niche.
73. Think about your skills and whether they might be useful in a new area.
74. Find a category lacking recent
innovations. Identify markets that haven’t had many recent innovations.
75. Talk to buyers in a niche and consider sending an online survey to potential customers to learn about their needs and interests.
76. Look into how entrepreneurs are
combining social networking with the growing interest in mobile apps.
77. Commit time to specific observation
sessions where you stimulate your brain into thinking differently.
78. Surf the Web differently. Search for terms in other industries. Read on creative thinking.
79. Always be curious and never stop looking for answers.
80. Don’t do things better; do things differently.
About the Author Thomas Oppong is the founder @Alltopstartups. You can reach him at thomas at alltopstartups dot com. Connect with him on Twitter, Facebook, Google+, LinkedIn and Instagram
Start Your Company
LEAVE THE NEST TO START YOUR COMPANY? 8 SIGNS YOU'RE READY BY MARLA TABAKA
Daydreaming about leaving your day job? See if you fit the profile of a successful entrepreneur--or if you're better off staying where you are.
So, you have a great idea for a business. You believe in it with all your heart. (On your better days anyway.) Furthermore, you are really tired of the 8-to-6 grind. (Hey, didn't that used to be 9-5?) On some days you are absolutely certain that it's time to follow your dream and take the plunge into entrepreneurialism. But on other days the doubt, and yes, even the fear, are enough to make you pack your lunch and trek off to another day on the J-O-B. Sound familiar? So, what are
these doubts and fears really all about? Do other people feel like this? Sure they do; you are definitely not alone. Some of the most common uncertainties that keep the would-be entrepreneur bound to his commitments in corporate America relate to the potential loss of financial security, fear of failure, fear of success (yes, you read that right), and lack of emotional support. Frankly, if you want guarantees, it's probably a good sign that you are
risk-adverse...and perhaps not cut out to be an entrepreneur. But if you are close to making a decision between the security and familiarity of your day job and depths of the unknown in the world of small business, this may be the check-list you've been waiting for. In his role as a top-level executive, Paddy Spence has helped numerous emerging brands leverage their success in specialty channels, and successfully cross over into mainstream markets. During his 18 years of executive management experience in the natural and organic consumer packaged goods industry, Spence was vice president of marketing at Kashi and created one the natural industry's first market research firms. Today, he leads the way in his own company as the Chairman and CEO of Zevia, a line of zero-calorie sodas sweetened with the natural sweetener stevia. Spence knows firsthand what it is like to make a choice between an existing job and launching a business. "It's important to be aware of what appeals to you most when you make this decision; whether it's the idea of managing a business or building a business," says Spence. "For me, the excitement came when I had the opportunity to build something based on a cause that is significant to me." So with his knowledge of the natural foods market and his personal mission to reduce the quantity of artificial products and sweeteners that people are consuming, Spence set out to build something new. Is it time for you to do the same? Let's take a look at what he cites as the main differences between his new role as a CEO. "Building a business requires an ongoing level of sustained passion that managing and maintaining a business from a corporate
position requires less of," Spence says. "To be an entrepreneur you need to have a tolerance for immense risk and the ability to wear a lot of hats. Inherently in a smaller, emerging enterprise you will be called upon to do the mundane and unexpected. Your bandwidth in terms of functional skills will be stretched much more. So if you want to be a specialist in one thing only, then managing a business via your corporate job is probably what you're built for." So aside from recognizing whether or not you have entrepreneurial passion and ability running through your veins, what should you have in place before saying goodbye to your comfy corporate cushion? Paddy Spence offers some sage advice.
WATCH FOR THE SIGNS: Spence began waking up in the morning thinking about that day's to do list rather than the next three months—or three years. This increasing short-term focus, along with feeling that work-thoughts were an intrusion when he wasn't at work, were both signs to Spence that he was ready to leave his job. He felt that he was maintaining something in his job rather than building something new and exciting. "When I realized that there was an opportunity to jump into a product category that 96 percent of Americans already purchased; that no one had used stevia as a sweetener across an entire soda portfolio before; and that I was already a huge fan of its all-natural sweetening ingredient," says Spence, "I knew it was a perfect match for me!" START WITH PASSION:
Remember, what defines an entrepreneur is to go beyond thinking about it, ignore the calculated risks and do it.
BELIEVE IN IT: Define a product, segment, or category that you really believe in and combine it with a business opportunity in that segment. This creates a fertile business opportunity. Stevia is a personal passion for Spence. Because of it he is able to live a completely sugar-free life; as an athlete, that's important to him. Spence took that passion and married it up with a business opportunity; a void in the marketplace. Stevia is a great sweetener and no one was maximizing its full potential—until now.
HIRE A GREAT PR TEAM: Spence suggests
looking for a firm that has been there before, knows how the bigger companies do it, who the players are, how to leverage opportunities, and how to identify areas where you can improve over your competition. Find PR people who share a passion for your product and can communicate your brand's message naturally.
KNOW YOUR PLAYERS: Spence had a
close-knit team of people with whom he'd worked throughout his career. There was a level of trust and camaraderie that eliminated a lot of the risk for him. "Personal chemistry is just as important as the written track record of an individual," he says. "It's great if you've done a lot on paper but I've never worked with you I don't know if we are going to have a strong work chemistry."
HAVE A PLAN: careful
financial planning is critical right up front. "All emerging businesses need capital to grow," says Spence. "Understanding those capital needs and how achieve them is important going into it, as opposed to trying to figure it out as you go along."
DO YOUR MARKET RESEARCH: Test and learn.
Try things on a small scale. Begin with friends and family and get their input on what they think of your product or service. From there you can go on to larger control tests where you will identify measurable quantitative results and actionable changes you might make in your product offering. "The larger your sample size the more you eliminate bias," Spence says. "Start out with a small group and expand it to get feedback from hundreds or thousands." Today, our customers and retailers, such as Whole Foods, Target, and Kroger, are our test groups.
Keep your branding simple: "You need to be able to tell the story of brand or product without it being a complicated story," Spence reminds us. "For us, our consumer value proposition is incredibly simple: Zevia has zero calories and no artificial sweeteners, it's all natural. So when I tell people it tastes great, has no calories, it’s all natural and it cost a dollar, that’s a pretty easy sell!"
One of my favorite tidbits from this interview with Paddy Spence is this important reminder: "You are going to learn from your experiences; both good and bad experiences. Regardless of what happens in an entrepreneurial or emerging brand situation, you are going to come out of that experience with more knowledge than when you entered. New risk doesn't make you dumber it makes you more experienced. If you have to go back to the corporate arena, you will be a more valuable employee than when you left."
MARLA TABAKA is a small-business adviser who helps entrepreneurs around the globe grow their businesses well into the millions. She speaks widely on combining strategic and creative thinking for optimum success and happiness. Connect with her @MarlaTabaka and www.inc.com/author/marla-tabaka. *This article was originally published here
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More than half (54 percent) of entrepreneurs in the survey say they started their companies because they wanted to work for themselves instead of having a boss. A majority (89 percent) described themselves as leaders.
Do You Have What It Takes to Start Your Own Business? By Rieva Lesonsky What qualities do successful small business owners have in common? A new survey by Deluxe Corp. sought to find out by asking entrepreneurs about their history, attitudes and characteristics that led to business success. How do you measure up? According to Deluxe:
• Small business owners are comfortable with failure. The road to business success is paved with failures, but that’s OK for entrepreneurs in the study. More than three-fourths (77 percent) say they would rather learn from failure than never try at all.
• Small business owners are optimists. You’ll deal with lots of setbacks and obstacles in your road to business success, so you need to have a positive outlook. In the Deluxe survey, a whopping 86 percent of respondents believe they can do anything they set their minds to.
• Small business owners keep it all in the family. Having family members who have run businesses is a common thread among successful small business owners. Whether it’s learning the ropes of business success at an early age or simply being exposed
to the realities of entrepreneurship that makes the difference, more than three-fourths (76 percent) of small business owners Deluxe polled have a family member who owned a small business. • Small business owners like to be in charge. More than half (54 percent) of entrepreneurs in the survey say they started their companies because they wanted to work for themselves instead of having a boss. A majority (89 percent) described themselves as leaders. • Small business owners like to get things done. You may be dreaming about starting a business, but for business success, you need to take the next step. Seventy-eight percent of entrepreneurs in the survey describe themselves as doers and 80 percent say they’re practical (80 percent). Of course, not all small business owners are the same, and there are many reasons to start a business. Deluxe found the small business owners in the study fell into one of seven categories: 1. All Heart: These entrepreneurs started a business to do
what they love and share it with others. 2. Encore Career: These entrepreneurs are older, entering a second phase of their careers, and took a risk with starting their own businesses. 3. Passionately Confident: These risk-takers are born business owners who believe in choosing their own paths in life. 4. All in the Family: Traditional types, these entrepreneurs inherited the family business. 5. My Way: These entrepreneurs were motivated by taking back control of their time. They started their companies to gain control over their schedules and hours. (They’re more likely to be women). 6. Mastering the Niche: What we think of as the classic entrepreneur, these business owners saw an opportunity and wanted to capitalize on it. 7. Boss-me-not: These former business professionals left their for-profit, corporate jobs because they wanted to be their own bosses. Isn’t it good to know that, whichever category you fall into, you can make a go of your business?
About Rieva Lesonsky Rieva Lesonsky is CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email Rieva at rieva@smallbizdaily.com, follow her on Google+ and Twitter @Rieva, and visit her website SmallBizDaily.com to get the scoop on business trends and sign up for Rieva’s free TrendCast reports.
Legal Corner
Why Startups Hire Their Own Lawyers By Daniel Doktori Airbnb challenged local hotel zoning laws, Uber took on taxi licensing requirements, and Pinterest built a business around posting copyrighted images. Startup companies that simply follow the rules risk getting left behind. The right lawyer can mean the difference between pushing the envelope and breaking the law. Many startups struggle to decide whether and when to hire a lawyer and how to make the most of their in-house attorney once they do. I asked several prominent General Counsels of tech companies (and one VC fund) about their work and about how their companies approached the decision to hire them. Here’s what they said.
“Being general counsel is like being Tom Hagen in the Godfather – you’re a Consigliere,” the top lawyer at a New York City startup recently explained. But to achieve that kind of trust, “you need to understand where the founders are coming from – the sacrifices they had to go through to build their business.” Startup companies hire for “fit” into a company culture that celebrates and demands risk-taking – a quality not typically associated with lawyers. So when startup CEOs recruit their first inhouse attorney, they look for someone who can replace “no, because,” with “yes, if.”
Why Do Startups Hire Their Own Lawyers? “Lawyers are not engineers. They don’t reliably produce products on a daily basis, but instead provide a strategic, long-term value proposition focused on smart growth and risk-management,” explained one Startup General Counsel (GC). A typical assignment for a startup GC arises when a business idea confronts the question: how can we do this legally? The answer generally falls into one of several categories: how to protect intellectual property; how to hire, fire, and compensate employees; how to hold regular board meetings and ensure company officials honor their duties to shareholders; how to advertise in compliance with federal rules; how to enter into agreements to partner with other companies; how to maintain user privacy; how to sell things online; how to respond to government requests for user data.
GCs pride themselves on their ability to “get smart fast” on legal issues facing the company (it helps that they no longer get paid by the hour). When getting smart fast is either not smart enough or not fast enough, the general counsel acts as a savvy procurer of legal services by knowing which lawyer to hire for what and how much to pay. As one explains, “I ask myself, ‘can we stage the legal costs?’” Another adds, “I come in with some very basic questions and I say, ‘for the love of god, don’t write me a memo. Let’s contain the legal costs to X.’ Then it’s lather, rinse, repeat. I do some more research and see if I need more from outside counsel after that.”
When Do Startups Hire Their First Lawyer? Conventional wisdom indicates that a startup’s first lawyer will have had four to 10 years of experience in a broad-based corporate practice, preferably one where the clients were themselves startup companies. Less conventional wisdom exists on the subject of when a startup company should hire that first in-house lawyer. Some startups look for a costbenefit threshold of legal bills (about $300,000) that can be managed by bringing someone in house. Some see company size as the relevant metric, with one GC asserting that once a company has 10 employees, it should be hiring a full-time operations person to handle Chief Operating Officer duties (often times a lawyer who is not referred to as solely “general counsel”).
How do Startup General Counsels Work?
time. Sometimes, it’s a lack of stomach for the attendant risk: “We’re not taking any heavy actions without getting ‘adult supervision.’”
At a startup company, speed counts. Driven by an ethos of “trust but verify,” many Startup GCs stress the importance of following their instincts. “You can say what you think and then go back and check. Things are moving fast, so the mostly right answer today is better than the perfect answer tomorrow.”
HOW DO STARTUP GENERAL COUNSELS INTERACT with the CEO?
As a result, the single most important tool for a successful startup general counsel is a big rolodex. “Google is great. Friends are better,” quipped one GC, but Google remains first stop in the standard three-step process of “Internet research,” “outreach to the legal network,” “hire outside counsel.” As one startup lawyer puts it, “I’ve come to realize that every answer in the world is out there [on the Internet]. The decision is whether or not to spend the time finding it.” Internet research is important in priming the set of questions to ask one’s colleagues, because they have other priorities as well. “You need to pick your spots” when asking colleagues for help. One way to pick more spots is to grow your network. One General Counsel created a group of local general counsels upon being thrown into a job which seemed overwhelming at first. “I said let’s share information – you go first!” Another General Counsel joined the local State Bar Association’s corporate counsel group. “I now have buddies around town.” A good startup general counsel has a keen grasp of what former Defense Secretary Donald Rumsfeld termed the “known knowns,” “the known unknowns,” and the “unknown unknowns.” Generally, all litigation is farmed out. Further, a general counsel may seek insight from outside counsel in case of lack of experience, or lack of
Being perceived as the “no guy” ranks among a startup general counsel’s top fears. “You don’t want to be the guy at the end of the hall that just says ‘no,’ because eventually people don’t incorporate you into the conversation.” Another explains, “if you want the CEO to trust you, you need a track record of not always saying no.” Some general counsels have even eliminated “no” from their vocabulary. “It’s not the GC’s place to say no. It’s the GC’s place to expound on the risk and if there is something that is super risky, make that clear, but leave the call to the CEO.” A problem-solving stance and a deep understanding of the company’s product help GCs avoid unnecessary nos. More than avoiding trouble, some GCs see their understanding of public rules and perceptions as an opportunity to lead. One GC explained that he filters his own legal advice through the lens of the customer: “If you’re reading [the customer] correctly,” and you have an internal reputation for doing so, your legal advice, whether restrictive or progressive, “will be an easy sell.” * This article was developed through a series of interviews generously granted by the following general counsels: Sarah Reed, Charles River Ventures; Brian Chase, Foursquare; David Pashman, Meetup; John Geschke, Zendesk; Sarah Feingold, Etsy; Doug Hicks, AVOS Systems; Jared Cohen, Kickstarter.
About the Author: Daniel Doktori is an associate in the emerging companies practice at WilmerHale in New York City and is the co-founder of the Harvard Law Entrepreneurship Project. Follow him on Twitter @ddoktori. * The article first appeared in Tech Crunch on January 4th, 2014.
Trust Pros and Cons of Joining a Business Accelerator Program By Jerry Jao Joining a business accelerator program isn’t the right choice for every entrepreneur, and it doesn’t guarantee success. For a selected few, however, it provides a much-needed jumpstart towards a more promising future. My third company, Retention Science, is a graduate of MuckerLab, a mentorshipfocused accelerator based in Santa Monica, California. Here are my thoughts on the pros and cons of accelerator programs.
Pros 1. Curriculum and Clear Structure Business accelerator programs typically consist of three to six months of crash courses, speaker series, and professional workshops designed to help you learn a lot in a very short period of time. Certain accelerators conclude their programs with a Demo Day, where
entrepreneurs publicly debut their products to a group of peers, tech reporters, and investors. By establishing a clear schedule of classes and milestones, the program helps entrepreneurs stay focused and reinforces the need to be agile and move fast.
2. Marketing and PR You can count on your accelerator to be one of your biggest advocates to the outside world. The accelerator helps develop your marketing strategy and identify the right positioning for your products. And, when it is time, it helps you identify the proper outlets to publicly launch your company. If you’re part of a well-respected accelerator, chances are tech reporters, potential customers, and even investors will be more interested in your company news. This is why the reputation of your accelerator matters.
3. Funding Accelerators typically provide $20,000-$50,000 in startup capital to each company. Different
accelerators have differing policies and funds. While funding is important, I’ve heard many entrepreneurs share this repeatedly: do not choose one accelerator over the other because it offers you $35,000 versus $25,000. Your decision should be solely based on the quality of the partners, network of mentors, and curriculum – in the grand scheme of things, a few thousand dollars will not save your company, but knowing the right contacts will.
4. The Perks: Discounts, Freebies, Social Events Each accelerator offers different perks, but examples may include free legal advice, financial planning support, access to design agencies, discounted package for web servers, social events, and many more.
cons 1. Company Equity On average, accelerators require between 5–10% of company equity in exchange for all of their great benefits. This is a lot of company equity – do your research so you know for a fact that you will gain a lot of value by joining the accelerator. On a side note, I’ve heard of unique cases where accelerators take less equity than normal. For example, if a company is already far along in development (i.e., significant number of customers or users), certain accelerators might negotiate with you. It’s worth a shot.
2. Unsuitable Network for Your Business Not all accelerators are created equal. Some might
About the Author Jerry is the co-founder and CEO of Retention Science, a leader and innovator in retention marketing. Previously, Jerry was an analyst with Morgan Stanley, an engagement manager with BearingPoint Management Consulting (KPMG Advisory) and, most recently, an advisor to the CFO of Clear Channel, working on digital initiatives such as iHeartRadio. Jerry is a graduate of UC Berkeley, where he earned a bachelor’s degree in business administration and a full-tuition scholarship as an Alumni Scholar; he also attended Yale School of
not have the right network to add value to your business. For example, an accelerator may have considerable experience in building e-commerce businesses, but know little about scaling mobile apps. Quality accelerators should not offer you a spot if they know they cannot make a meaningful impact on growing your business. But, don’t just count on them to make the call. Do your research.
3. Less Support Once You Graduate While accelerators are great for launching your company, you shouldn’t expect the same level of support after you graduate from the program. It’s imperative to maximize all of the resources during the official program, because once you’re no longer working out of the shared office space, fewer opportunities will exist.
4. Commitment & Risks Joining an accelerator is a serious commitment, and it does not guarantee success. For some entrepreneurs, it sometimes means leaving family behind for a couple of months, relocating to a different city, or taking out more loans to support themselves. While the goal is to accelerate your company growth, there are still many companies that drop out of the program or fail to complete building a product that meets market demand. Keep in mind that accelerators can help you a great deal, but they do not mitigate your risks of failing. The right business accelerator program can open many doors for you, but as I was once told, we still have to “walk into those doors.” Whether or not you decide to join an accelerator, keep in mind that, at the end of the day, it’s still up to you to develop your idea, prioritize your long list of must-dos, and execute.
B
elieve it or not, the military does an excellent job in preparing veterans to start and run their own businesses. As veterans, we learn a lot of skills that are very important to being a successful entrepreneur:
• • • • • • •
Leadership Teamwork Discipline Perseverance Dedication Preparation Adaptability
In fact, in many cases, entrepreneurs have limited success or outright fail because they lack these skills. But the military doesn’t teach us a lot about how business works. Most soldiers and veterans know very little about basic business fundamentals such as:
• • • • • • • •
Business Finance Accounting Legal Taxes Contracts Sales Administration Equity/Debt Funding
The good news is you can learn business. It’s harder to be a business expert and have to learn leadership than the other way around. When I talk with veterans about their business ideas, the same questions tend to come up over and over – which is good for two reasons: these veterans are thinking about the right questions, and I can help answer them. But the number one question I get in almost every conversation is this:
How Do I Fund My Startup? This was the number one question on my mind when I wanted to start my own company too. I knew I had a great business idea and wasn’t afraid of putting in lots of hard work. I just didn’t know how to get the money I needed to get going while still paying my mortgage and buying groceries. Luckily, we live in a time when it is easier than ever to not only start a business but also to finance one. Better yet, we also live in a time when you can learn what you need to know when you need to know it, and we can find people who can help us more easily than ever. Even better, as a veteran you have access to some resources and privileges that civilian entrepreneurs don’t. Here are eight ways you can fund your startup idea. Ultimately your business model, experience, and a number of other factors will help you determine which combination of these are best for you. But this list should help you get thinking about how to take the next step. **NOTE** The best source of funding is REVENUE. Keep your costs low and maximize your revenue so you can use your profits to finance your business growth.
#1: Business Credit Cards 7% of all small business financing comes from either personal or business credit cards. You can use your personal cards to finance your business early on, but ultimately you really want to use business credit. Business credit is different than personal credit. You can have terrible personal credit, but if your business always pays its bills on time, you can begin to establish great business credit.
In order to establish a separate line of credit for your business and avoid personal liability for your business credit cards, you need to form a corporation (I recommend forming an LLC in your home state), register your business with credit bureaus (such as Duns & Bradstreet), and apply for the right types of business cards. Note that some banks market personal credit cards as “business cards” so be sure to look carefully at the terms to make sure you are not personally liable for the credit debt.
#2: Friends and Family Funding Borrowing money from your friends and family is the second easiest funding source because it’s easier to establish credibility with people who know you well and they’d be more likely to help you out instead of a stranger asking for money. You can raise friends and family money in two ways: debt or equity. Debt simply means you are borrowing money in the form of a loan, whereas equity means you’re selling a percentage of ownership in your company to them. If you are borrowing money in the form of a loan – even if it’s from your parents – make sure to document the terms of the loan in the form of a
promissory note. This document basically describes the terms of the loan, such as the amount borrowed, when and how it will be paid back, any interest due, etc. As your company grows and you pay back this loan, this will go a long way to proving to banks that you are credit-worthy for borrowing from institutions as well. If you are selling a percentage of your company to a friend or family member, you need to incorporate your company (again, an LLC in your home state is best for now) and in 95% of cases you will want to hire a lawyer to set up all of the necessary documents. Make sure that you and your new part-owner both agree on the value of the company, the use of the money, and their percentage of ownership. Also make it clear (in writing) what voting rights and ability to direct the company both you and any other owners have.
#3: Business Loans
Most business loans come in the form of a Line of Credit, which can fluctuate in maximum borrowing amount based on some metrics of your company’s financial performance, like debt-to-equity, average accounts receivable, etc. When looking for business loans, stick to conventional institutions such as banks and credit unions. Just like with personal pay-day loans, there are some sketchy companies online that lend you money with awful terms. So be careful with whom you do business. You’ll need to be really buttoned down on your business plan, financial statements, and other legal documentation when you approach a bank. Banks assess risk in a number of ways including your personal credit history. It may be difficult to get a business loan for a startup company – especially if you won’t have a lot of physical collateral (like furniture and equipment). The Small Business Administration (SBA) recently extended their Veterans Advantage program that waives the 3% SBA fee for loans made by lenders to veteran-owned small businesses. Veterans can borrow up to $350,000 without having to pay the SBA fee, which can save them up to $10,500 in fees. Other SBA loan programs useful to veterans include the SBA Microloan Program and the SBA Express Loan Program.
#4: Equity Financing If you’re starting a company that requires a significant amount of investment but can’t get the financing you need from credit, friends & family, or banks, you may want to consider raising equity funding. Banks, credit unions, and franchisors all lend money to small business and sometimes even to startup companies. Usually loans are secured by collateral – meaning the things you buy with the loan can be repossessed and resold by the bank in the case you default on the loan.
When you raise equity financing you are selling shares of your company for a certain amount per share. For example, if your company is valued at $1,000,000 and you need to rise $100,000, you could sell 100,000 shares each valued at $1.00. If you sell 100,000 shares, you would have sold 10% of the ownership if your company.
You need a lawyer to help you do this. Trust me. There are a number of documents that have to be created and the angel investors may want to work with you and your lawyer to alter some of the terms and conditions of the equity sale. The key to a successful equity raise is to know the value of your company. Investors will want to invest in something that provides a significant return, and entrepreneurs want to retain as much of their ownership as possible. Just remember this: pigs get fed and hogs get slaughtered. Work with your potential investors and your advisors/ mentors to come up with a reasonable valuation.
$50K in services to winners of a semi-annual competition to get into the program. Only 6 companies are accepted each 6-month period. The VIP program provides all sorts of educational training for vetting ideas, concept development, financial forecasting, etc. along with various levels of cash (depending on the business needs).
#6: Fundraising
I could write for hours about this topic. You can read more about my thoughts on raising equity at my website.
#5: Business Incubators While only 44% of all businesses remain in business after 4 years, 87% of businesses that go through incubator programs are still in business after 10 years. That’s a pretty effective improvement in business reliability. Incubators are like boot camp for business. These are programs that usually last from 2-6 months and provide a small company everything they need to get started. Legal, financial, marketing, employment, administration, and other forms of support are provided to the entrepreneur. Most incubator programs provide a modest cash injection (anywhere from $5K to $250K on average) which is used by the founder to implement some of the things they learn in the incubator or pay for limited operational costs. Incubators can be found all over the country – there’s hundreds of programs out there. Two that I really like are Capital Innovators in St. Louis and the Veteran Incubator Program (VIP) in Dallas. Capital Innovators provides $50K in funding and
A former employee of mine had a great idea for a new mobile app product, but needed some sort of funding to at least get started. He created a Kickstarter campaign (check out his campaign here) and raised more that $100K in the span of a few weeks. Fundraising sites like Kickstarter, Indiegogo, and others allow small businesses to raise cash through pre-sales of products or selling special incentives like naming rights to a product or giveaways like T-Shirts. A whole slew of other fundraising sites have sprung to life recently because of some recent changes to the laws that govern who can invest in a company. Normally to invest in a company you have to have a personal net worth of more than $1M and be registered as an investor. Now more people can invest in companies (the laws are still hazy so tread with caution here) through these fundraising sites.
I recommend taking a look at some of the more successful fundraising campaigns like this one to see what works and what doesn’t.
#7: Joint Venture Partnerships Several years ago when I ran my first startup company, we were building a highly complex hardware/software device to sell to the military. We scraped together the first $750K through an equity raise, revenues from service sales, and a bank loan. This got us to our Minimum Viable Product (our prototype) but we needed several million dollars to go to production. We were able to sign a Joint Venture Partnership (JVP) with a large defense contractor who provided more than $3M in capital to cover the costs of engineering, manufacturing, production, and distribution of the product. In doing so we gave up naming rights and they put their logo on the box, but we couldn’t have built it without this partnership. If you have a great big idea and know that it might be of interest to a larger company, consider approaching a few companies about a joint venture. You will definitely want a lawyer involved in negotiating these kinds of deals to protect yourself. A lot of JVPs end poorly, so you want to be prepared for a breakup even if you are head-over-heels in love in the honeymoon phase. The key with a JVP like this is to retain as much creative, design, pricing and branding control as possible. The JVP you want would allow you to continue to control the development, marketing, and pivoting of the product as necessary without having the larger partner slow you down.
#8: Take over an existing business Not a lot of people think about this as a way to become a small business owner. There are a lot of entrepreneurs out there who run successful small business but might be ready to retire and hand the business over to someone else. You would go to work for the entrepreneur as a general manager or similar role while they retain complete control of the company and ownership. But over time you take more and more of the ownership and control of the company until you are the majority (or sole) owner of the business. This transition is typically handled in the form of a long-term buyout (where you pay cash for shares over a period of years) or through measurements in how you have grown the business. The SBA actually has a halfway decent guide for this process. In the end every deal will be different but generally speaking this is a great way to become a business owner without having to go through the startup process.
From the Author There are a lot of other important questions that need to be asked and answered before starting a company. With Soldier to Startup, my goal is to compile all of those questions, give as many answers as I can, and help as many veterans start and run their own businesses. To learn more about how to fund your startup along with a lot of other great advice, examples, and resources, visit our site at www.soldiertostartup.com, join us in our Facebook group at www.facebook.com/soldiertostartup and follow us on Twitter @soldier2startup.
Empire
Building a Startup
By Kriti Vichare
2. “Oooooh features! I love
“Rome wasn’t built in a day either...”
features!” Wantrepreneurs don’t create a foundation and work incrementally, but instead fast forward and jump in the deep end before learning to swim.
I first saw this unapologetic declaration on a billboard sign on a highway that is perennially under construction. And it always reminds me that startups have to be treated the same way. Entrepreneurs and wantrepreneurs approach creating a startup empire differently. Firstly, what’s a wantrepreneur? They are the eager beavers who may look, act, and seem like entrepreneurs - but all without owning an actual business! Let’s examine the wantrepreneur scenario when building a startup empire:
1. This is the one…the idea of the
century!” Wantrepreneurs rarely focus on the problem to solve.
3. “I’ll just whip together
the business in no time!” Wantrepreneurs always underestimate the time it takes to grow a business.
4. “If you build it they will come.”
Wantrepreneurs believe the only thing stopping them from customers, is the lack of product.
5. “Money… I’ll figure it out
later.” Wantrepreneurs severely minimize the needed funding for their projects.
To build an empire you need a foundation, vision, support, and patience. Serial entrepreneurs know this; it is second nature to them. As they move with tremendous speed, they know they have to learn to walk
before they run. A scalable, repeatable business model is necessary before expanding too big or out of reach.
About the Creator This comic was created by Kriti Vichare and Shivraj Vichare. It was inspired by the ironies they have seen and have experienced in their small business ventures. You can find their comics on www.entrepreneurfail. com. They are the creators of the book Cheating on your Corporate Job: A Comic Look at the Startup Dream.
Special Spotlight Feature:
The Journey to Startup Success
What Fuels A Startup’s Success: The Drive to Win or Fear of Failure? By George Deeb
The age old debate about what fuels a startup’s success is whether they are “driven to win” or have a “fear of failure”. In this lesson, we are going to try and resolve this question, once and for all. I think both sides of this argument are pretty self-explanatory, but let’s just make sure we are clear on what we are talking about here. Being “driven to win” is an insatiable desire to be #1 in your industry, often with a “take no prisoners”
mindset of growing market share as quickly as possible. The CEOs of these types of businesses often have a deep disliking of their competitors, and see themselves in a “all-out sprint” against the CEO’s of others in their space. On the other hand, “fear of failure” is driven more by not wanting the company to go out of business, and the perceived negative impact that would have on the CEO’s resume and reputation. To me, the former feels more akin to an “offensive” strategy, and the latter feels more like a “defensive” strategy.
So, if that is in fact a good analogy, are you aware of any competition that doesn’t require the proper balance of both a good offense and a good defense? I really think if you have too much of one, without the other, your success will be hampered. As one example from the sports world, do we all remember the failed Rich Rodriguez tenure as head coach of Michigan Football between 2008-2010. His innovative offense broke every statistically record, as the most productive offense in the 132 year history of this storied program. While at the same time, his lack of defensive focus, broke every statistically record in the wrong direction, as the worst program in the history of Michigan football. This lop-sided mix of skills, resulted in a middle-of-the-road record (7-6 in 2010), and the ultimate firing of Rich Rodriguez at the end of that season. This analogy holds true in the business world, as well. All offense and no defense, can cripple your company. If you are too scared to fail (e.g, too much defense), that may cripple your ability to innovate out-of-thebox ideas, that if successful, would catapult your business to new heights never before possible. Let’s use Apple as an example. What if Steve Jobs had stayed “defensive”, focusing on protecting Apple’s marketshare as the leader in personal computers. We would have never seen such great innovations as the iPod, iTunes, iPhone and iPad that revolutionalized the tech scene in the years that followed, fueling Apple’s meteoric growth and stock price. And, on the flip side, if you
try to use too much “offense”, you can cripple your business by growing too quickly, or running out of cash, or entering more markets than logically makes sense for your phase of development, stretching your limited resources too thinly to be sustainable. I think this theory holds true from my personal experience while CEO of iExplore. I was equally focused on “offense” and “defense”. I was deeply-driven to win market share and partnerships away from my competitors at the time, like Away.com, Gorp.com, and AdventureSeek. I wasn’t going to rest until we had the largest website and most strategic partnerships locked up. While, at the same time, I had a deep fear of failing, especially in the wake of 9/11/2001 and the negative impact that had on the travel industry. I wasn’t going to let Osama Bin Laden end my dream or taint my track record, and I fought on through very difficult market conditions, even though the odds of success were not in my favor. Without the “offense”, we would have never built up a #1 market position and partnerships with National Geographic, Travel Channel, Expedia, Travelocity, Lonely Planet, Fodors, Frommers, Conde Nast and others. And, without the “defense”, it would have been a lot easier to simply file for bankruptcy in 2001, given the uphill battle that laid ahead. So, it is not whether you are “driven to win” or have a “fear of failure”. To me, startup success needs an equal balance of both, for “offense” and “defense”.
About the Author: George Deeb is the Managing Partner at Red Rocket Ventures, a growth consulting, advisory and executive staffing firm based in Chicago. Red Rocket is also a founding member of Ensemble, an allstar powered “Digital Services Suite”. You can follow us on Twitter at @georgedeeb, @RedRocketVC and @EnsembleHQ.
7Success Sure-Fire
Principles By Daniel C. Steenerson
Success is something everyone wants but only a few achieve. However, it doesn’t have to be that way. No matter where you are in your business – from startup to seasoned veteran – there are principles you can apply to ensure your success. Below are seven sure-fire success principles you can start using right now:
1.
Work with relentless urgency. Getting up and showing up are a great start but if you want success in your business – or in any part of your life – you have to be willing to work, and work hard. The Army’s slogan from the early 1980s was, “We get more done before 9 a.m. than most people get done in a day.” It’s that harddriving work ethic that will set you apart from the pack and create opportunities that will open the doors to success.
2.
Apply a disciplined approach. Discipline
3.
Focus on implementation. Closely related to discipline is implementation. This is simply the principle of carrying out and accomplishing the goals and plans you created, ensuring actual fulfillment by concrete measures. You can dream and plan and set goals for yourself all day but if you do nothing tangible to see those goals through, you are simply spinning your wheels and wasting time. Implementation is the step that transitions plans into results.
4.
Simplify whenever possible. Why take
is defined as a system of rules governing conduct or activity. When you wake up in the morning, do you have a systematic plan of what you are going to accomplish and how you are going to accomplish it? If not, you can’t expect to move forward in your career in any meaningful way. Begin using a disciplined approach by first setting goals and then planning activities that will achieve those goals. Finally, measure the success of your activities and then adjust your plans accordingly.
two dozen steps to accomplish something if you can get it done just as effectively in only three or four? Simplification is a critical part of achieving maximum results with the least amount of effort. Working hard is important but using your time in the most effective way possible is even more important. Simplifying processes
whenever possible makes it much easier to accomplish more in less time. It also makes it quicker and easier to share your knowledge and bring team members up to speed when necessary.
5.
6.
you to become an expert in your field. Another great way to increase your skills and understanding is to read – read anything you can get your hands on that can help you become more knowledgeable and effective. Fiftyeight percent of people never read non-fiction books after they graduate from high school, so simply picking up a book and reading it will help establish your expertise and set you apart from your competition.
Embrace discomfort.
Nobody likes to be uncomfortable and it’s a natural inclination to avoid discomfort. However, in order to be successful, you must be willing not only to be uncomfortable but also to embrace discomfort. This means the willingness to give something up in order to gain something, such as giving up comfort in order to gain forward momentum. This can mean working late to ensure goals are met or making lifestyle changes in order to be able to invest in a new venture. Either way, sacrificing comfort now can enable you to take the steps you need to achieve future success.
Continually develop your skills and knowledge. This
is another way in which embracing discomfort has a large payoff. Taking courses to gain certifications along with expanding your knowledge base of your industry is a fantastic way to move forward and be more successful in your career. Wake up early to study if you need to but make sure you take advantage of all the classes and instruction available to
7.
Develop the right relationships. It’s not only
the relationships you develop with your company’s clients that are important. Developing good, healthy relationships with colleagues and employees is an important step in business success. These are the people who can influence your business’s growth – for better or worse. Ensure that influence is working in your favor by identifying ways to help employees and colleagues achieve their goals and objectives. Your assistance will help establish you as a go-to person within your industry and position you for small business success.
Success might not be easy but it is achievable. There will always be setbacks but perseverance, dedication and drive eventually yield success. Follow these seven sure-fire success principles and you will find yourself enjoying the success you’ve always wanted.
About the Author Daniel C. Steenerson imparts his success wisdom, principles and philosophies through his proprietary “Science of Visioneering” approach to help companies, entrepreneurs, executives and other professionals realize business greatness. He may be reached online at www.DanSteenerson.com– an online community where business owners, executives and other career achievement-minded professionals go for no-nonsense, “tell-it-like-it-is” success advice.
10
COMMON STARTUP FLAWS LEADING TO AN EARLY DEMISE BY MARTIN ZWILLING
1 2 ased on my experience as a mentor and an entrepreneur, if you fail on your first startup, you are about average. That’s not bad, but who wants to be average? Every young entrepreneur knows implicitly that startup success is a long, hard road. Statistics show that the failure rate for new startups within the first 5 years is higher than 50 percent. How can you improve your odds? Of course, a real entrepreneur always takes a failure as a milestone on the road to success. They count on learning from their mistakes, and use the experience to move to the next idea. But why not learn as well from the mistakes of others, without suffering their cost, time, and pain? In that context, I offer you my list of ten top startup failure causes, seen over and over again:
3 4 5
NO WRITTEN PLAN. Don’t believe the old urban legend that a business plan isn’t worth the effort. The discipline of writing down a plan is the best way to make sure you actually understand how to transform your idea into a business. Take heed of the words of an old country song, “if you don’t know where you’re going, you might end up somewhere else.” BUSINESS MODEL DOESN’T MAKE MONEY.
Even a non-profit has to generate revenue (or donations) to offset operating costs. If your product is free, or you lose money on every one, it’s hard to make it up in volume. You may have the solution to the world hunger problem, but if your customers have no money, your business won’t last long. IDEA HAS LIMITED BUSINESS OPPORTUNITY.
Not every good idea is a good business. Just because you passionately believe that your technology is great, and everyone needs it, doesn’t mean that everyone will buy it. There is no substitute for market research, written by domain experts, to supplement your informal poll of friends and family. EXECUTION SKILLS ARE WEAK.
When young entrepreneurs come to me with that “million dollar idea,” I have to tell them that an idea alone is really worth nothing. It’s all about the execution. If you are not comfortable making hard decisions, taking risk, and taking full responsibility, you won’t do well in this role. Remember, the buck always stops with you. THE SPACE IS TOO CROWDED ALREADY.
Having no competitors is a red flag (may mean no market), but finding ten or more with a simple Google search means this may be a crowded space. Remember that sleeping giants do wake up if you show traction, so don’t assume that Microsoft or Proctor & Gamble are too big and slow for you to worry about.
6 7 8
NO INTELLECTUAL PROPERTY.
If you expect to seek investors, or you expect to have a sustainable competitive advantage against sleeping giants, you need to register all your patents, trademarks, copyrights, and trade secrets early. Intellectual property is also often the largest element of early-stage company valuations for professional investors. INEXPERIENCED TEAM.
In reality, investors fund people, not ideas. They look for people with real experience in the business domain of the startup, and people with real experience running a startup. If this is your first time around, find a partner who has “been there and done that” to balance your passion and bring experience to the team. RESOURCE REQUIREMENTS NOT UNDERSTOOD.
A major resource is cash funding, but other resources, such as industry contacts and access to marketing channels may be more important for
certain products. Having too much cash, not managed wisely, can be just as devastating as too little cash. Don’t quit your day job until new revenue is flowing.
9 10
TOO LITTLE FOCUS ON MARKETING.
Viral marketing and word-of-mouth are not enough these days to make your product and brand visible in the relentless onslaught of new media out there today. Even viral marketing costs real money and time. Without effective and innovative marketing across the range of media, you won’t have a business. GIVE UP TOO EASILY OR EARLY.
In my experience, the most common cause of startup failure is the entrepreneur just gets tired, gives up, and shuts down the company. Many successful entrepreneurs, like Steve Jobs and Thomas Edison, kept slugging away on their vision, despite setbacks, until they found the success they knew was possible.
Note that the lack of a university degree or MBA is not even in the list of common failure causes. In fact, we can all point to examples of successful entrepreneurs who dropped out of college, like Mark Zuckerberg and Bill Gates, but still went on to be way above average. The most important thing you can learn in school is how to learn. The best entrepreneurs value “street smarts,” in addition to “book smarts,” to temper their passion with reality principles, like the ones listed here, to stay ahead of the crowd. It’s good to say you never make the same mistake twice, but success is even sweeter the first time around with no mistakes. Go for it
About the Author Martin is the CEO & Founder of Startup Professionals, Inc., a consultancy focused on assisting entrepreneurs with mentoring, business strategy and planning, and networking. Martin for years has provided entrepreneurs with first-hand advice, mentoring and business plan assistance as a startup consultant. He has a unique combination of business and high-tech experience, and executive mentoring and connecting startups with potential investors, board members, and service providers.
How to Avoid E Common Startup Blunders
ntrepreneurs bring approximately 543,000 new business ideas to fruition every month, transforming and evolving the consumer landscape with everything from specialty grocery stores to jewelry shops. But with the average cost of starting a new business burning a $30,000 hole in most owners’ pockets, cutting costs without cutting corners can be a major challenge for both experienced retailers and industry newcomers. Despite arguments that for how critical public awareness is for retail success, allotting marketing
MEET THE EXPERT:
Tabitha Naylor,
marketing pro and founder of SuccessfulStartup101.com
your physical storefront are just a few of the many tips Tabitha shared with us in our recent Podcast series on building your small business while avoiding common start up pitfalls. Listen to the full podcast below. You can also jump ahead to key talking points by referencing the index below, or click over to the full transcript.
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1:10 About SuccessfulStartup101.com
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3:55 Defining modern day marketing
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6:15 What differentiates inbound and outbound marketing
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9:18 How small businesses can incorporate inbound marketing into their business strategies
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10:25 Why ROI is important in marketing, and other helpful metrics retailers should be aware of
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12:45 Simple ways to increase ROI
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15:35 Tips on common outbound marketing approaches
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17:00 Top tricks for accurately measuring ROI
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17:55 What should be on every business owners’ startup checklist
dollars from an already limited budget can seem a stretch for many entrepreneurs. That small business struggle — of managing your bottom line while being conscious of the proactive steps required to get ahead — was the inspiration behind sales and marketing expert Tabitha Naylor’smarketing consultancy practice and business advice site,SuccessfulStartUp101.com. “Over the years of speaking with business owners I came to recognize that many operators end up making the same mistakes as their peers,” says Naylor. “It doesn’t matter where they are geographically, what niche they’re in, it’s just human nature that, unfortunately, we end up making common mistakes that others already have experienced and that end up costing us in the long run.” The economic feasibility of startups and small shops requires creativity, perseverance, and perhaps a little insight from industry peers when it comes to critical business components, like marketing. Blogging, social media, and a web presence to match the feel and sophistication of
This has been an installment of Kimco Realty’s StoreFront, an interview series with leaders of successful retail businesses. For more interviews, visit the StoreFront page. To learn how you can be featured, email us. We’d love to hear from you.
5 Lessons the Special Forces Taught Me about Business By Michael I. Kaplan
Last month I had the pleasure of speaking at a Wounded Warrior Project workshop on business and entrepreneurship in Tampa, Florida. During our question and answer session a young veteran made a statement that I found incredibly interesting and served as the inspiration for this article. The gentleman – a US Army veteran who served as a sniper instructor and team leader – prefaced his question about resume writing with the following statement: “I was an infantry team leader and a sniper instructor, which doesn’t have any real value in the corporate world. So, I wanted to know if you could tell me how …?” Stop right there. I vehemently disagree. Veterans entering the civilian workforce have to understand that their resumes should actually reflect much more than hard skills
1. Planning is essential, but contingency plans are critical. In the military we rely on the Operation Order to guide or missions, hoping that the intelligence data our mission is based on is accurate and timely. We plan, we train and we prepare to execute the mission flawlessly. We’re inserted into the area of operation and beginning our movement to the target when our team leader suddenly exclaims, “WAIT … there’s not supposed to be a river here.” When veterans come face-to-face with Murphy’s Law, they can adapt and overcome. They have contingency plans that allow them to think and react quickly. They didn’t get this ability from reading a book.
2. 360-degree awareness gets the team home safely. The ability to be completely aware in hostile and non-permissive environments saves lives in combat situations. There’s no room
and transferable skills; they have to reflect and promote the benefits of life experiences that will prove to be “mission critical” to prospective employers. Further, those benefits need to be communicated to prospective employers effectively. More importantly, it’s our responsibility as military veterans to educate Corporate America to this fact as well. Not sometime in the future, but now. My message to civilian employers and aspiring veteran job-seekers is rather straightforward. While you may not immediately see a direct correlation between military training and the job in question, be advised that those experiences have created a mindset that’s directly relevant to succeeding in any business environment. Consider the 5 following lessons that prove this fact to be true.
for “I should have seen that coming” when it comes to explosive devices or rifle barrels protruding from windows in buildings. Veterans with this experience have command over their business environment. They walk into offices and immediately scan the walls for informative plaques, and guide introductory conversations after noticing a lapel pin or a class ring on the hand they shook. They seal deals and get the team back successfully.
3. Wait for the best shot, not the perfect shot. In sniper school we’re trained to patiently wait for our shot, unaffected by our environment. When the target presents itself, we act: range it, dope it, scope it and pull the trigger. We’d like a perfect shot, but we know that if we hold the scope on target too long muscle fatigue sets in and our scope begins a figure-8 wobble. When that happens, we missed our opportunity.
Veterans in the civilian workforce hope for a perfect outcome, but they’re not afraid to execute when ready and make course corrections along the way if needed. They don’t suffer from “paralysis by analysis,” and they certainly don’t succumb to “deer in the headlights” syndrome. They’re doers and fivers.
4. Know when to advance, stand down and retreat. In our modern age of special operations warfare, small teams of highly specialized personnel with a high degree of autonomy are tasked with successfully executing tactical operations with the hope of having a strategic impact. We’ve been trained to exercise good judgment: we know when it’s right to execute, and we know there are times when the situation requires us to quietly stand down and retreat unnoticed. Veterans in the civilian workforce don’t let pride and ego override this reality. When a meeting is going badly they know how to gracefully end the conversation and exit with dignity. When contract negotiations stall, they have the judgment to know when to maneuver to a successful conclusion and when to stand down for
another opportunity. They didn’t obtain this critical life skill in a classroom.
5. Individuals are strong, but teams are powerful. Special Operations personnel are the most well-trained and highly lethal individuals on this planet. We also know that despite our strengths we have to sleep, and in a hostile environment that would be impossible were it not for the other members of the team remaining awake and alert. When we execute our missions, we’re as focused on the safety of the team members to our right and left as we are on the mission in front of us. As a cohesive team, the effectiveness of our combined individual skills increases exponentially. Veterans in the civilian workforce live by the mantra “first my mission, then my men, then myself” and know the powerful capabilities of a cohesive team. They derive satisfaction from their individual accomplishments but realize their potential increases exponentially as a unit. They despise selfabsorb, back-stabbing sycophants. If you’ve never heard the term “Blue Falcon,” I encourage you to look it up now.
In summary, if I handed you my resume you’d never see these skills listed … but they’re there. You may not believe Special Forces training is relevant to the sales job you advertised … but it is. The next time a military veteran applies for a position with your company, look beyond the resume and the rifle. What you’ll discover about our military veterans and their professional capabilities will pleasantly surprise you.
About the Author Michael Kaplan is the founder and CEO of Phase 2 Advantage, a consulting company that provides entrepreneurship and business management training for military and academic organizations. His most recent book, The Prior-Service Entrepreneur: Providing Military Veterans with the Competitive Skills to Start a Successful Business, has earned a 5-star rating on Amazon and is currently used as a course textbook in numerous business and entrepreneurship training programs throughout the United States.
Five Startup Lessons for Fast-Growing Companies By Kit Hickey
Within our first month of publicly launching Ministry of Supply in June 2012, we sold more than 6,000 shirts and gained 4,000 customers. Our company grew fast because it had to. We were an adolescent trapped in a baby’s body — we had to learn how to sprint before we could learn how to walk, and we had some serious growing pains as we tried to scale production from 300 to 6,000 shirts a month. However, we quickly realized that by empowering
our customers and empowering our company, we could truly grow the way we wanted. Everything we do comes down to empowering people to be their best. As a co-founder, I focus a lot on how we can scale our team, our operations and our distribution. We’re a startup, and face many of the same challenges that startups face. Here’s what we’ve learned along the way about managing fast growth.
Championship vs. Ownership There are six members of our team, and we all champion different areas of the business. For example, co-founder Gihan Amarasiriwardena focuses on product development and technology. Devin Cook, head of Customer Advocacy, spends all day thinking about how we can make customers as happy as possible. Over the months, we realized that we worked better as a team when we moved away from ownership and moved towards championship. This philosophy ensures nobody feels possessive about his or her area of focus, while encouraging teamwork and collaboration. So while Devin may be focused on customer happiness, we all chip in with ideas and often have company-wide brainstorms about improving the customer experience. As champions, we’re all really proud of the areas we focus on and are encouraged to get others behind our initiatives.
Holistic Views of the Business I love knowing what’s going on in all areas of the business, and we’ve found that everyone the team does too. We have an open office space and are constantly talking and bouncing ideas off of each other throughout the day. A few months ago, we realized that our communication wasn’t great despite the fact that we spent all day talking – some people didn’t know what was going on in various aspects of the business because decisions get made so quickly and a lot of decisions get made outside of the office. We’ve been trying to get better at making sure that everyone in the company knows what’s
going on and has a holistic view of the business. Being transparent and giving everyone the opportunity to know as much as they can enables everyone on a team to be their best.
Agile Problem-Solving We act fast whenever we see problems. When we realized that some of the shirts we were shipping were running too slim, we halted production, created a new pattern, trained our manufacturers, and got better-fitting shirts on the market in three weeks. Being able to adapt quickly and iterate in real-time is a huge benefit of a startup and we will forever try to retain that ability. In this example, by acting quickly to solve a problem, we were able to minimize exchanges — and more importantly, make our customers happy.
Technology Is in Our DNA As a fashion brand born out of MIT, we use technology to create the best products possible — from our use of thermal mapping
to optimize venting in our Aero pants design to the NASA phase-change performance materials we use in our Apollo shirts. We truly believe that technology can improve everyone’s lives and we democratize technology through apparel. As such, we don’t stop at the use of technology in product development; we leverage technology in every touch point of our brand.
Brand Is Culture At Ministry of Supply, we all live and breathe the mission. We are intentional
About the Article Kit Hickey is the co-founder of Ministry of Supply, a brand which is inventing the future of men's professional wear. The company has been featured in NYT, TechCrunch, Inc., Forbes and Elle Magazine. In addition, Kit is a lover of mountain sports and has half an MBA from MIT. Follow her: @kit_hickey
about hiring people who fit both our brand and our culture. When we take company retreats, we challenge ourselves to be our best. Our last one included hiking and winter camping in negative degrees. We want our customers to be their best and our employees to be their best. Everything we do comes down to that. Obviously a startup is a tremendous amount of work and nothing is certain. However, by staying true to our mission and empowering our customers and employees, we know that we’ll be here for the long haul.
Entrepreneurs: Here Are 7 Ways to Make the Most of Your Downtime By Ilya Pozin
“ Focus on slivers of time where you can cut back. For example, rather than scheduling a one hour meeting to chat with your team, cut out the fluff so it’s 30 minutes or less. ”
As an entrepreneur or startup founder, being stretched thin comes with the territory. Juggling a busy schedule may be second nature for you, but are you really using your time wisely? As the founder of two startups, I’ve grown so accustomed to being busy that I don’t think I function as well without a lot on my plate. But it’s taken years of practice for me to fine-tune my time management to ensure I’m not just getting things done but also maximizing every spare minute. This is especially important when it comes to your downtime–even if it’s just 15 minutes per day. Here are seven things to accomplish while making the best use of every spare minute you have:
1. Reprogram your schedule Using your brief moment of downtime to work on scheduling could save you a lot of time in the future. How much time are you allocating toward meetings, projects, or anything else you’re encountering on a daily basis? Focus on slivers of time where you can cut back. For example, rather than scheduling a one hour meeting to chat with your team, cut out the fluff so it’s 30 minutes or less.
2. Brainstorming Idea generation is crucial to every startup founder, but it
can be challenging to find time in your busy schedule. If you have 30 minutes of quiet time in the morning, brainstorm some ways to improve your business or just let your creativity flow for a while. Or, if your team is having a slow work day, invite them to the meeting room and divide them into teams for an impromptu brainstorming session. Give the team with the best new ideas a reward, like flex time or a day to work from home.
3. Strategizing Every minute counts when it comes to strategizing ways to grow your business. This could mean researching new ways to reach your customer base via marketing strategies or simply improving your website. To put your spare time strategizing to better use, consider bringing in your business partner or trusted employee to help you further your thinking.
4. Evaluate your team When was the last time you spent time evaluating the way your team functions? Go beyond considering their efficiency and whether they’re thoroughly engaged. Instead, hone in on their strengths and weaknesses and figure out ways for them to improve. You may even want to pull your employees aside for a one-on-one to individually to address any issues and gain feedback.
5. Rework internal processes Is your business running as smoothly as you think it is? Take time to figure out ways to improve your internal processes and boost company-wide efficiency. For example, you may find a software program that can automate menial tasks. Or maybe you’re struggling internally with the management and delegation of your teams. Consider restructuring your organization to remove hierarchy and function in a new manner.
6. Uninterrupted general focus Balancing a busy schedule often means struggling to find time to sit down and truly focus on something for a long period of time. Take advantage of every spare moment of down time to achieve uninterrupted focus on a pressing matter, even if it’s just organizing your inbox.
7. Catch up on reading Believe it or not, reading is a great way to make use of your time. Make time to read up on the latest industry news, check out what your competitors are doing, or even finish up that book that’s been gathering dust on your shelf. Feeding your mind also enhances your creativity and productivity overall. Use your spare moments of relief from a busy schedule as effectively as possible to help your business. How do you use your downtime?
About the Author Ilya Pozin is an entrepreneur, writer and investor. He is the founder of Open Me, a social greeting card company, and Ciplex, a digital marketing agency. He’s a columnist on entrepreneurship and marketing.
New Report
Entrepreneurship May Be Contagious Knowing an entrepreneur may be a big factor for becoming one. But more research might explain what can motivate more people to take the leap.
By Lewis Schiff
recent report from the Ewing Marion Kauffman Foundation explores whether or not instances of entrepreneurship would increase if more people had contact with more entrepreneurs. It strikes me that would be the case, based on what I discovered about social contagion while researching my book, Business Brilliant. You're probably already familiar with social contagion theory from the colloquialism, "follow the crowd." Social contagion explains why you would have trouble quitting smoking if many of your friends still smoke. It also explains why you're more likely to try harder at something when you are surrounded by others who are also trying hard; for example, when a team practices for a big game.
COULD ENTREPRENEURSHIP BE VIRAL? The Kauffman report considers the potential power of social contagion for entrepreneurship through a survey of 2,000 Americans. It asks the respondents how many of them know an entrepreneur. It further
investigates how many upwardly-mobile entrepreneurs (those with growing businesses) the respondents have contact with. In short, about a third of survey respondents have contact with an entrepreneur and about 15 percent have contact with upwardly-mobile entrepreneurs. The paper ponders if entrepreneurship is contagious--if exposure to entrepreneurs increases the likelihood an individual becomes an entrepreneur. If it were true, a prescription to increase new business creation would be relatively simple. But the paper does not establish a direct correlation between the two; it just shows "that a large number of U.S. residents know entrepreneurs, and that knowing an entrepreneur is possibly a significant factor in whether a person is also an entrepreneur."
WHERE MORE SOCIAL RESEARCH SHOULD BE DONE In my view, a different area of social research might explain why new
business creation calls for more than just mere exposure. The entrepreneurial journey almost always begins with a deep valley of hardship. Most new business owners have to forego corporate salaries when they start a new venture and herein lies the problem. Studies reliably show that most people are uncomfortable in situations that necessitate their being the least-affluent member of any group. One famous experiment, repeated many times, shows that most people say they would feel happier earning $33,000 in a workplace where everyone else makes $30,000 than if they were earning $35,000 in a workplace where everyone else makes $38,000. They would be happy to sacrifice $3,000 a year in a salary just to enjoy being top dog in a lower-paying workplace. For most people, the prospect of starting at the bottom--where nearly every entrepreneur begins his journey--is so undesirable that no amount of direct social contact with successful business owners will motivate them to take a similar leap.
ABOUT THE AUTHOR LEWIS SCHIFF is the executive director of the Inc. Business Owners Council. His latest book is Business Brilliant: Surprising Lessons from the Greatest Self-Made Business Icons. In November, he will co-lead the first-ever Inc. Riders Summit, a three-day motorcycle road trip for entrepreneurs through the Nevada desert. @lewisschiff
Change Happens to You and Because of You by Brian Solis Personally selected by Tabitha Jean Naylor. Written by Brian Solis I’ve come to learn that having opinions, insights, and standing for something is as taxing as it is rewarding. Like you, I am inspired by what surrounds me, by history and by the possibilities that open up as a result of my experiences. But, it is not easy. And, I suppose it’s not supposed to be.
vanity. These 5 V’s either pull me to learn, participate and teach or push me into a realm of either complacency or uncertainty, both of which result into creative stillness. These 5 V’s however coalesce and produce different results based on the measure we apply to our own actions, reactions and inactions.
I too feel challenged by what I should say versus what has already been said, yet also shaped by what should not be vocalized. I’ve come to learn however, that the relationship between self expression and inner monologue defines one’s character. It is what’s is said and what is not said that defines impressions and ultimately the perceptions of who we are and for what it is we stand or hope to achieve.
Impressions are linked to expressions and ultimately they are ours to define.
Satisfaction or dissatisfaction with oneself is trumped by our ability to learn and teach together.
“The impact of your work is the result of the balance you place on reacting to, learning from, and transcending teachers, critics and supporters.”
My personal and professional struggles are often tied to emotional rigors that spin me through cycles of vision, validation, vindication, vulnerability and
If you’re not provocative in some way, how can you possibly stand out to inspire someone else? This is a time for you to choose what it is you do with the inevitable reactions of encouragement, criticism, or resentment you will receive as you discover, share and grow. Take from each experience and move in a direction where you invest and receive value that inspires you and those around you. This is a time to be your own hero…to both inspire and be inspired.
Change happens to you and because of you. It is what perpetually happens next that defines your character and ultimately your legacy. This is your time.
About the Author Brian Solis is a digital analyst, anthropologist, and futurist and is globally recognized as one of the most prominent thought leaders in new media. He is also the author of the new book, What’s the Future of Business, changing the way businesses create experiences. Visit @briansolis and www.briansolis.com.
Fear - The Entrepreneur’s New Fuel By Tabitha Jean Naylor
F
ear...it’s something that entrepreneurs hear plenty about.
They tell you fear isn’t real, that it’s something that people create in their minds. That it shouldn’t effect you because you, yourself, made it up. But how often has this mindset actually helped you start a small business or jumpstart your entrepreneurship development?
Dealing with fear, realizing that it’s going to be a part of the journey, is the only way that you’re going to become a successful entrepreneur. You can scour the web and read every book imaginable on how to deal with your fears but until you realize that fear is going to be a part of the process you are going to struggle.
I’m going to take a wild guess and assume that it hasn’t. You’ve looked up and down the internet, read books, listened to speakers, heard all about other peoples’ entrepreneur success stories. The fear, however, still persists. It’s still there, slowly eating away at your morale.
It’s all about making a decision that your comfort zone is not a place that you want to be. Understanding that fear is going to be there every step of the way and falling in love with the feeling of your stomach tightening every time you make the decision to face those fears. That’s what is going to help you develop into the type of business entrepreneur you want to become.
The bottom line is that fear is real. It’s very real. If it wasn’t, you wouldn’t feel it.
People that work for other people are helping THOSE people achieve THEIR dreams. Whether
they are a sales executive making six figures or working in a cubicle for 50k a year, they are spending their time helping other people achieve their dreams. There is an old quote that says that 99% of people in the world can work for a company once it’s been created, but only 1% of the population can actually create those things or places that the 99% work at. Understand that you, already, are a part of that 1%. When you’ve made that decision to make the jump to starting a business, you’ve done something that only 1% of the population has the ability to do. So whatever you’re getting into right now - whether that be developing new business ideas, signing on with a new marketing partner or maybe still thinking about making the jump to opening a small business - realize that fear is going to be a part of the process. Realize that uncertainty, butterflies, and a tightened stomach are going to be with you every step of the way. But also realize that beautiful things will begin to happen when you start to accept that uncertainty and move forward anyhow. Realize that your potential lies right beyond that comfort zone. Entrepreneurship is a beautiful thing. It’s also an incredibly difficult thing. You’ve already made a decision that only 1% of the population has the ability to make. Now make the decision to put yourself at the top of that 1%. A wise person once said, ‘By leaving behind your old self & taking a leap of faith into the unknown, you find out what you are truly capable of becoming.’ Face your fears, step out of that comfort zone, use that fear to fuel you and don’t ever look back again.
Tips from the Startup Fundraising Playbook By Nathan Beckord I’ve been considering raising a seed round for my startup Foundersuite. So, to have recently been in the market for capital.
1. Mine AngelList and CrunchBase to Build a List of Investor Targets I’m a big fan of AngelList, and whenever I need to build a dataset of target investors, it’s the homepage, navigate to the “People” tab and use the “Role” header to select the relevant type of investor (seed, angel, VC, etc.). Next, “e-commerce,” “Digital Media” etc.). Pick out names of people you’ve heard good things about, or who clearly get the space, then add them to a spreadsheet or dedicated CRM product. approach comes from Dan Martell in an answer on his Clarity site. To paraphrase, he states, “Find other people [on CrunchBase] who have raised money and ask them who they got it a list of all similar companies that successfully raised money. Next, cold email the CEO/ Founder and ask to schedule a call with them for advice. Finally, as you develop a rapport with them, consider asking who their investors are and if they’d be willing to make an intro.
2. Aim for the Double Opt-In Intro Richard Goodrum, COO of RaceYourself. The best intros come from warm referrals, but instead of asking your referrer to simply make she or he would like to take it. For example, send a personalized email to your connector asking for an intro to Ben Horowitz, and instead of making your note to Ben, asking him if he’d like to take the opportunity.
Generally speaking, people dislike intros being “forced” on them; it creates awkward social pressure if they’re really not interested. Further, if they do say they’d like to take the intro, they’ve already said “yes” once and may be more predisposed to liking the deal. It’s a
3. Create Time Pressure Y Combinator alumni Shehzad Daredia, who recently closed a round for his startup bop.fm:
high-reward way to take that one step further is that the VC is probably not well-equipped to make a decision fast enough to meet your
a process to go through, so I understand if you playful challenge to one VC resulted in them $2 million – is that fast enough for you?’”
About the Author Nathan Beckord is co-founder and CEO of Foundersuite, a San Francisco-based developer of software tools for entrepreneurs, including an Investor CRM for managing the fundraising process.
TechCrunch.
5 Ways for Bootstrapped Startups to Get Through the First Year By Zach Cutler
In the eyes of an investor, a bootstrapped startup that has proven stable and successful within the first year is powerful. It not only raises confidence in the product and the leadership behind it, but also indicates that any invested money will likely not be thrown away. Ultimately, when it comes to working with investors, it’s important to prove that a startup and the people behind it not only know how to spend money, but know how to bring in additional money. To successfully bootstrap a company in its first year, it’s important to consider a few things:
1. Cut the nonessentials and focus on immediate needs. There is nothing more important to startup success than the talent that makes it all possible. Avoid any unnecessary expenses, such as office overhead or “frills,” to free up money to invest in better talent. Virtual offices will allow team members to work together from anywhere in the world and are extremely cost-effective. Ultimately, cutting costs wherever possible will more likely enable worthwhile investment in a larger team, which will be the catalyst to growth for the company.
2. Focus on two types of talent: engineering and marketing. An innovative and savvy engineer knows the ins and outs of mobile apps and understands what users truly want and need. An intelligent and driven marketing professional understands the market and how to reach the desired target audience. With these two power talents working side by side, any product has a good chance to be successful.
3. Don’t cut corners. Investors need to know the business and its leadership are stable and legit, so do everything by the book. Once they get involved, investors will want to see paperwork, as well as profits and losses and balance sheet reports right off the bat. This should be a priority from day one. Find an accountant and purchase good accounting software to ensure that records are clear and corners are not cut. This will also allow for extra time to tend to other important matters within the startup.
4. Cover the legalities before it’s too late. It’s critical to ensure the product or app is covered and that there are no loopholes that
would allow someone to steal its name or intellectual property once it takes off. During the planning phases, when speaking to potential investors, partners, or developers, it’s also wise to use a confidentiality agreement to ensure everything stays within the four walls. Additionally, copyright any sketches, mockups or documentation of the product during development stages.
5. Utilize freelance consultants. Skilled freelance consultants offer additional niche talent only when it’s needed. Build and keep a solid list of trusted and intelligent freelancers who can be utilized when the time is right. With the extra cash flow freelancers provide, startups have more ability to hire the best full-time staff needed for success. It’s no secret that the first year for a bootstrapped startup will have many highs and lows. Despite the uncertainty and exhilaration that comes with those highs and lows, it’s important to stay focused on what’s needed to get to the next step. Eventually, those steps will likely lead to talking with investors to get the startup to the next level. Cutting no corners from the very first day, bringing on the best talent and preparing for failure and success will prove to an investor that the product and those behind it have what it takes to succeed.
About the Author Zach Cutler is an entrepreneur and founder and CEO of Cutler, a tech PR agency in New York and Tel Aviv. An avid tech enthusiast and angel investor, Cutler specializes in crafting social and traditional PR campaigns to help tech startups thrive. He can be reached at zach@cutlergrp.com. * This article originally appeared on Entrepreneur.
How to Close a Sale: The Only Thing You Need to Knowng By Jill Konrath
Have you ever heard the phrase “detach from the outcome”? It’s a tenet of Eastern religions. For many years it was a concept that I found totally unfathomable. After all, sales itself is about outcomes. Our income is at risk. We need to get the business. But over the years, I’ve learned the wisdom of that message. In fact, the more I wanted to close a sale (or should I say – needed to close a sale) the less likely I was to get it. Why? Because my focus was on me, not my prospect. And, whenever you need something that much, you push too hard for it. You short-circuit the process and go for the close before the time is right and your prospect is ready. Do they feel it? You bet. They lean back, put obstacles in your path and don’t return your calls or respond to your emails. Then, you get desperate and your neediness shows – and you become even less desirable to do business with. All because you’re so eager to get the sale.
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Successful Startup 101 Magazine
I’ve learned that the only cure is to detach from the outcome. To be willing to say to yourself, “I know I need this sale, but I’m going to put that aside and focus on helping my prospect make a good decision.” Sometimes, you have to say it over and over to yourself. When you stop focusing on closing a sale, everything changes because your prospect’s needs become your driving force. And, paradoxically, that’s the best way to get what you want. Go figure. 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: www.jillkonrath.com/sales-resources * This post originally appeared on Jill Konrath’s website and is republished here with permission.
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10 Reasons Why Small Businesses Fail By Jared Mumford Running a small business is an exciting venture that can lead to the financial freedom simple employees work their whole lives to attain. However, with the great rewards come great risks that can lead us small business owners to financial failures. I have witnessed friends and family members pursue their own entrepreneurial dreams only to see them shattered not a year into their short-lived careers, mostly due to a number of fatal
but avoidable reasons. Let’s take a look at some of them.
1. No Business Plan Knowing what your business will be and how you will sell your products or services are not enough to keep it running. You need to have a business plan written out, including (but not limited to) the following: • your short and long term goals;
• the business’ finances for labor, production equipment, etc.;
You need to consider your target market and their habits, as well as the direct competition in the area. Don’t be afraid of spending on prime location, as the increased rate of customers coming into your store and making a purchase will make up for the initial cost.
• your target markets; and • marketing. Having one which outlines every detail will guide your business to the right path.
6. No Online Presence
2. Wrong Reasons Starting a small business simply because you want to be rich can lead to an unfulfilling experience, where you will always be looking for schemes that can bring you fortune. Before you do, think first about your own interests and passions. Do you believe you can give something of value to people at large? Are you driven enough to overcome the many inevitable obstacles an entrepreneur will face?
3. Inefficient Management Small business entrepreneurs usually come into their industries with little to no knowledge of handling the multiple facets of a business such as financial management, employee relations, advertising and other essential responsibilities. Educate yourself through short business and finance courses, or hire managers who have expertise in the fields where you are lacking.
4. Lack of Capital Some entrepreneurs think they will be making profits for their beginning operation cycles, spending most (if not
all) of their resources immediately, only to find out later that they will not have enough funds to start the succeeding cycle/s. Consider every possible cost (overhead, production, equipment, etc.) and save enough money that can be used for at least one fiscal year despite poor sales.
5. Bad Location It is not enough to set up a store at a location with high human traffic or with a very cheap lease. Opening a restaurant near a school campus can seem like a good idea, but don’t expect too many customers if the food is expensive and there are much cheaper alternatives around.
In this age of high-speed information, people expect to find just about everything on the Internet with their computers and mobile devices. Not having a website or at least a social media page will render your business virtually invisible to a great majority of the world’s population. You can hire professionals to create a website for you or put up the website yourself. Make accounts for your business on Facebook, Twitter and other leading social media platforms where your target market can usually be found.
7. Uncontrolled Growth Growth is a good thing unless it is left unchecked and your
generated revenue can’t keep up with the expansion. If your business experiences great success, do not be overeager to spend your profits by immediately buying more equipment or opening up new stores. Stick to the strategies you have set so you can still grow without bankrupting the business.
8. Financial Neglect Cash is the lifeblood of any business, and there will be no business once that runs out. Therefore, it is imperative that small business entrepreneurs practice strict financial record-keeping so that every penny is duly accounted for. Knowing exactly how much money is going in and out of your business will
correctly guide every decision you make.
9. Lackluster Execution Having a great business plan will amount to nothing if each objective is tackled with incompetence. Employees who are lazy, dull, bad-mannered and unmanageable will not just cut down on productivity, but will also have a negative effect on the work environment and customer/client relations. Follow strict hiring guidelines and subject your hires to rigorous training to ensure quality output from each one.
10. Poor Marketing A small business needs to market its brand considering the tough
competition it will face against more established businesses. You need to invest enough resources into promoting your products through the right channels. This is so your target market knows exactly that you can fulfill its needs. Online marketing is a must these days, but you should not ignore the physical reach of traditional marketing methods such as brochures, flyers and business cards. Ultimately, it is a matter of planning out your overall strategy, assessing your own strengths and weakness, and keeping a good eye on all of your resources—be it financial or human. Consider each of these possible pitfalls, and you can find your small business not just surviving, but thriving in this competitive world.
About the Author Jared Mumford is the owner of SEO Visions, a digital marketing agency, and a partner at All Inclusive Marketing. He lives tucked away on Canada's west coast with his wife and two sons..
6 Ideas For Starting A Business By Mary Ellen Biery
unemployment rate that remains around 7.6 percent also means that many Americans have been unable to find a full-time job with an employer, so they may be looking for ways to earn a living on their own. Indeed, nearly half of Americans dream of starting a business, according to a recent survey by The UPS Store. And while the number of “business births” and their associated employment remain below pre-recession levels, small businesses have been at the core of the economic expansion, according to the U.S. Small Business Administration. Small businesses, which the SBA defines as fewer than 50 employees, represent more than 99 percent of all businesses and about half of the private-sector economy.
Is there anything more American than starting your own business? With huge success stories like Bill Gates, Sam Walton and Mark Cuban, Americans see what a good idea and working hard can accomplish, and many regularly hear that independent streak calling them. A U.S.
Sageworks, a financial information company, recently researched which service-based businesses could be good options for people looking to start their own companies. Through its cooperative data model, Sageworks collects the financial statements of private companies from accounting firms, banks and credit unions, aggregating the data at an approximate rate of 1,000 statements a day and generating benchmark performance statistics.
Service-based businesses are good to consider because they typically require little to no capital to start, and a person can walk out the door and start making money with hard work. Among U.S. service industries with the highest sales growth in the 12 months ended May 31, Sageworks found several types of businesses that could be started by one person. Each of these industries has also generated solid profit margins relative to all other industries, based on Sageworks’ data. “Private companies, on average, are growing at a healthy rate and have improved margins relative to last year,” said Sageworks analyst Libby Bierman. “But they continue to hold off on hiring. If a job seeker is frustrated, these services industries could be a good place to focus energy. They have lower entry costs than most sectors – need little-to-no inventory investment, can operate out of your house or a small rental location, and don’t require heavy equipment.” One major industry posting healthy sales growth that lends itself to entrepreneurism is management, scientific or technical consulting services (NAICS code 5416). This includes an array of consultants, such as those focused on management,
marketing, energy efficiency, safety and human resources. Building and landscape architects and computer systems design are also industries growing strongly, by about 15 percent over the last 12 months. And there are many business ideas within other categories such as personal services (NAICS 8129) and other professional, scientific or technical services (NAICS 5419). For example, startup businesses could focus
on photography, translation services, pet care, personal fitness training or something as simple as a balloon-o-gram service. There are many unusual jobs that pay surprisingly well. For more information on the types of jobs listed in this chart and their markets, visit the Census Bureau’s industry classification system page, where you can type in the NAICS code to learn more about the industry. Or browse
the Bureau of Labor Statistics’ Occupational Outlook Handbook. Granted, many of the jobs in the industries with healthy growth rates and margins require certifications, schooling or experience in the field, Bierman said. “But if someone meets those qualifications, their strong growth rates indicate there might be room for more players in these industries,” she added.
6 INDUSTRIES FOR STARTUP-UP IDEAS Industry
Job Ideas
Sales Growth (last 12 months)
Consulting (NAICS 5416):
Marketing consulting, HR consulting, management consulting, energy consulting services, safety consulting services, environmental consulting
15.1
Architectural/engineering (NAICS 5413):
Building and landscape architects, traffic engineering, heating design
14.9
Computer services (NAICS 5415):
Writing/testing/supporting software, hardware/software/communications design, computer disaster recovery services, software installation services
14.9
Advertising, public relations (NAICS 5418):
Advertising, public relations consulting, lobbying, flyer distribution, merchandise-demonstration services
13.1
Other personal services (NAICS 8129):
Pet care, parking lots, balloon-o-gram services, house sitting services, personal fitness trainer, personal shopping services, wedding planning
12.9
Other professional/technical services (NAICS 5419):
Photography, translation services, appraisal services, credit repair services
10.2 Source:
Sageworks, a financial information company, collects and analyzes data on the performance of privately held companies and provides financial forecasting software.
Why You Should Never Give Up On Your Dreams By Adriana Langford
A
utumn is the season where we reap the benefits of the seeds that we planted in the spring according to the great philosopher Jim Rohn. I wanted to touch base with the entrepreneurial community on why you should never, ever, give up on your dreams. Last Labor day as many of us celebrated American workers with family and friends or looked upon the upcoming new season with regret or disappointment for the things we want to achieve or feel that we should have already achieved, Diana Nyad, a 64 year old endurance swimmer became the first swimmer to cross the 110 mile journey from Cuba to Key west without the protection of a shark cage. This was Ms. Nyad’s fifth attempt to reach her goal in 35 years and she finally made it. After Ms. Nyad completed her journey, she gave us three simple but powerful messages that I want to share with you to show you how this applies to us as individuals as well as entrepreneurs, myself included. Diana’s three messages were:
1
We should never, ever give up
Think of all the situations that you have been through, how bad you fought for the dream you wanted the most, and most importantly for those of you that are still struggling to reach their destination this is not the time to quit. Ms. Nyad tried this five times and each time before there was an obstacle in her way. Storms, stinging jellyfish, and terrifying sharks. I can’t think of one person in my life that would do what she did, can you? You could be that person.
2
You are never too old to chase your dreams
Whether you’re 35 or 53 chances are deep down inside there is something burning you on the inside. Maybe this goal is something you dreamed of doing twenty years ago . It could be the dream of working for yourself or the dream of finally getting that MBA title that you may not even need but want to have it make you feel complete. Ms. Nyad showed us all that it’s really never too late. All you need is perseverance and determination to succeed.
3
It looks like a solitary sport, but it takes a team
This lesson was actually my favorite. I confess! It’s my favorite because I’m running a company, as are many of you,
and we both know that doing it ourselves is just a crock of you know what. If it weren’t for my team I honestly don’t know how I would do it. A wellbalanced team makes all the difference. If you are running your business alone this really applies to you. Think about all of the things you would be able to achieve if you developed your A team. After so many attempts Ms. Nyad knew what she had to do and whom she had to consult to make this journey a success. On one occasion she had a severe asthma attack that stopped her journey, which prompted her to call a pulmonologist. After being severely stung by a swarm of jellyfish, she called in a jellyfish expert. Sharks are usually an absolute menace so she called in shark divers. After each lesson she learned exactly whom she needed to succeed and you must do the same. We are living in an age where anything is possible, including the outrageous dreams you have in your head. So today as we reflect on Diana Nyad’s successful journey, I want you to continue telling yourself, IT’S POSSIBLE!
About the Author Adriana Langford is The Chic Entrepreneur Coach. Founder and executive editor at www.shelovesmarketing.com and creator of the Marketing makeover toolbox. Adriana teaches women entrepreneurs how to makeover their marketing to attract their ideal clients to live their ideal lifestyles.
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