Bill Gates says, “When I started Microsoft, I was so excited that I didn’t think of it as being all that risky. It’s true, I might have gone bankrupt, but I had a set of skills that were highly employable. And my parents were still willing to let me go back to Harvard and finish my education if I wanted to .... If you’re going to start a company, it takes so much energy that you’d better overcome your feeling of risk.“ Entrepreneurs have the innate ability to compartmentalize their fears and doubts. They believe in what they’re doing with a passion that overcomes doubt. They’re resilient, tenacious and have the guts to overcome some white-knuckle adventures, such as replenishing a bank account the day before the payroll is due. They’re very resourceful and operate mostly on instinct. They’re always rolling the dice. They have a powerful need to provide for their families and they have an overpowering urge to do it their way. If they’re too intent on the dream to recognize the risks, they often lack the experience and the resources to protect themselves. So, they take action, make the mistakes, pay the price and if they’re lucky enough to survive, a successful business emerges. Although much has been written about how the “entrepreneurial personality” is characterized by “a propensity for risk-taking,” successful entrepreneurs spend considerable time trying to define the risks they have to take and trying to minimize them.
Leaders, by definition, set standards and attempt things that “can’t be done.” So, in a startup, the CEO’s job is figuring out what the company stands for, pushing the company to understand what it’s really good at, and building mechanisms (preferably something dramatic) that will force people to pay attention, such as Granite Rock’s altered invoice that says, “If you’re not satisfied with something, don’t pay us for it. Simply scratch out the related line item ... and send your check for the remaining balance.”
An entrepreneurial leader focuses on three employee-management fundamentals to start building an innovative organization. The first step is to formally integrate innovation into the strategic-management agenda of senior executives. In this way, innovation is not only encouraged but it's also managed, tracked, and measured as a key element of the company’s growth. Second, executives make better use of existing (and often untapped) talent for innovation, without implementing disruptive new programs, by creating conditions that allow dynamic innovation networks to emerge and flourish. Finally, management fosters an innovative culture by developing and enhancing trust among employees. In this kind of culture, people understand that their ideas are valued, that it’s safe to express these ideas, and that everyone collectively shares the risks inherent in introducing and implementing new ideas. This environment will be more effective than just using monetary incentives to sustain innovation.
Tuesday, January 6, 2009
Monday, January 5, 2009
Startup advice from Sharon Ballard.
Sharon Ballard is the CEO of Enable Ventures Inc. and the former CEO and cofounder of Reticular Systems. She’s been a management fellow for UCSD’s CONNECT program where she advised over 60 early stage high technology companies. She served as entrepreneurial management consultant to the San Diego Technology Incubator, mentoring their high technology clients, and served several fellowships with Hunter Centre for Entrepreneurship at the University of Strathclyde, Glasgow, and the Center for Enterprise Management at the University of Dundee, Scotland. She’s been a frequent judge for San Diego State University Entrepreneurial Management Center's Annual Student Business Plan Competition. For Arizona State University, she’s assisted university spinouts with their federal proposals for research grants and contracts. She’s one of two principals of Tech Continuum Ventures, LLC, under contract to deliver education, coaching and connecting events for ASU's Technopolis Program.
Sharon cautions to watch out for the following in a new startup:
1. Product development delays.
When products run late, this can have serious implications for cash flow. Try to keep development cycles on track and on time.
2. People problems.
People are the core of most businesses and the single largest expense. Hiring great employees takes time, hard work and some good luck. Every business makes hiring mistakes, but one key to success is fixing the mistakes quickly. If your company has problems with poor individual performance, lack of teamwork, or high turnover, deal with it immediately. Don't wait until personnel issues threaten to destroy your business.
3. Sales below projections.
Revenue projections are often overly optimistic. Be realistic. Sales usually ramp up more slowly than expected. Factor this into your thinking because it affects cash flow and can cause serious operating problems.
4. New competitors.
There’s a lot of money chasing a few good ideas. If your idea works, expect investors to form new companies that will compete with you. Stay focused, and continually think about what your company can do to stay ahead of your competition.
5. Investor agendas.
A constant consideration for any startup is asking, “What am I doing and how is that going to be perceived by the investment community?” as well as, “Does it make sense and will it build value for my present investors?” An entrepreneurial CEO is constantly thinking about both.
6. Feel the fear, but do it anyway.
If you’ve been honest and have done your very best to make your venture successful, there’s no shame in failure and also no reason not to try again.
Sharon cautions to watch out for the following in a new startup:
1. Product development delays.
When products run late, this can have serious implications for cash flow. Try to keep development cycles on track and on time.
2. People problems.
People are the core of most businesses and the single largest expense. Hiring great employees takes time, hard work and some good luck. Every business makes hiring mistakes, but one key to success is fixing the mistakes quickly. If your company has problems with poor individual performance, lack of teamwork, or high turnover, deal with it immediately. Don't wait until personnel issues threaten to destroy your business.
3. Sales below projections.
Revenue projections are often overly optimistic. Be realistic. Sales usually ramp up more slowly than expected. Factor this into your thinking because it affects cash flow and can cause serious operating problems.
4. New competitors.
There’s a lot of money chasing a few good ideas. If your idea works, expect investors to form new companies that will compete with you. Stay focused, and continually think about what your company can do to stay ahead of your competition.
5. Investor agendas.
A constant consideration for any startup is asking, “What am I doing and how is that going to be perceived by the investment community?” as well as, “Does it make sense and will it build value for my present investors?” An entrepreneurial CEO is constantly thinking about both.
6. Feel the fear, but do it anyway.
If you’ve been honest and have done your very best to make your venture successful, there’s no shame in failure and also no reason not to try again.
Thursday, January 1, 2009
Thoughts on Capital Punishment, a poem by Rod McKeun.
Born in Oakland, California, in 1933, McKuen ran away from home at the age of eleven to escape an alcoholic stepfather and to send what money he could to his mother. After a series of jobs, from lumberjack, ranch hand, railroad worker to rodeo cowboy, McKuen began in the 1950s to excite audiences with his poetry readings, appearing with such well-known poets as Jack Kerouac and Allen Ginsberg. McKuen's commercial success is unparalleled in the field of modern poetry. He also achieved considerable success as a songwriter, soundtrack composer, and singer. As a songwriter, he has contributed to the sale of over 100 million records. In addition, his humanitarian efforts have twice won him the prestigious Freedoms Foundation Award. McKuen retired from live performances in 1981. What a guy!
Thoughts on Capital Punishment by Rod McKuen
There ought to be capital punishment for cars
that run over rabbits and drive into dogs
and commit the unspeakable, unpardonable crime
of killing a kitty cat still in his prime.
Purgatory, at the very least
should await the driver
driving over a beast.
Those hurrying headlights coming out of the dark
that scatter the scampering squirrels in the park
should await the best jury that one might compose
of fatherless chipmunks and husbandless does.
And then found guilty, after too fair a trial
should be caged in a cage with a hyena’s smile
or maybe an elephant with an elephant gun
should shoot out his eyes when the verdict is done.
There ought to be something, something that’s fair
to avenge Mrs. Badger as she waits in her lair
for her husband who lies with his guts spilling out
cause he didn’t know what automobiles are about.
Hell on the highway, at the very least
should await the driver
driving over a beast.
Who kills a man kills a bit of himself
But a cat too is an extension of God.
Thoughts on Capital Punishment by Rod McKuen
There ought to be capital punishment for cars
that run over rabbits and drive into dogs
and commit the unspeakable, unpardonable crime
of killing a kitty cat still in his prime.
Purgatory, at the very least
should await the driver
driving over a beast.
Those hurrying headlights coming out of the dark
that scatter the scampering squirrels in the park
should await the best jury that one might compose
of fatherless chipmunks and husbandless does.
And then found guilty, after too fair a trial
should be caged in a cage with a hyena’s smile
or maybe an elephant with an elephant gun
should shoot out his eyes when the verdict is done.
There ought to be something, something that’s fair
to avenge Mrs. Badger as she waits in her lair
for her husband who lies with his guts spilling out
cause he didn’t know what automobiles are about.
Hell on the highway, at the very least
should await the driver
driving over a beast.
Who kills a man kills a bit of himself
But a cat too is an extension of God.
Wednesday, December 31, 2008
Getting support for a start up.
A startup veteran notes: "For the first few years, we were totally in a survival mode. We were very, very lean in terms of money and time. We didn't begin with clearly defined aspirations that in four years we'd achieve X and Y. It was more like, 'Let's do something and see what happens.' We went to the try-a-lot-of-stuff-and-see-what-works school. We had a business plan at the beginning but only because we needed one to get a line of credit. We didn't know much about running a business. We figured to learn what we needed as we went along. We went where the market took us.”
As Abraham Lincoln noted, “Things may come to those who wait, but only the things left by those who hustle.” Start-ups and turnarounds are very similar. You don't have much cash or much time. You have to make good decisions and make things happen quickly. Be prepared to skate fast over thin ice. Be prepared to move forward without the right answers. Concentrate on areas where you’re in control. Don’t worry about things that aren’t in your control. Work to develop an instinctive understanding of your target customers. Everyone in your organization needs to develop a proprietary, emotional relationship with the customer, continually striving to understand and respond to their needs.
To nurture start-ups toward maturity quickly, it helps if they belong to a group of interdependent yet nominally independent companies, all built around a core base of knowledge. Idealab strives to help its member companies, not by showering them with cash, but by leveraging shared creative and technical know-how. "We really don't think of ourselves as venture capital," says founder Bill Gross. "We're creative capital. The money we bring is incidental."
Idealab is a business incubator. Like a traditional VC firm, it provides seed money and takes a minority equity stake in the companies it adopts. Like a think tank, it brainstorms technology applications that could form the basis for new products. And like a parent company, it takes a substantial role in overseeing the operations of its subsidiaries. In a fast moving market, one or two months can be the difference between success or failure. The shared knowledge at Idealab enables a start-up to avoid many mistakes so that it can do in four-and-a-half months what would take another start-up nine months to do. Much of the time saved stems from the fact that Idealab companies don't have to build everything from scratch. Since they share office space and administrative services, startup teams are free to just concentrate on those factors that are uniquely related to their businesses.
Idealab is trying to harness both the power of a big company and the nimbleness of a small one. It aims to add value through shared knowledge and creativity and in that way build better companies. The CEOs of the individual businesses have complete freedom to shape their companies while determining which of Idealab’s suggestions seem most relevant and possible to their situations. Idealab uses its experience to systematize the generation of new business ideas. Among its learnings:
- You need to be incredibly highly focused to succeed.
- Even if you have a wonderful product, if you can't clearly communicate to the customers where the product's benefit is, it's not going to do you any good.
Venture Catalysts such as Artemis Ventures and Guy Kawasaki’s Garage Technology Ventures act as hybrid VC, headhunting and management consulting firms, helping startups in every way imaginable. Incubators can help by removing the need to pay attention to routine issues. "The first few months of a start-up are analogous to the first few nanoseconds in the birth of a star," says Steve Glenn, the founder of PeopleLink, which raised $35 million from GE, AT&T and Goldman Sachs and became a leading provider of online community software. "Whatever happens during that short period will determine your permanent trajectory. So if you're freed up from the administrative stuff, you can focus on aiming that trajectory as high as possible."
As Abraham Lincoln noted, “Things may come to those who wait, but only the things left by those who hustle.” Start-ups and turnarounds are very similar. You don't have much cash or much time. You have to make good decisions and make things happen quickly. Be prepared to skate fast over thin ice. Be prepared to move forward without the right answers. Concentrate on areas where you’re in control. Don’t worry about things that aren’t in your control. Work to develop an instinctive understanding of your target customers. Everyone in your organization needs to develop a proprietary, emotional relationship with the customer, continually striving to understand and respond to their needs.
To nurture start-ups toward maturity quickly, it helps if they belong to a group of interdependent yet nominally independent companies, all built around a core base of knowledge. Idealab strives to help its member companies, not by showering them with cash, but by leveraging shared creative and technical know-how. "We really don't think of ourselves as venture capital," says founder Bill Gross. "We're creative capital. The money we bring is incidental."
Idealab is a business incubator. Like a traditional VC firm, it provides seed money and takes a minority equity stake in the companies it adopts. Like a think tank, it brainstorms technology applications that could form the basis for new products. And like a parent company, it takes a substantial role in overseeing the operations of its subsidiaries. In a fast moving market, one or two months can be the difference between success or failure. The shared knowledge at Idealab enables a start-up to avoid many mistakes so that it can do in four-and-a-half months what would take another start-up nine months to do. Much of the time saved stems from the fact that Idealab companies don't have to build everything from scratch. Since they share office space and administrative services, startup teams are free to just concentrate on those factors that are uniquely related to their businesses.
Idealab is trying to harness both the power of a big company and the nimbleness of a small one. It aims to add value through shared knowledge and creativity and in that way build better companies. The CEOs of the individual businesses have complete freedom to shape their companies while determining which of Idealab’s suggestions seem most relevant and possible to their situations. Idealab uses its experience to systematize the generation of new business ideas. Among its learnings:
- You need to be incredibly highly focused to succeed.
- Even if you have a wonderful product, if you can't clearly communicate to the customers where the product's benefit is, it's not going to do you any good.
Venture Catalysts such as Artemis Ventures and Guy Kawasaki’s Garage Technology Ventures act as hybrid VC, headhunting and management consulting firms, helping startups in every way imaginable. Incubators can help by removing the need to pay attention to routine issues. "The first few months of a start-up are analogous to the first few nanoseconds in the birth of a star," says Steve Glenn, the founder of PeopleLink, which raised $35 million from GE, AT&T and Goldman Sachs and became a leading provider of online community software. "Whatever happens during that short period will determine your permanent trajectory. So if you're freed up from the administrative stuff, you can focus on aiming that trajectory as high as possible."
Tuesday, December 30, 2008
How to attract and keep customers.
Entrepreneurs survive by being enthusiastic about their ventures and by being committed to unceasing promotion of their their concepts. It seems unnatural for such people to equate "being silent" with actively promoting their venture. Yet, they’re not selling when they’re talking; rather, they’re selling when their targeted prospect is talking. Provide interesting information to your prospects and then listen to what they say. Let them "teach" you exactly what the hot-buttons are that can lead you to sales success. No one understands the targeted customer’s needs as intimately as the prospective customer does. If you listen closely enough, your customers will explain your business to you.
Selling is helping people make business decisions that are good for them. It’s finding a need and filling it. Learn how to offer solutions beyond price - because you know your customer’s business as well or better than they do. List the features of your product or service but sell the benefits.
Once you get a customer, keep selling to them. Customers are so difficult and so expensive to get, you don’t ever want to lose them. Sell them upgrades, maintenance, new products, new services. Aim to create a recurring revenue model. Continually refresh your memory of the reasons the customer did business with you in the first place.
The four main reasons why people buy are - Pride, Pleasure, Profit and Protection. What matters in sales is Continuity, Commitment and Content, and the last is the least important. All things being equal, the person with the best sales presence will get the order. To quote Aristotle, “People are convinced more by the depth of your conviction than by all the facts at your disposal.”
When you're selling, the ten most important "power words" that get the customer’s attention are:
- money
- save
- you
- new
- free
- proven
- guaranteed
- results
- health
- love
These words were identified by researchers in the Psychology Department at Yale University as having extraordinary persuasive power and are listed here in order of importance. Use these words early in your sales presentation and I guarantee that you'll get your client's attention.
Selling is helping people make business decisions that are good for them. It’s finding a need and filling it. Learn how to offer solutions beyond price - because you know your customer’s business as well or better than they do. List the features of your product or service but sell the benefits.
Once you get a customer, keep selling to them. Customers are so difficult and so expensive to get, you don’t ever want to lose them. Sell them upgrades, maintenance, new products, new services. Aim to create a recurring revenue model. Continually refresh your memory of the reasons the customer did business with you in the first place.
The four main reasons why people buy are - Pride, Pleasure, Profit and Protection. What matters in sales is Continuity, Commitment and Content, and the last is the least important. All things being equal, the person with the best sales presence will get the order. To quote Aristotle, “People are convinced more by the depth of your conviction than by all the facts at your disposal.”
When you're selling, the ten most important "power words" that get the customer’s attention are:
- money
- save
- you
- new
- free
- proven
- guaranteed
- results
- health
- love
These words were identified by researchers in the Psychology Department at Yale University as having extraordinary persuasive power and are listed here in order of importance. Use these words early in your sales presentation and I guarantee that you'll get your client's attention.
Monday, December 29, 2008
Ten ways to attract new business.
1. Be a walking example/demonstration of how effective your product or service is. Being congruent (when people sense that you believe and live what you speak about) is the number one way to establish credibility.
2. Do your homework and discover what your "typical" customer's biggest problem is. Pretend it's your own problem. Now solve the problem. Take the solution to the customer, packaged around your own product/service. If you’re a solution provider, the barrier to entry is harder for a competitor than if you’re a product provider.
3. Polish your product knowledge and presentation techniques until they’re razor sharp. Your stories, examples, jokes, facts, comparisons and closes are your "tools of the trade." Spend a minimum of four hours a week polishing your tools.
4. Make a notebook of your best stories, best examples, most effective closes, funniest relevant jokes and the rebuttals to the biggest objections you face. Have the rest of the sales team do the same. Compare notes, then compile a "best of the best" file of the best stories, examples, closes, etc. Continually expand and add to your notebook each month.
5. Improve your communication skills so that people want to be around you. Learn rapport skills through Neuro Linguistic Programming (NLP) training, for example. Learn to identify different personality types and communications styles and know how to respond to each. Hone your listening and questioning skills. Polish your speaking and languaging skills until your presentations are very effective.
6. Add value to your current customers by making sure they're maximizing the use of the product/service. Show the customer how they’re saving money by using your product. Be willing to take as much time as necessary to educate and support them, especially after the sale.
7. Turn your customers into your company's R&D department. Get lots of feedback from them. Be so "in tune" with their needs and desires that you can anticipate what your customers will want even before they ask.
8. Ask your best customers for a letter of recommendation or a testimonial letter (on their letterhead). Three or four sincere testimonials can raise your average close ratio by 30-50%. An easy method is to interview your best customers over the phone, take notes (quotes), then email the notes to them. They can easily edit and print them out on their own letterhead, and mail the letter to you. Show the letters to all new prospects - this is more effective than the slickest brochure!
9. Strengthen your personal foundation/reserve levels so that you act like you don't need the money anymore. Then your motivation is based more on creating value, solving the customer's problems and genuinely helping them get what they want or need. This is a much more attractive sell.
10. Master the following six-step selling process until it’s second nature:
- Establish rapport.
- Ask questions to understand the customer and to find their real need.
- Based on the need, determine exactly where the real value is for the customer.
- Link their need to the value provided by your product/service using concise, persuasive communication (don't over-present).
- Assume the sale and conditionally close. If there’s a green light, then close the sale officially.
- If there are any objections, handle them by cycling back to previous steps (find the real need, link it to your product, etc).
2. Do your homework and discover what your "typical" customer's biggest problem is. Pretend it's your own problem. Now solve the problem. Take the solution to the customer, packaged around your own product/service. If you’re a solution provider, the barrier to entry is harder for a competitor than if you’re a product provider.
3. Polish your product knowledge and presentation techniques until they’re razor sharp. Your stories, examples, jokes, facts, comparisons and closes are your "tools of the trade." Spend a minimum of four hours a week polishing your tools.
4. Make a notebook of your best stories, best examples, most effective closes, funniest relevant jokes and the rebuttals to the biggest objections you face. Have the rest of the sales team do the same. Compare notes, then compile a "best of the best" file of the best stories, examples, closes, etc. Continually expand and add to your notebook each month.
5. Improve your communication skills so that people want to be around you. Learn rapport skills through Neuro Linguistic Programming (NLP) training, for example. Learn to identify different personality types and communications styles and know how to respond to each. Hone your listening and questioning skills. Polish your speaking and languaging skills until your presentations are very effective.
6. Add value to your current customers by making sure they're maximizing the use of the product/service. Show the customer how they’re saving money by using your product. Be willing to take as much time as necessary to educate and support them, especially after the sale.
7. Turn your customers into your company's R&D department. Get lots of feedback from them. Be so "in tune" with their needs and desires that you can anticipate what your customers will want even before they ask.
8. Ask your best customers for a letter of recommendation or a testimonial letter (on their letterhead). Three or four sincere testimonials can raise your average close ratio by 30-50%. An easy method is to interview your best customers over the phone, take notes (quotes), then email the notes to them. They can easily edit and print them out on their own letterhead, and mail the letter to you. Show the letters to all new prospects - this is more effective than the slickest brochure!
9. Strengthen your personal foundation/reserve levels so that you act like you don't need the money anymore. Then your motivation is based more on creating value, solving the customer's problems and genuinely helping them get what they want or need. This is a much more attractive sell.
10. Master the following six-step selling process until it’s second nature:
- Establish rapport.
- Ask questions to understand the customer and to find their real need.
- Based on the need, determine exactly where the real value is for the customer.
- Link their need to the value provided by your product/service using concise, persuasive communication (don't over-present).
- Assume the sale and conditionally close. If there’s a green light, then close the sale officially.
- If there are any objections, handle them by cycling back to previous steps (find the real need, link it to your product, etc).
Friday, December 19, 2008
The Hung Wu Vase, a poem by Robert Graves.
Robert Graves (July 1895 – December 1985) was an English poet, translator and novelist. He was educated at Charterhouse School and St. John's College, Oxford. He was awarded the James Tait Black Memorial Prize for both of his novels, I, Claudius and Claudius the God.
Graves fathered eight children with a variety of partners and had a fairly turbulent love life, as the following poem illustrates. Of course, love wasn't the only intensely-felt experience in his long life, but it was the one which helped him to make poetic sense of the rest. He once commented that, "Poetry cannot be separated from the state of being in love." He and his last love, Beryl Hodge, are buried in the small churchyard on the hill in Deia, on the northwest coast of Majorca, looking out over the sea.
The Hung Wu Vase by Robert Graves.
With women like Marie no holds are barred.
How do they get the gall? How can they do it?
She stormed out, slamming the hall door so hard
That a vase on a gilt shelf above - you knew it,
Loot from the Summer Palace at Pekin
And worth the entire contents of my flat -
Toppled and fell ...
I poured myself a straight gin,
Downing it at a gulp. 'So that was that!'
The bell once more ... Marie walked calmly in,
Observed broken red porcelain on the mat,
Looked up, looked down again with condescension,
Then, gliding past me to retrieve a glove
(Her poor excuse for this improper call),
Muttered: 'And one thing I forgot to mention:
Your Hung Wu vase was a phony, like your love!'
How can they do it? Where do they get the gall?
I'll be off next week, and back on December 29th.
My Christmas wish for all of you is:
May you always be blessed
With walls for the wind,
A roof for the rain,
A warm cup of tea by the fire
Laughter to cheer you,
Those you love near you,
And all that your heart might desire.
Graves fathered eight children with a variety of partners and had a fairly turbulent love life, as the following poem illustrates. Of course, love wasn't the only intensely-felt experience in his long life, but it was the one which helped him to make poetic sense of the rest. He once commented that, "Poetry cannot be separated from the state of being in love." He and his last love, Beryl Hodge, are buried in the small churchyard on the hill in Deia, on the northwest coast of Majorca, looking out over the sea.
The Hung Wu Vase by Robert Graves.
With women like Marie no holds are barred.
How do they get the gall? How can they do it?
She stormed out, slamming the hall door so hard
That a vase on a gilt shelf above - you knew it,
Loot from the Summer Palace at Pekin
And worth the entire contents of my flat -
Toppled and fell ...
I poured myself a straight gin,
Downing it at a gulp. 'So that was that!'
The bell once more ... Marie walked calmly in,
Observed broken red porcelain on the mat,
Looked up, looked down again with condescension,
Then, gliding past me to retrieve a glove
(Her poor excuse for this improper call),
Muttered: 'And one thing I forgot to mention:
Your Hung Wu vase was a phony, like your love!'
How can they do it? Where do they get the gall?
I'll be off next week, and back on December 29th.
My Christmas wish for all of you is:
May you always be blessed
With walls for the wind,
A roof for the rain,
A warm cup of tea by the fire
Laughter to cheer you,
Those you love near you,
And all that your heart might desire.
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