Small Business News
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Alexa von Tobel, founder and CEO of LearnVest, explains how to go about choosing the right investors.
For a start-up oasis to rise up in the middle of the desert, Las Vegas is going to need talent--and lots of it.
Robert Nielsen likes to say that the University of Nevada Las Vegas campus is situated at the center of the city's tech start-up scene.
Geographically speaking, Nielsen, who's the director of the school's Business Startup Center, has a point: Ten minutes to the north of campus is the much-buzzed about Downtown Project, an effort into which Zappos founder Tony Hsieh has poured $350 million of his own money to turn Vegas into a start-up oasis.
About 20 minutes to the south of the UNLV campus is the Switch InNEVation Center, a 40,000 square-foot tech coworking facility that opened in April 2013. Several start-ups have leased space already, including Tracky, Zoomfile, Tabeso, Ticketcake, Originate, AlertID, and ANI.
Still, UNLV is not exactly the Stanford of the desert--not yet, anyway.
But if all goes according to plan, UNLV will become a major part of the plans to reinvent the city as a start-up destination. Las Vegas, like many U.S. cities--including Detroit, Kansas City, and Omaha--is eager to fashion itself into a place where government is friendly to entrepreneurs, real estate is cheap, capital is waiting to be deployed, and talent is plentiful. The university is doing its best to help with that last item.
"Startups are now mainstream--they're the new Hollywood," says Steve Blank, the Silicon Valley serial entrepreneur, author, and Stanford lecturer. "People now understand high-growth start-ups are a really important part of the economy. They want to emulate what we're doing here."
But as is seen in Las Vegas, making all of the right forces align to build a thriving start-up culture is more difficult than it at first seems.
The Makings of a Start-up Cluster
Start-up ecosystems--or "clusters," a term Harvard Business School professor Michael Porter introduced into the vernacular in the early 1990s--don't tend to materialize spontaneously. They require certain ingredients to take shape.
Brad Feld, a Boulder-based investor and author of Startup Communities: Building an Entrepreneurial Ecosystem in Your City, says clusters need "feeders" and "leaders." Feeders include universities, investors, corporations, and mentors, while leaders are the entrepreneurs themselves.
For a start-up cluster to exist, Feld says the entrepreneurs need to lead the way. "It's important to realize that being a feeder is not a bad thing," he says. "However, the absence of entrepreneurs as leaders, or the overwhelming leadership by feeders, will doom a start-up community."
Nielsen, for one, is bullish on the idea that those entrepreneurial leaders will come straight from UNLV. "This past January I had a chance to talk with incoming graduate students," he says. "I asked the audience, 'How many of you have thought about starting a business?' Probably 70 to 80 percent raised their hands."
Perhaps Tony Hsieh is Las Vegas' leader. He certainly has the will and the means to nurture a start-up community. The question becomes: Is one man's work enough?
Duncan Logan is one person who's watching what's happening in Vegas very closely. He's the founder and CEO of RocketSpace, one of San Francisco's elite accelerators (he calls it an "innovation campus") for high-growth, seed-funded tech start-ups.
Since its founding in January 2011, RocketSpace has become remarkably successful at attracting top-tier tech firms. It currently attracts 30-35 applications every week, and has been home to a few high-profile alums including Uber, Zaarly, and Leap Motion.
Now Logan is looking to take the RocketSpace model elsewhere--specifically to cities with a high concentration of tech talent, plenty of venture capital, and a strong political will. New York and London are in the works for later this year, but Logan has his eye on Las Vegas.
"Las Vegas is super interesting to us," he says. "Tony [Hsieh] set up a fund, and they've definitely got the political will. But it's really one man's effort. It'll be interesting to see if it really happens."
While Duncan is optimistic about the city's long-term prospects of growing local entrepreneurship, some concerns remain. Chief among those is the lack of a top-tier university. Compared to cities like San Francisco, New York, and London--where each has several universities within a 60-mile radius--Las Vegas has a relatively small number of college students. UNLV, which currently has about 25,000 enrolled students, is by far the largest four-year college in the area.
"Where is the talent going to come from?" Duncan says.
Feeding the Feeder
To his credit, Nielsen is doing his best to grow the Startup Center at UNLV to give the program more visibility. Last year, Nielsen applied for--and received--a $200,000 SBA grant to do just that. Now, it has a three full-time employees who provide assistance to student entrepreneurs and help grow the roster of Las Vegas-based entrepreneurs who serve as mentors to the students. They're increasingly inserting themselves into familiar start-up nodes: In March, Nielsen and a colleague traveled to South By Southwest, the first-ever official delegates from UNLV.
Besides the Startup Center, the school has a Center for Entrepreneurship, which is an MBA program with courses that guide students from the "idea stage" to creating a business plan, and, in some cases, an actual business. At the end of each semester, students compete in design competitions to win $15,000 grants to develop their projects. The school also has an operating VC firm, Rebel Venture Fund, that makes small investments (typically between $10,000 and $25,000) in Nevada companies.
Nielsen recognizes that the university feeder system is just one element of many that will ultimately contribute to the viability of Vegas as a start-up cluster--a process that may take decades to achieve. But, in true Vegas fashion, he believes the city holds a wild-card.
"You have risk takers in this town that just start doing something," he says.
LearnVest's Alexa von Tobel on how investors are similar to spouses, Likeable's Dave Kerpen on social media, and MultiFunding's Ami Kassar on borrowing options. Plus, Scott Case on the power of networks, and more.
Instagram's journey from launch to acquisition to continued growth is a Silicon Valley dream--and a well documented one, at that. Here's a few things you might not have realized.
On the night of Instagram's launch, in December 2010, founder Kevin Systrom sat by his computer, watching the users sign up. "Are we counting wrong?" he asked himself. They weren't. By the end of its first week on the app store, Instagram had been downloaded 100,000 times.
Less than two years later, without generating a cent of revenue (but attracting some 27 million users), Instagram was acquired by Facebook for a staggering $736.5 million--now the subject of a recent Vanity Fair feature by long-time tech writer Kara Swisher.
Couched in a 4,500-word feature story, the 18 months in the life of this small company might seem like a roller-coaster ride. But the reality, perhaps, is a bit more mundane.
Reflecting on his meeting with Mark Zuckerberg--a meeting that would lead to Facebook's eventual acquisition of his company--Instagram co-founder Kevin Systrom muses that "some of the biggest decisions get made relatively quickly, without much fanfare." The Social Network, this wasn't.
But there were, of course, other story lines at play--some of which the casual observer may not have realized. For the curious, close followers of Instagram's rise, here's a few nuggets Vanity Fair leaves out.
1. Instagram won a battle for check-ins. That's ironic.
Early on, before Instagram was called Instagram, it was Burbn, a location-and-photo-sharing app based on the concept of "checking in." But the feature was clunky, and Systrom and Krieger decided to streamline the service. When they eventually pivoted to Instagram, they scrapped the check-in.
"Instead of doing a check-in that had an optional photo, we thought, Why don't we do a photo that has an optional check-in?" Systrom tell Vanity Fair.
Two other start-ups were fiercely competing for user's check-ins: Foursquare and Gowalla. This battle has been heavily documented (Gowalla was eventually acquired by Facebook) but Instagram's name rarely pops up. Perhaps it should. Josh Williams, Gowalla's co-founder and former CEO, writes on Medium:
It turns out there was another app that shared a similar vision called Burbn. They were building yet another check-in type service loaded with every feature but the kitchen sink. But early user feedback, coupled with a desire to avoid the check-in battle shitshow already in progress, led them to drop everything to focus on one simple feature: photos.
They made the act of taking and sharing photos (many of which just happened to be location-tagged) fast, simple, and fun.
They made their own rules. They called it Instagram. That whole see the world through the eyes of their friends thing?
Turns out Instagram did a pretty good job of this.
While we were busy playing tug-of-war over check-ins, someone else found a path to the goal with less friction.
About a year after the launch of Instagram, Gowalla's service would shut down and several of us would join Facebook. Others would move on to new endeavors of their own. Ironically a couple from the team would join Instagram.
2. Instagram's well-funded competitor shut down three months after Instagram's acquisition. That's a more typical Silicon Valley tale.
Here's a sobering reminder of the even more quintessential Silicon Valley story: that of the well-funded start-up, ripe with all the right connections and investors, all the right ideas--without the serendipity.
PicPlz, a mobile photo-sharing app that was perhaps Instagram's biggest competitor, raised $5 million from Andreessen Horowitz--a move that essentially said Andreessen had "chosen" PicPlz over Instagram. ("Andreessen Horowitz was a big name … and it was like, It sucks to get turned away," Systrom recalls.)
After the acquisition, in April 2012, PicPlz's founder, Dalton Caldwell, went on to say that though "PicPlz didn't win," he has "ZERO shame or regret for doing my best...The fact is, I saw the writing on the wall that we wouldn't win early and pivoted out of photo sharing which I had ~90% of my series A cash still in the bank."
In July 2012, PicPlz shut down.
3. Forget about the $57 million. Instagram didn't even need the $500,000 it raised in March of 2010.
Vanity Fair does a nice job explaining the investment process--from the $500,000 initial seed round, to the $7 million Series A round led by Benchmark, to the $50 million investment just days before the acquisition. But it leaves out one crucial detail: The scrappy Instagram team might not have needed the money, at least initially.
"You can go off and raise $40 million in a Series A, but it turns out you don't need a lot of money to get off the ground these days," Systrom says in a 2011 Stanford talk. "We spent like $60,000 to launch our first version of Instagram. Sixty-K. We had raised 500 [thousand dollars] and we were kicking ourselves the second day after... not after we raised, but after things started taking off. We were like, 'We have all this money left over and we got this far.' It turns out you can bootstrap yourself with Amazon Web services. You need two engineers these days to do things well. And it turns out that you can get a lot done on a shoestring budget."
Exceptional leaders differentiate themselves by doing a few things better. Here are six things you can learn from them.
What makes an exceptional leader exceptional?
This was the topic I had the fortunate opportunity to discuss recently with a class of graduating university seniors. Many of the students believed that future business leaders needed a new set of leadership skills that recognized the new global economy that continues to be molded and shaped by rapidly changing technology and globalization.
They aren't wrong.
They were overlooking, however, the fact that fundamental leadership skills are characteristic of all great leaders, past and future. What differentiated exceptional leaders from great leaders, however, was not necessarily how to amend these characteristics but rather how to execute them better.
Here are six things exceptional leaders do better:1. Great leaders are exceptional communicators and orators. Exceptional leaders are better at knowing when to shut it and listen.
Being able to motivate and influence others is an incredibly important skill for a leader. The most exceptional leaders, however, are often those who ask more questions than they answer. Not coincidentally, they also know the right questions to ask. Typically, the reason exceptional leaders are great communicators is not because they orate well but rather that they are better at understanding with whom they are speaking.2. Great leaders are exceptionally idealistic vision setters. Exceptional leaders are better at admitting when they are wrong.
Great leaders operate innovative companies that often challenge a business or cultural paradigm. Exceptional leaders are no different, except that their companies endure. Think about it.3. Great leaders are exceptionally organized and analytical. Exceptional leaders are better at delegating.
I do believe that great leaders need to possess a high degree of organizational skill and be able to apply analytical thinking to understand complex business situations. Indeed, the age of Big Data is making these skills even more necessary. Exceptional leaders, however, understand the importance of and how to surround themselves with exceptional talent and delegate tasks and responsibility to them.4. Great leaders are exceptional problem identifiers. Exceptional leaders are better problem solvers.
One trait that separates great leaders from the field is the ability to delve into a problem, ask the right questions, and understand the root cause of an issue. This is not as easy as many believe. Exceptional leaders, however, not only intuitively understand how to do this but also how to construct and assess the problem in terms of a solution. It's a fine line that exceptional leaders understand.5. Great leaders are exceptionally confident decision makers. Exceptional leaders are better at dishing credit.
A great leader is really adept at running a great company. An exceptional leader, however, does not necessarily run an exceptional company. The rest of the company does. Think about it.6. Great leaders are exceptionally smart. Exceptional leaders are better at not being stupid.
Not being stupid is one of the most undervalued skills today. This goes beyond bad business miscalculations to include remarkably stupid personal decisions leaders make that inevitably seep into and tarnish a business. Exceptional leaders instinctively know how to keep their noses clean and avoid precarious situations.
The debate will assuredly continue about what exactly differentiates an exceptional leader from the rest. For certain, the graduating seniors are convinced that technical skills, such as being fluent in a programming language like HTML, are key factors to becoming a great leader in the future. Again, they aren't necessarily wrong, but I am hopeful that they will find their youthful exuberance as a much more valuable asset!
So which other skills are exceptional leaders better at? Share your thoughts below.
If you're looking for a business, industry, or career to sink your teeth into, look no further than your next meal. 10 reasons the food industry is booming.
You'd never know the economy is in a slump from the state of the food industry. Specialty food sales in the U.S. alone grew 13 percent to $85 billion in 2012. And Americans consumed a record $34 billion worth of wine last year.
If you're at all into food (I mean, who isn't?) and looking for a business, industry, or career to sink your teeth into, look no further. Here are 10 reasons that food isn't just the way to your heart; it's the way to your wallet, too.
Venture capital flowing into food tech. Venture capitalists poured $350 million into food tech companies last year, an increase of 7.6 percent over 2011, according to research firm CB Insights. Not only that, but the number of deals increased by 37 percent, including robust activity in international markets.
Gourmet to go. Just because there's growing demand for healthy and tasty food doesn't mean people have the ability or the time to make it or eat out all the time. There's huge and growing demand for personal chefs, party chefs, specialty caterers, and thousands of gourmet and pre-made food websites. If you've got a kitchen and a cool recipe, you can make it and sell it.
Food franchises. If you wanted to own a food franchise business, you used to be limited to the likes of McDonald's, Subway, and Pizza Hut. Not that that's a bad thing, but these days, the choices are virtually limitless, from Baja Fresh to Ben & Jerry's. While restaurants like P.F. Chang's and Cheesecake Factory don't franchise domestically, both companies are looking for international partners to license.
Diversity. America has always been a melting pot, but we didn't always eat that way. If you grew up on the East Coast in the 60s or 70s, chances are you never heard of Mexican or Thai food. That's all changed now and it's opened the door for family-owned restaurants that specialize in all sorts of ethnic cuisines.
TV for Foodies. We've come a long way from Julia Child and Galloping Gourmet Graham Kerr. With blockbuster hits like Top Chef, Kitchen Nightmares, and Iron Chef America, food TV has turned into a booming media business. The competition is fierce but the opportunity is there for anyone to become the next Bobby Flay or Rachael Ray.
Health restricted diets. There was a time when the only diet foods you'd see were sugar-free foods for diabetics. Now, we have lactose and gluten-free foods and, the more we discover about how what we put in our bodies affects our health, the more fragmented our food choices will become. And choice spells opportunity.
Demand for natural and organic foods. Besides all the Whole Foods, Trader Joe's, and dozens of other markets specializing in natural and organic foods, there are thousands of farmer's markets popping up in cities big and small across the nation.
Sustainable and safe agriculture. As an entire industry retools to become more animal and environmentally friendly, and to improve the healthfulness and safety of our food supply, opportunities abound throughout the food chain.
Packaging and cold transport. Ever wonder how all that fresh and frozen food gets to your grocer without spoiling? New techniques in flash freezing and fresh and frozen food packaging and transport have enabled huge and growing industries.
New world wine, crafted beer, premium liquor. America's wine industry is booming and not just in California, either. Wine making has popped up in nearly every state, even Texas and Alaska. Not only that, but you can start small by growing grapes and selling them or buying the grapes and trying your hand as a wine maker. Likewise, demand for specialty brews and premium liquors has never been better.
The word 'wait' can be destructive to a growing business. Here's why.
Wait. What a crappy word.
Does anyone actually like waiting? Is a "waiting room" a good place? Is waiting in line fun for anyone? I can't think of anything worth waiting for. Okay, maybe fresh baked bread or a slice of good New York pizza but that's about it.
In my online marketing business VerticalResponse, I live by the minute. Every minute we are around we're bringing in new customers, making sure they're taken care of, generating revenue and hopefully a profit from it. If one day goes by that we don't do something to drive that specific behavior, that day is lost...forever. That's right, there's no making it up.
It's not an easy concept for people to grasp, especially folks who come from the world of big business to work for us. They're not usually fast moving, and will "wait" to get something perfect rather than do it well, and do it now.
Perfection is overrated. What's perfect? What's "done?" Nothing. Ever.
So my motto is and has always been:
- Do something, don't wait, even if it's not perfect.
- Learn from it.
- Refine it.
- Make it better.
Do you share this motto and if not, should you?
New research reveals the least-friendly states for start-ups. Where does your state fall?
Where's the best place in the country to start a business? For that matter, where's the worst? Thanks to the U.S. Chamber of Commerce, we now have some pretty good answers.
The Chamber released its Enterprising States report recently, which "takes an in-depth look at the priorities, policies and programs of the 50 states that are vital for job growth and economic prosperity," including "entrepreneurship and innovation."
That gives us a unique, data-driven opportunity to rank the states by how friendly they are to new ventures. Today, I'll take a look at the 10 worst of the bunch. In a future column, I'll examine the states that are doing a better job.
It's fair to say that the University of Wisconsin-Madison probably saved the Badger State from an even worse ranking. Wisconsin ranked 11th in "academic research and development as a share of gross state product," which is one of the six criteria of innovation and entrepreneurship in the study. The downside? A very low "business birthrate," and a small percentage of high-tech firms as a share of all businesses.
#42: South Dakota
A middling percentage of self-employed and a big jump in the percentage of science, technology, engineering and math (STEM) jobs are the silver linings for South Dakota. The problem is just that there aren't that many high-tech firms now. (Remember when Gateway was there?) The state does better in its overall business climate ranking, and it "continues to highlight its lack of personal and corporate income taxes to attract new and expanding businesses."
A low "business birthrate" knocks the Hoosier state toward the bottom of the list. Its other entrepreneurship ratings are all in the bottom half of the country, but the overall business climate isn't too horrible. Indiana "has embraced a job creation strategy focused on holding taxes in check, investing in infrastructure, offering targeted support and incentives to job-creating industries, touting the state's low cost of living, and capitalizing on its crossroads position," the report said.
There aren't too many people even trying to start businesses in Iowa, at least according to the study. (Iowa came in 49th for "business birthrate.") But, there are some real bright spots. Ranked 12th for "academic research and development" and 14th in STEM job growth, there's good reason to think Iowa will be doing a lot better on the list in the years to come.
The Volunteer State did no better than #30 in any entrepreneurial category. There just simply aren't that many STEM jobs, which is either the cause or effect of having a low percentage of high-tech ventures to begin with. "Tennessee's strengths are in exporting (ranking 11th overall) and in its 12th-ranked business climate," the report said. "The Volunteer State ranks 29th in overall economic performance but 17th in short-term job growth, a sign that growth may be accelerating."
With a significant growth in the percentage of self-employed people, and a respectable #18 ranking in terms of academic R&D, what is it that sends Mississippi to the bottom of the list? An absolute dearth of high-tech jobs and firms. Mississippi was dead last in the concentration of STEM jobs, and it ranked #49 in the report's overall economic performance category. Bright spots: The state is betting its entrepreneurial future on the health care industry, according to the report, and it ranks high when it comes to exports.
It's not dead last in any of the innovation and entrepreneurship categories, but Kentucky doesn't really shine anywhere either. Its best showing is a #23 for STEM job growth, although that may be more of a function of not having many STEM jobs to begin with. That said, the report credits Kentucky with marked signs of increasing economic activity, including job creation (apparently, just not the kind of STEM jobs that are seen as an indication of entrepreneurship).
A lack of STEM jobs, the second-smallest percentage of high-tech firms, and a tiny percentage of people reporting they were self-employed sent Arkansas to the bottom of the list. Paradoxically, it ranked right in the middle--25th--in "business birthrate." (Of course, starting a business is no guarantee of actually growing one to success.) Possible bright spot: "One of the largest private investment projects in state history, a $1.1 billion steel mill, was announced in early 2013."
Very few STEM jobs and the fact that Maine came in dead last in number of self-employed combined to push the state near the bottom of the list. Overall, Maine is just in rough shape, according to the report. Looking for bright spots, the report cited the state's "Business Friendly Communities initiative to encourage communities to review their economic development and business services."
#50: West Virginia
West Virginia ranked dead last in "business birthrate," and no better than #33 in any other innovation and entrepreneurship category. The state has a "strong emphasis on creating jobs in manufacturing," the report says. Want more statistical proof? West Virginia ranks near the bottom in terms of broadband Internet speed and connectivity. It's tough to start a high-tech firm in the 21st century (or any business, really) if you can't count on reliable broadband.
These irritating customers are usually more bother than they're worth.
Most of the time, customers (and prospective customers) are great. However, there are eight types of customer that are usually more bother than they're worth. Here they are, along with some advice for coping with them.1. The Lookee-Loo
They are "interested" in your company's offerings but have no intention of buying from you... or anyone else.
Your best defense: In your initial meeting, determine the prospect's financial result of NOT buying. If that number is small, politely move on.2. The Surpriser
They seem to negotiate in good faith but, just after you've made an agreement they demand a huge discount "or the deal is off."
Your best defense: Just say no. The customer will respect you for holding firm. If the deal disappears, it was never real in the first place.3. The Freeloader
They demand you write a detailed proposal, then use your proposal to extract concessions from their current vendor.
Your best defense: Never write a substantive proposal without extracting a promise that you can personally present your findings to top decision-maker.4. The Brick Wall
No matter how much you try, they won't provide you with the information you need to discover whether or not you can help them.
Your best defense: Throw the ball back into their court by asking: "So, how exactly can I help you?" If they don't have an answer, shrug and move on.5. The Enabler
They tolerate unethical behavior from your competitors and expect you and your firm to be similarly "flexible."
Your best defense: Never do business with any company or person who asks you to do something unethical or illegal.6. The Invisible Man
They confirm appointments to meet with you but are "called away on important business" when the meeting is supposed to occur.
Your best defense: If it happens once, no big deal. Twice, still no big deal. One more time, assume it's intentional and move on.7. The Poseur
They claim to have full authority to buy, but actually play a minor role (if any) in the decision-making process.
Your best defense: Keep the poseur involved as you increase your list of contacts at the customer site.8. The Job Seeker
They pretend that their company is in the market for your offering but are actually trying to build job-hunting contacts in your industry.
Your best defense: Provide your best advice to the job seeker then determine who else (if anybody) you should be talking with.
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A healthy workforce is a hard-working work force. Here are some practical programs that have worked for other businesses.
You want a healthy workforce. Healthy employees miss less work, concentrate better when they are there, and cost you less in insurance fees. But, employees push back if you do things like CVS Pharmacies did--requiring employees to reveal personal health details or else pay extra towards their health insurance.
But, how to get people healthy? You have neither spare time nor spare money lying around. Here are some ideas that might help your business out.
Give people their weekends back. Healthcare consulting company Vynamic implemented a company policy that states: "To promote better balance, employees are to refrain from sending non-urgent emails to other employees between 10pm and 6am Monday through Friday, all day Saturday and Sunday, and all Vynamic holidays. In urgent matters, call or text is preferred over email." While recognizing emergencies do exist, they also stopped the constant flow of requests and information that prevented their employees from relaxing.
Make lunchtime fitness practical and possible. At Bandwidth, a communications technology company, rather than allowing employees 30 minutes to grab a burger and fries, they encourages 90 minute lunches, so that employees actually have time to hit the gym. They further encourage physical activity by sponsoring sports teams.
Health food, even at 2:00 a.m. Scripps Hospitals knows that people working in a fast paced hospital environment often count on vending machines for their food. So, rather than removing the unhealthy vending machines and making their employees hungry, they installed self-service kiosks from FITzee Foods, stocked with healthy food, including complete meals. In order to make it a bit more affordable, they subsidized the cost of the food, making it an even more attractive option. The end result? Weight loss and reduced health care costs for their employees. Plus, something better than a candy bar available on the overnight shift.
Appeal to their sense of competition. Manufacturing company Ashcroft implemented a year long fitness program that focuses on friendly competition. Employees can form teams or compete one on one in programs put together by GlobalFit. The length of the program is more likely to result in real changes than a single 5k run or month long fitness challenge. At the one year mark, Ashcroft has 68 percent of their employees voluntarily participating.
Outsource your wellness. Printpack does packaging, not fitness, so they lacked the expertise to design and carry out fitness programs, even though they knew that a healthy workforce was beneficial to their bottom line. So, they found a company that could take care of it for them--TourdeFit. No more negotiating contracts with fitness centers, or trying to find resources for their employees across the globe. Employees can find what is best for them, which makes people more likely to get in shape.
What wellness programs have worked for your business?
Unless you start delegating tasks you would normally trust only to yourself, you're doomed to keep running in place, headed for burnout.
What would you do today if you didn't have to work?
That's not a trick question. It's a question that trainers with the Strategic Coach program ask in order to help break their entrepreneur clients of work addiction. Dan Sullivan, the Toronto-based founder of Strategic Coach, has often said that you can have everything you want in life as long as you're willing to give up everything you don't want. The problem is that a lot of super-successful high-performing people never stop to think about what they'd be doing today if they didn't have to do anything.
The survey research I did for my book Business Brilliant revealed a lot of interesting things about the habits of self-made millionaires. The research showed, for instance, that such super successful individuals are much better than most people at limiting their activities to only those things that they do best. They are very good at getting others to do work that they themselves are not exceptionally good at. It's a trait that ensures they don't waste time on activities that would be better handled by people with superior expertise.
The problem is that when such top performers accept more and more responsibilities, they are loathe to take the next logical step and delegate some of the work that they are exceptionally good at. Why? Probably because that would require them to change what they regard as a winning game. My research shows that more than 60 percent of self-made millionaires credit their work habits with making them successful. Among the super-successful, those who have a net worth over $30 million, 80 percent say their work habits are responsible for their success. How can you break a habit that's been that good to you?
So would you be surprised to know that these self-made multi-millionaires work about 56 hours per week and say they spend a lot of that time "putting out fires"? About eight in 10 say they find their work "stressful and not enjoyable," and only a little more than two in 10 say they know how to detach from work and relax. Having achieved wealth that most people can only dream of, four out of five multi-millionaires spend their days like hamsters who can't get off the exercise wheel.
So at Strategic Coach, trainers introduce an exercise they call the "retirement trick." They ask entrepreneur workaholics to envision what tasks they would still do if they were to retire tomorrow, if they were totally free to do only the work activities that they truly enjoy. Most entrepreneurs respond to the exercise by realizing that they would stop coming into the office every day. And if they didn't have to be there, they would allow a lot of the tasks they do very well to be taken up by their employees--who would likely do them just as well.
In Business Brilliant, I profile Stanley Doobin, the head of a privately-owned maintenance company called Harvard Maintenance, who used the retirement trick to break his habit of working 14-hour days, seven days a week. Despite his background in accounting, he's since pried himself away from his company's day-to-day financial details. Now he spends half his time recruiting new executives and prospecting for new clients, the two activities he enjoys the most, which also happen to provide the business with the greatest value. His company has grown faster than ever thanks in part to his new work habits, and for the first time he was able to take a two-week vacation without a phone call or even an email to the office.
According to Dan Sullivan, lots of high-performing entrepreneurs reach what he calls their "ceiling of complexity" without ever realizing it. (And since they're in charge, no one will tell them!) When you hit that ceiling, no amount of extra effort at what you do best will get you better results. Unless you break with your winning game and start delegating tasks you would normally trust only to yourself, you're doomed to keep running in place, headed for burnout.
With the stakes that high, it seems like undoubtedly you should try and play the retirement trick yourself, or get help with some coaching. What would you be doing today if you only did the parts of your job you really enjoyed? And which of today's tasks did you keep for yourself solely because you don't want to trust anyone else to do them? These are important questions for you to ask yourself. You pride yourself on being a master of risk and reward. But, to paraphrase Dan Sullivan, are you willing to risk giving up everything you don't want, in order to have everything that you do want as your reward?
When entrepreneurs and pilots screw up, they take other people down with them. But the similarities don't stop there.
Entrepreneurs are a lot like pilots. They're goal-oriented and disciplined. To be effective, they must project confidence and competence at all times. And, like pilots, they know that if they screw up, they'll take other people down with them.
Professional pilot and change management consultant Moe Glenner explores that similarity in his new book Selfish Altruism. It turns out there are many valuable leadership lessons you can learn about how to run your company by taking note of the behaviors that get pilots into trouble. Here are four of them:
1. Don't assume you always know best.
What Glenner calls "know-it-all" pilots can get themselves and their passengers killed. "Consider the pilot who argues with air traffic control or ignores weather forecasts... or even ignores indications that the airplane is not performing optimally," he writes.
Business leaders make the same mistakes, he adds, "based on the premise that 'I already know everything there is to know and the directive conflicts with my already established knowledge.'" The problem, of course, is that nobody really knows it all. "There is always more to learn and there are always people who know more than we do," Glenner notes. So when someone gives you a piece of advice, or tells you to follow a rule, at least take the time to consider that person may know something you don't.
2. Don't react to problems too quickly.
When a flight goes wrong, it's natural to feel compelled to do something immediately to fix the situation. But an overly fast reaction can do more harm than good, Glenner explains. "Let's say the pilot has discovered that his plane is losing altitude. An impulsive reaction might be to pull back on the yoke. The problem with this is that pulling back (without doing anything else) decreases airplane speed and may in fact cause a stall/spin reaction."
There are many situations, in flight and in business, when something goes wrong and a quick response is needed. But it should always be a well-thought-out response. "The remedy for impulsive behavior is the realization that there is time to think and then implement appropriately," Glenner writes. "A pilot needs to check all his instruments (quickly) to identify what the real cause is." It could be that power was cut inadvertently, or weather may be causing the unexpected descent. Once the pilot has determined the cause of the problem, he or she can take appropriate action without risking making things even worse.
3. Don't believe you're invulnerable.
It's human nature to think that because nothing has gone wrong so far, nothing ever will, but that's the kind of thinking that causes planes crashes.
For instance, Glenner describes the three sides of a rectangle that a pilot must fly to land properly on a runway. Each corner requires the correct turn and altitude, but these can be thrown off by weather and other conditions. "Many pilots believe this can't happen to them," he writes. "Over time they fail to be as diligent or continue to educate themselves on the potential dangers. This complacency has caused many an accident, often with tragic results."
In the business world, Glenner notes, the same kind of thinking can lead companies to either dismiss a risk, or have only vague plans for dealing with it. That creates a greater risk, he writes, "the risk that something can derail a project without a set plan to remedy it."
Instead, he advises a formal risk assessment discussion, resulting in a written plan for dealing with adverse contingencies. While you won't be able to anticipate every problem, you can give yourself the best chance to come out all right if a problem does occur.
4. Don't go it alone.
Some pilots--and some entrepreneurs--develop a macho, I-can-do-it attitude that leads to trouble when they try to take on more than they can handle. "Consider a pilot who only had three hours of sleep the night before a flight," Glenner writes. "For commercial pilots, this would likely be a no-go factor. For private pilots, it should also be a no-go factor, except some pilots believe they can make the flight, lack of sleep notwithstanding."
The dangers of this behavior in an airplane are obvious, but it's dangerous in business too. If you are struggling with too much responsibility, too many hours of work, or tasks that you don't have the know-how to do--get help. (Here are some tips for learning to be a better delegator.) Toughing it out when you're over your head is bad for your business. If you're not well-rested and thinking clearly, your company, and its employees, may pay the price.
The business world loves CEOs with charm and vision. But research suggests chasing these leadership traits comes with plenty of dangers.
The study of leadership involves a number of different popular models, as I wrote in the book Everything Leadership. One that has been particularly pernicious is the Great Man theory, in which certain people are born to leadership and others... well, aren't.
Silly, right? Great leaders--and remember, there is not one type of leader for all types of organizations and situations--have often had to learn how to lead. It's become clear that you don't have to be a white male of European descent to guide others effectively.
The closest heir to the Great Man throne has been the Visionary. Such people (Steve Jobs comes to mind), because they can see farther and more clearly, can move a company to greatness, inspiring everyone around them. You can hear the awe in employees' voices at certain companies when they mention the One at the Helm. Not only is there vision, but an implied charisma. And who wouldn't want to be like that?
Any entrepreneur who wants a strong business, according to some research out of the Warwick Business School at the University of Warwick in the U.K. Christian Stadler, an associate professor in strategic management, studied the leadership and strategy of such century-old European companies as Royal Dutch Shell, Glaxo, and LaFarge.
The ones that made it through the long haul had a leadership style that Stadler describes as "intelligent conservatism." These corporate cultures focus on long-term success and steady growth. Management tends to listen to employees and has a deep understanding of the company, as 97 percent of CEOs were promoted from within. These are often the people who also direct a company through its biggest transformations because they understand how to structure something new in a way that will work with the existing culture, practices, strategic aims, and investor relationships.
Where Charisma Fails
The problem of charismatic leaders is, ironically, their strength. When a company is moving in the right direction, the charismatic leader can super-charge progress. They're very good at getting people in the company to move in one way or another. But when they start to move in the wrong direction, they're just as good at getting everyone to nod their heads and move in lockstep.
Vision is important, but so is a keen sense of hearing. Leading a company means working with all the employees. Why assume that you're the only one with a good idea or keen insight?
Do you give up after a few sales calls? Expect new business to come from every networking event? It's time for a shift in mindset that you can take all the way to the bank.
Does the thought of hearing "no thank you" one too many times slow you down? Getting your products and services into the hands of future customers has its challenges, but when we add a fear of rejection to the mix, the challenge becomes monumental. What if you could see no as the magic word that gets you closer to the sale instead of letting it knock the wind out of your sails?
It’s entirely possible. Let’s begin by understanding why we take rejection so personally in the first place.
If you represent a product, you probably use it yourself and believe in it with all your heart, And those of you who are inventors have poured blood, sweat, and tears into developing your products, not to mention tons of money! For service providers the thought of rejection is especially daunting because your knowledge and talent are literally a part of who you are, making it feel truly personal. All of these scenarios make it only natural to embrace your business as an extension of your very being. Hearing no can feel like a very personal rejection.
But to realize your dream of success, a separation of self from your product or service is absolutely necessary. A simple shift in mindset will give you the courage and commitment to step boldly into the world of sales and move your product or service into the lives of the many customers who await them! Begin by taking on these simple mindset shifts and you may just become a sales machine!
It's not all about the sale.
Sometimes we put the pressure on by thinking that our cold calls should result in sales. Remember the true purpose of cold calling: of course it’s always about relationship building in the end, but in most cases the goal is to end up with one of the following outcomes:
- Permission to add the person to your database for periodic updates
- A plan to contact them at a later date when they may be in need of your service or product
- A request to take them off the list altogether
Simple, right? Understanding the purpose gives you permission to accept that not everyone is the perfect candidate. Those who wish to be removed from your list aren’t saying that they don’t like you or your product; it simply means that it’s not right for them at this time.
It's not personal.
Remember that you are speaking to a human being who has feelings, moods, and concerns, just like you. If you do encounter someone who is rude or unpleasant, consider that it is not all about you. Do not take it personally! Most likely, this person’s mood has been pre-determined by all sorts of other circumstances. Allow them their space and get on with your day.
I'm already successful.
Too often we base our success on the final outcome. Take on the attitude that the phone call or initial meeting is the success. You have taken a huge step! And the more you get out there, the higher your odds of success. Take the heat off by visualizing an outcome that is best for all concerned. Sometimes, a "no" is the perfect answer because the circumstances aren’t just right. It’s best to know this so you don’t get into something that is doomed from the beginning. No matter what answer you get from your prospect, celebrate the fact that you actually made contact and are one step closer to your ideal customer.
It's all about the numbers.
Try to remove the emotion by seeing your phone calls and meetings as statistics. If you make twenty-five phone calls, odds are good that you will find one person who will want to learn more. If you effectively attend four or five networking events per month instead of per year you will build more relationships and increase awareness of your brand. Everyone hears the dreaded "no," but not everyone keeps plugging away at it. It’s like working up to 100 sit ups instead of staying at 20; the end result will be so much better. Get those numbers up there; love the "no" because it only means that you are getting closer to the yes!
I am not alone.
Did you know that 44 percent of salespeople quit trying after the first "no?" Considering that 40 percent of all solid prospects say no at least once before buying, this is a sad statistic. You are not alone in your fear and frustration, but if you can buck up and be persistent you will succeed! Again, the proof is in the numbers!
No matter how emotionally connected you are to your product or service, they are only as good as your efforts to promote them. Respect the hard work and dedication that went into your company by transferring the same determination to your sales efforts. You can do it!
You need to keep your business running but you also need to maintain your health and nourish your mind. Here's a scheduling trick to fit it all in.
Business gurus are endlessly urging busy professionals to build healthful practices and moments for renewal like these into their days. But don't they know you have a business to run? It's not exactly like you're up to your eyeballs in spare time.
Bold Academy founder Amber Rae thinks she may have found a way to manage to shoehorn it all in. She laid out her unique approach to scheduling recently. Rather that schedule hour by hour, Rae's technique is to use Sunday to map out her week, setting a goal in four areas for each day but leaving lots of flexibility within that framework. What are the four areas? Rae explains:
Work: For each day, I outline my "Top 3," meaning the three most important things I will have accomplished by the end of the day. Sometimes I'll map out the entire week on Sunday because my priorities are super clear. Other times, I'll decide on my Top 3 on a day-by-day basis.
Play: I've found that play enables me to self-express, reflect, and give my ideas space, which shows up positively in my work. Making time to create art, get into nature, go on photo walks, read poetry, skip down sidewalks and the like puts me in a constant state of curiosity and flow.
Fit: Movement keeps ideas moving forward so I aim to move my body for at least 30 minutes each day.
Push: Since learning and growth is important to me, I do something that scares me (almost) every day. This may be asking someone whom I deeply respect for an interview or writing about a topic that makes me feel vulnerable.
For each area she pins down an activity or goal(s) (say, a dance class for "play", or rock climbing for "fit") and writes it all up on a big grid for the week. Check out the article for what the finished product looks like, as well as Rae's other tips. For instance, she also recommends batching tasks that require a similar headspace together on particular days, so Tuesday and Thursday mornings are set aside for calls and meetings, while Saturday is a pressure valve to release over-scheduling anxiety with more spontaneity.
Why would this technique work any better than your ad hoc efforts to squeeze it all in? By being intentional and spotlighting your goals, you can keep better track of how you're doing, while having actionable ideas at the ready each day saves you from wasting time stressing out about what to do to fulfill those goals. Plus, the system seems flexible enough that it wouldn't feel too constraining and could bend to accommodate unforeseen tasks and sudden crises.
But Rae stresses you should feel free to tinker with her framework. "It's all about experimenting to figure out what works best for you," she concludes.
Could the "work, play, fit, push" framework help you fit it all in?
There's an entire field dedicated to studying how to nudge consumers to spend more--and it has come up with some pretty bizarre findings.
Some of the quirkiest things can make consumers more willing to part with their paychecks. Did you know, for example, that red is supposedly the best color for fast-food restaurants? At least, that's what so-called "color consultants" suggest. Never mind that human behavior is hardly consistent and the psychology of color is less than scientific.
There's an entire field dedicated to deciphering who spends what, when, and why--and it's come up with some pretty bizarre conclusions about how business owners might boost sales with subtle environmental suggestions. You decide whether they're worth the effort.
Let there be light.
Sunlight makes people happy. And happy people spend more money. That was the rationale behind a study performed by the University of Alberta investigating the effects of sun lamps on consumer spending. Students at the university who were exposed to a sun lamp while browsing were willing to pay 38 percent more for green tea, 21 percent more for a carton of orange juice, 27 percent more for a gym membership, 29 percent more for an airline ticket, and 56 percent more for a newspaper than their sun lamp-deprived counterparts.
Play it cool.
Risk-takers know how to keep their cool in high-stakes situations. In fact, they rely on it. Researchers at the University of Virginia and University of Houston found that gamblers--in the form of Missouri daily lottery consumers--were less willing to risk their hard earned cash when the temperatures increased.
According to the study, daily sales of Missouri Lottery scratch tickets in St. Louis County decreased by $594 for every 1-degree increase in Fahrenheit temperature. The reason? The psychologically depleting rise in temperature appears to decrease consumers' willingness to play complex games, researchers say.
Deal in green.
Cash may be king, but the efficiency of virtual payment methods, credit cards, and debit cards certainly threaten to dethrone the monarch. And that would be a shame, say researchers from Virginia Tech University.
Previous research into the psychology behind spending habits has revealed that consumers are less willing to part with cash than credit--but there's a catch. When it comes to food, customers who paid in cash, not credit, consumed 45 percent more calories than their peers. Folks who spend cash--which they view as a more painful move than charging it to a credit card--are more willing to indulge to alleviate the negative mood brought on by too much spending, the researchers say.
Sounds like great news for food brands... unless, you delve into more research on the topic. Another study claims cash customers remain stingy with their money even after making--and splurging--on a food purchase.