Common Sense for Founders – Part Two

Lady and hand (540x361)Business is about dealing with people, so developing a few soft skills to complement your technical expertise comes in handy when starting a company.  Here is a little common sense for the road:

  1. Pick up the phone.  All the interpretation, miscues and delays on email and text can easily be resolved with a quick phone call to clarify a meeting objective or next step. There’s nothing inappropriate about lobbing a quick call – if the person is busy, they won’t answer.
  1. Ask questions. Instead of bracing for an interrogation, or stressing about expectations for a presentation, make it your job to ask good questions that buy you time and protect you from landmines.  Inquiring minds show intelligence, interest, and desire for a relationship.
  1. Get a Yes.  A small “yes” is better than a big “no”.  Move the relationship forward with small asks that can get a positive response until you get the “Big Yes” (a sale or investment).
  1. Just like dating.  Use some intrigue to lure in your prospect.  Don’t be too needy or give away all your secrets too early.
  1. Give back.  Do you think people are helping you just because they like you or feel spiritually compelled to mentor, or that they should help you because they’ve already been successful? Get over it – figure out their interest and meet it, or be prepared for the gravy train to end before you’ve gotten your free ride.
  1. Look in the mirror.  If colleagues aren’t working out, it’s not just because they are stupid and lazy.  Reflect on how your ability to motivate and lead can impact the results you get from those around you.
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How to Make a Difference and Get Results

FT GuideBest known as Europe’s answer to the Wall Street Journal, the Financial Times has published their Guide to Management in conjunction with the Chartered Management Institute in London.  Lucky to know the author Ann Francke, I got the chance to provide my own advice for the The Last Word section on Advice From the Front Line.  Here are my thoughts:

Top tip

To keep that constant perspective on what’s most important, one of my favorite maxims is Dr. Stephen Covey’s theory of “big rocks”– know what’s most important in your life, and let all the “little rocks” fill in around the boulders. How easily we can get distracted by other people’s priorities!

Top pitfall

Ah, get that monkey off my back! Originally discussed in the Harvard Business Review in 1974, the politics of responsibility and delegation are still a trap, as I see myself and others take on responsibilities that “are not my/our job” and get on the slippery slope of being stuck with the ugly monkey.

Top takeaway

Clear vision is just another term for focus – the key to both long and short term success. For leaders in organizations both large and small, focus can be a constant challenge. Entrepreneurs who chase today’s shiniest star, or corporations who creep into far-afield business lines, rarely have a winning strategy, just a constant temptation. Jim Collins, author of Good to Great and Built to Last, addresses focus in his “hedgehog” concept and quantifies the impact on business results.

To read more tips from management experts, check out Ann Francke’s Guide to Management on Amazon.

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Common Sense for Founders – Part One

Watch Your Step (540x361)Call me a nudge but some things I see Founders do (or not do) defy common sense.  So here I go – the first 6 pieces of my mind:

  1. When you get a meeting, move a mountain to meet in person.  Connecting in person for a few minutes over coffee beats a phone call or email every time, especially if you aim to build a long term relationship, get market intelligence or honest feedback.  Many founders are so focused on efficiency that they miss the value of all the unexpected and intangible learnings and leads that happen in person.
  1. Just in case you didn’t know, business starts at 8am (or before). No one is watching what time you come in the office, but in a left-brained city like Charlotte business starts early. So phone and text should be at the ready.
  1. Does anyone still have a smartphone without email?  Acknowledging that email is dead and text rules for anyone under 35, if your prospective customers are the old guard then you better have a way to get their emails.  Promptly.
  1. Respond within 24 hours.  But only if you want their business. Or advice. Or money.
  1. Look people in the eye.  The age of ipads and iphones has led to a constant stare into the screen. If you are working to build a relationship with potential customers, advisors or investors then you need to build trust and respect, which starts with eye contact.
  1. Notes show interest, but you are not in class. Jotting down a few notes in a personal meeting shows interest and commitment to follow up. Writing down every word de-personalizes the meeting and puts you in a subordinate position.

There’s more. Stay tuned for Part Two!

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Why Techies Need a Business Partner

Last week I had two very different conversations with two very similar companies. Both had technical founders in the same general industry, but one founder had managed to recruit a team including a former McKinsey consultant, an investment banker and a seasoned sales lead – all willing to work for equity. The other founder was waiting for funding to recruit a business partner. Which company would you bet on?

Hiking Sticks - it takes two

Hiking Sticks – it takes two

If you need a business partner, don’t wait for funding. It is highly unlikely that funds will come first. Investors want to see a team, and you’ll need some business savvy to put together a pitch or even a grant request.

Here’s some advice for recruiting business partners:

  1. Get exposure to the business community.  Join networks, incubators, accelerator programs or university challenges to get on the radar. Let people know that you are open and interested in finding a strong business partner.
  2. Sell your vision.  Money follows vision. And that money includes people working for no cash because they believe in the vision.  If a business person can see the market potential and the uniqueness of your product, they may be willing to take the risk to come join you.
  3. Be willing to share equity. It makes no sense to hold onto 100% of nothing, when you could recruit a team to build you company and own 25% of something.  Ownership is a strong motivator, so share some upside when you find talent interested in creating the future with you.
  4. Be willing to share cash.  When the cash does come in, from investors or revenue, then it’s time to start paying enough to keep your team together. The dance of negotiation will determine how much and how soon, but the carrot of a strong vision for the future will keep negotiation on your side.
  5. Be willing to share control.  New owners want to put their fingerprints on the strategy and priorities for the company. You may think they are crazy, and maybe they are, but that’s where your powers of persuasion and willingness to share risk come to bear. Your new partners want to succeed as much as you do, and are investing their sweat and time as well as giving up other income opportunities. Trusting the intelligence and intention of your team is the only way to go.

 

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6 Questions from the Startup Judges

Between judging for  Startup Weekend, the Innovation Fund North Carolina, UltraLight Startups Future Energy and the Charlotte Venture Challenge I’ve heard over 50 pitches last year including those at the Charlotte Angel Fund.  Based on actual mistakes I heard in these pitches, here are 6 key questions where you don’t want to be flat-footed:

  1. Have you talked to any customers?  Now imagine yourself in New York City, standing in front of a crowded room, addressing a panel of investors including GE Global Research, Clearpoint Ventures and Shell International and you get this question.  You do not want to say “No”. You can hedge that you’ve thought about who some customers might be and that you will be talking to them very soon, but clearly that’s not soon enough.  Your credibility just went down the tubes.  NEXT!
  2. Who are your competitors?  I love it when entrepreneurs tell an audience that they have no competitors.  Water competes with Coca-Cola. Cash competes with credit cards. If you think you have no one else on the field, you better watch your back. Likely you are not looking at your market broadly enough, or in terms of needs versus solutions.  While you are identifying who is truly taking up your market share, also get ready to explain how you are different and why others in the market have failed to address your customers’ needs.
  3. How do you make money? If you aren’t generating revenue yet, be ready to explain who is going to pay for your solution and why you believe they will.
  4. Who else is on your team? This is no time to be a hero, steadfastly fighting alone in your mission. If you can’t find anyone else to join you, or you haven’t asked, or everyone has said No, then it’s time to figure out if it’s you or the idea that has left them cold.  Having a strong team is critical to early stage investors, so round out your skills with partners, a virtual team and advisors. Which leads us to the next question –
  5. Who are your Advisors? Strong advisors can add a lot to the credibility, expertise and access of your startup.  Attracting advisors is the first test of your vision, leadership and selling skills.  Identify your dream team and make a plan to meet and recruit them. Then motivate them to engage and stick with you by offering a small amount of equity.
  6. How much have you personally invested in the company?  This question was particularly important to the folks at Innovation Fund NC, because it shows a tangible level of commitment to your business.  Our local angel fund lost interest quickly in a founder who had no plans to leave his day job for 18 months. Investors want to see true skin in the game with both time and money.  It’s got to hurt a little before an outsider will jump in to share in your risk.

UltraLight

 

InnovationFund_NorthCarolina (1)

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10 Changes Happening In the Startup Environment

The landscape for startup ventures is rapidly changing according to Paul Singh, former Entrepreneur in Residence at the White House and partner at 500 Startups. Singh spoke at the dynamic International Startup Festival in Montreal a few years ago, and on reflection much of his perspective still stands, so I’m republishing the post.  The conference was sponsored by FounderFuel, a top tier mentor-driven accelerator that helps early stage startups raise seed capital. Accelerator program managers and advisers from Silicon Valley, Los Angeles, Boulder, Sydney, Charlotte, and Washington, DC joined  Canadian counterparts in Montreal to share ideas and learnings for accelerating entrepreneurial ventures.

Paul Singh, left, with startup program directors from Australia, Canada and Silicon Valley.

Paul Singh, left, with startup program directors from Australia, Canada and Silicon Valley.

Singh shared his insights on these global, technological and economic forces that are changing the landscape:

  1. Startup costs are getting cheaper, primarily due cloud technology. But it is increasingly expensive to scale at the products and markets fit stage.  So don’t get over-confidence from a quick build on your technology, because the market traction may be costly.
  2. Infrastructure is now virtual, diminishing the United States’ predominance as the mecca for innovation and new companies. The rest of the world is nipping at your heels.
  3. Traction is the new IP.  So instead of spending money and months tweaking your IP, go get a customer.  Reality is that the longer you are in the market with no customers, the more skeptical investors become.
  4. Capital is increasingly commoditized.  Look for added value from your investors.
  5. New reality is that money follows founders.  The best founders have access to capital.
  6. Early stage venture investing is not very sophisticated.  One venture capitalist later shared the “dirty little secret” that venture investing is very subjective, often based on chemistry with the founder.  Research and get to know the people behind the money.
  7. Advice, control and money are becoming unbundled.  Mentors advise, trusted third parties control outcomes through recommendations to venture capitalists, investors provide cash.
  8. Investing used to be about capital, deal flow and judgment. Today is it about access – can investors find and attract the best founders?  Accelerator program managers and investors may look outside their direct markets for good companies, increasing local competition.
  9. Accelerator programs should aim to provide the best access to functional expertise.  Get the best mentors, even if that means recruiting high impact employees in corporations to get into the operational weeds with founders. For example, a corporate marketing manager with a huge Google AdWords budget could be a fantastic mentor for a startup on online marketing.
  10. Scale and global perspective are more critical than ever. Accelerator programs should focus on specific verticals, regions or strengths with the goal to support the growth of local and global high growth companies. Go big or go home.

Bonus insight:  There are too many startups and not enough businesses.  According to Singh, one dollar of revenue counts as a business, so move quickly from incubating ideas into finding customers, getting traction and generating that first dollar of revenue.  If only it were that easy!

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Passion is the Fuel for Greatness

sc0002ac4d-PanoramaCal Newport denounces passion as a dangerous career guidepost in his book So Good They Can’t Ignore You. But he agrees with Malcolm Gladwell that mastery is what separates the average achiever from the stratospheric one.  In his book Outliers, Gladwell makes the case that it takes 10,000 hours for anyone to develop mastery – Mozart got his hours through obsessive practice in his early years; Bill Gates logged in his hours in high school before most of his peers even had access to computers. Their success didn’t happen upon them by chance, but by painstaking development of skill and talent.

10,000 Hours

It takes a lot of work to log 10,000 hours of anything.  For example, that means practicing tennis 7 days a week for 2 hours for 13.7 years.  Or three hours every day for 9 years.  Or one hour a day for 27 years. That’s a lot of practice.  And a lot of passion.

The question is – where did that passion come from? Was it “found” or “developed” or “coerced” by overbearing parents?

What the World Needs

Cal Newport argues that to find career fulfillment (or launch a killer company) you should focus not on what the world can do for you, but what you can do for the world – what you can produce that is needed. Then fill that need by becoming very skilled, and the joy of competency and success will lead you to fall in love with your career.

In fairness, this indeed describes the path of Steve Jobs.  He developed his passion for technology as a means to an end, until he found a greater passion for disrupting the status quo and “thinking differently”, which became his driving force.

But if we listen to scholar Gil Bailie, perhaps passion allows us to give the world something larger than it even realizes it needs. Bailie offers this challenge:

“Don’t ask yourself what the world needs. Ask yourself what makes you come alive, and go do that, because what the world needs is people who have come alive.”

The Battle Between Passion and Practicality

Newport’s viewpoint notwithstanding, you’ve got to have drive and desire to develop great skill – finding your passion comes first.  In all those hours of practice or study, something else is being sacrificed. I think of my cousin who gets up at 4:30am to take his daughter Katie to swim team practice, which she does every day even on holidays and summer vacation (although not always at 4:30am). All those hours of swimming mean something else is not being done – the choice of where to focus and what to let go of is being made every day. Katie may have dedicated parents, but she’s the one making the choice to be in the pool.

In the battle between passion and practicality, theologian Frederick Buechner strikes the balance:

“Vocation is where our greatest passion meets the world’s greatest need.”

What’s driving you?

Photograph courtesy of Gabriella Santander.

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Passion is Over-Rated

f10Your passion is a pipe dream. Best focus on your abilities. So goes the advice of Cal Newport, author of So Good They Can’t Ignore You. Taking a contrarian view of the popular mantra to “follow your passion,” Newport pans this advice as dangerous and cites case after case of people who followed their passions with no skill or business plan to back them up, finding quite little of their dreams.

Are you relieved to read Newport’s views? Were you starting to think it was just you who wanted to smack every person who asked you “What’s your passion”?

Competency First, Passion Follows

Newport argues that passion follows competency – once you’re good at something, you start to love it. This sounds like the mother of an arranged marriage saying to her daughter, “He’s good for you. You’ll learn to love him.”  As passionless as this sounds, sometimes those mothers are right. I wasn’t in love with finance.  I was always good at finance, but loved marketing.  I got into financial services marketing to solve the dilemma. But mostly I was good at staring into the unknown and making it rain money. Diving in and learning new industries, making clients happy, getting people who hated or feared my company to come around. The product was almost an after-thought to the challenge. Finance paid the rent and for lots of stamps on my passport….

Case in Point: Steve Jobs

As Newport tells the tale, Steve Jobs wasn’t particularly passionate about computers before he started Apple.  He majored in Western history and dance, with Eastern mysticism on the side. He teamed up with Wozniak for a while, but then disappeared for several months to hang out at a commune.  When Jobs finally saw an opportunity in technology, he got Woz to build it in his free time. Jobs just liked to sell.  His dreams were small until his products started generating cash. Then passion began to set in.

The Path to Success

Here’s Newport’s advice in a nutshell: Figure out what works for you, what you can offer the world, and put in the hours needed to develop your skills. The idea that the world will conspire to support your dreams just because you commit to them doesn’t always work. Look around at folks scraping by. Don’t they have passions?  Look around at folks succeeding wildly. Are you emulating people who are passionate or those who know what they’re doing?

Photograph courtesy of Gabriella Santander.

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What a Dancer Can Teach a Startup

Dwight (540x386)Dwight Rhoden is a dancer, choreographer and business owner. When he creates a new piece for his company in New York, he wants to showcase his creativity and his dancers. He also wants to sell tickets. Dance is his livelihood and the livelihood of his dancers. He must appeal to audiences in New York, where his company is based, and around the world where they perform.

In Charlotte, Dwight is a resident choreographer for the Charlotte Ballet, which means he creates new works each year for them to premiere. Patrons of the ballet can underwrite new pieces, and I’m lucky to have had the opportunity to do just that. As a benefit, I got to know Dwight, asked him about his creative process and watched the dancers evolve their work. In the process, I realized there’s a lot Dwight can teach the founder of any business.

 Ideas into Action

You want to start a business. A dancer wants to create a new piece. You look at a blank computer screen. A dancer looks into an empty room.

Dwight begins with a concept, what Twyla Tharp calls the “spine.” It’s the first strong idea around which a piece will be built. Dwight sketches out his strong idea on a single sheet of paper, and then creates initial “phrases”, or eight beat counts, around which he can build. He begins to iterate the steps and combinations. In business, a big idea is put before customers to learn, iterate and transform.

The Troupe

Dwight team (540x353)As with any business, dancers for the troupe are recruited with care. At first, a small team may be a pas de deux –just two working closely together, like a technical whiz with a business founder. With a larger troupe, the dancers make their imprint on the evolution of the piece. They have fun, like the work, suggest a twirl or jump, or a subtle shift in the placement of a toe which changes the pace or look of the piece, not unlike software developers at Apple tweaking features with input from the team.

Leadership

The choreographer must inspire the best work and effort from his team as he sets his vision and directs the execution. With a new piece, there is no video of the images in his head. No sheet of music or dance to clarify the way. The leader coaches, demonstrates, analogizes, whispers and smiles. Side by side, the dancers begin to flow together as the vision emerges.

Execution

Dance is more than continuous movement. The details are deliberated. Dwight corrects the dancer who is touching his hand on the top of the knee instead of the inside right. At first a female dancer lifts the chin of her male partner, and then it’s decided: no, let’s cup the face, which is more intimate. The team works hard at their craft, sweating the essence of every step.

Legacy

Most art is on a wall, sold to one owner, viewed in one spot for a lifetime. Dance is fleeting and in the moment. How can a legend such as Swan Lake be passed down for generations, performed by dance companies worldwide in essentially the same form?  Like ancient folklore, dance is passed down from person to person, ideally taught to others by someone who has once performed it on stage. The longevity of a dance is like the culture of a company. Some parts may be captured in writing or on film, but the soul of the dance, like the soul of a company, is transferred person to person, as the heart of the story is imbued on another.

Dwight ponders (540x361)A dancer can teach a startup the beauty of a concept, perseverance through failure, boldness in the glare of the spotlight, leadership in the unknown, the hard work of performance and endurance of a great idea. These lessons are “on pointe” for any business.

All photographs courtesy of Dwight Rhoden.

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Six Secrets to Safety When Going Out on a Limb

A few years ago when April Whitlock set out to raise money for her startup, I sat down to interview her on navigating new ventures. April and I worked together at LendingTree, where she was always forging the next trail.  Since “The Tree”, April started the Charlotte office of Mom Corps, building her business and seeing what she was capable of on her own, then moved to Carolina Pad, where she developed a new venture within the company. Today, April is leading the charge at Fundanoodle which she helped spin-off from Carolina Pad and took the leadership helm as a major owner.

So how has April kept her sanity, and her family in-tact and growing, while navigating these various startup ventures? April had some great advice on how to take the leap, manage the risks, and enjoy the journey when going out on a limb to pursue your dreams. xmas42 (540x362)

Here are some of her tips for a safe(r) journey:

  1. Let go your parent’s career mentality – The ideal of working your way up a career ladder is largely out the window. As you know, most people will have numerous jobs and careers in their lifetime. So why do you still yearn to “move up” or get surprise when you don’t continually hit home runs? There is no defined path for success. If you are learning, you are where you need to be. Value the skills you are developing, make the most of your experiences, and leverage these in your next endeavor.
  2. Have a plan – Set specific timeframes and milestones when you start a new experience. Plan the work, then work the plan. Give it your best shot. When you reach your target dates, be brutally honest about your progress, and willing to walk away with no regrets if the plan is not working. Create your safety net and use it.
  3. Take it 30 days at a time – Every company, every person has seasons. Forget the five year plan. Set short timeframes for accomplishments to create a sense of traction, or manage losses, and course correct quickly. A 30 day horizon is a much easier to sell to a board, boss or partner because the risk is low and it’s harder to say “no”.
  4. Small wins – Often visionary leaders want a “BHAG” – a big hairy audacious goal.  That can be inspiring, but may overwhelm the daily reality of building a new business. Keep a larger vision in mind while creating opportunity for small victories along the way.  Celebrate, show traction and keep motivated with a sense of momentum.
  5. Be transparent – If the magic doesn’t happen within your timeframe, be honest with yourself, your Board, your partner(s). You may need a slight shift in direction, a drastic change in strategy, or to shut down and move on. Staying objective and true to your original goals is critical to having the confidence to take a risk again.
  6. Get out and give back – The best insurance for your career is a strong network.  Good relationships provide a sounding board, reality check, connections to resources, and short cut to learning. The best time to make friends is before you need them, so look for ways to give to your network in ways large and small – a LinkedIn endorsement, a relevant article, a favored tweet or your best words of wisdom.

The first to benefit from all this advice will be April herself, as well as her new investors and employees.  Best of luck to April as she branches out with Fundanoodle.FundaNoodle

Carolina Pad, the national leader in fashion school and office supplies, has spent four years developing and testing the product line. Carolina Pad determined that Fundanoodle does not fit within its mass-market business model. April Whitlock has led all facets of the business for two years and will acquire the Fundanoodle assets from Carolina Pad at the end of the year.

Photograph courtesy of Gabriella Santander.

 

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