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Posts Tagged ‘Entrepreneurs’


Linchpins, Part II: Don’t Wait for Permission

April 25th, 2011 ::

These inspirational tales are plucked from a Seth Godin ebook, Insubordinate: Linchpins Everywhere You Look, Vol. 1 (the book jacket for Linchpin is to the left).  In case you are unfamiliar with Seth Godin and/or his term linchpins: Linchpins are the people who make a difference, who ship, who do, who disrupt—in a good way.  As Seth likes to say, “Go!  Make something happen.”

You can read my first post on three linchpins who turned business on its head here.  This post is about three people who didn’t wait for someone to tell them to do something—they just went out and did it.

Chip Conley

Chip runs the largest chain of independent hotels in California and is a successful author.  Seth met Chip in business school a few days after classes began.  Chip left Seth a handwritten note in Seth’s mailbox that said he heard Seth was an interesting guy, and would Seth be interested in joining his brainstorming group?

They met every Tuesday that year, along with three other people, to spend five hours brainstorming new business ideas. “If you had been in that situation, first week of business school, would you have taken the time and initiative to set up a group like this? For the five of us, it transformed our entire business school curriculum and experience. It was literally life changing. And it was easy to do.”

The takeaway: Initiative is a rare skill, and thus a valuable one. No one told Chip to do this. No one gave him authority or permission. He just did it.

Jacqueline Novogratz

Jacqueline Novogratz is a true visionary, someone who saw what was needed and set out to create it.

She founded Acumen Fund, “a groundbreaking nonprofit that invests in entrepreneurs in the developing world. These companies end up employing hundreds or thousands of people and make a profit by engaging the poorest people on earth in trade. ‘Trade, not aid’ creates a positive cycle, one that promises to cure deep-seated chasms of poverty.”

The takeaway: Like Chip, Jacqueline didn’t wait for permission; she just went out and did it.  It wasn’t guaranteed to work, but she took the risk, stuck with it and made it work.

Jay Levinson

If Jay’s name rings a bell, it’s because you know him as the author of Guerrilla Marketing, one of the most influential marketing books ever published.

Jay’s background is in advertising.  He knew how to write, he liked to write, so he took a few clients to pay the bills, and worked at becoming a writer.  Like Chip and Jacqueline, he didn’t wait for permission to do something, he just set out to do it.

After Guerrilla Marketing was published, it became a minor hit, so he worked to make it a major hit, and with Steve Lewers turned it into a series.

With a successful book under his belt, Jay was asked to speak and to co-author more books.  Jay isn’t a natural public speaker, but that didn’t stop him.  He decided to learn how to speak, and he got good at it.  He also created a platform that made it easy to find talented co-writers, so he could continue to write seminal business books.

The takeaway: Jay decided what his future would be, and he made it real.

Linchpins, Part I: Turn Business on Its Head

April 21st, 2011 ::

These inspirational tales are plucked from a Seth Godin ebook that I downloaded late last year, Insubordinate: Linchpins Everywhere You Look, Vol. 1 (the book cover for Linchpin is to the left–different book!).

If you’re not familiar with the term linchpins, Seth defines them as the people who make a difference, who ship, who do, who disrupt—in a good way.  Here are three of them:

David Seuss

Seth’s first boss was David Seuss at Spinnaker Software, the company that created the first generation of educational computer games.

David was a linchpin because he was driven by apparent risk, which, as Seth explains, is “when you launch stuff quickly, challenge the status quo, play with packaging or pricing or distribution, and do it with abandon.  It’s not actual risk, because in a fast-moving market, the risky thing to do is to play it safe.”

Because they didn’t play it safe, Spinnaker made a lot of mistakes, but they were also very successful and were constantly moving forward at a hundred miles an hour.  VCs and Harvard invested $10 million in Spinnaker Software.

The takeaway: As Seth asks, if you were a VC, would you have invested in David, who was always pushing to ship, or “a calm, polite, spreadsheet-following, numbers-cruncher?”

Steve Dennis

Seth’s first business partner was Steve.  They were unintentional business partners, because the tiny—and failing—college student-run business that hired them couldn’t decide if they liked Steve or Seth better, so they hired both.

Steve was not a risk-taker, but he knew “how to balance the facts and figures of reality with the upsides and options of dreams.” They ended up launching a new business every 10 days; at one point, they employed about 10 percent of the student body.

The takeaway: Don’t do what most people do, which is to use facts and numbers to create and amplify fear.  Turn it around and use facts to make dreams happen.

Lisa Gansky

How’s this for an impressive resume: Along with Tim O’Reilly and Dale Dougherty, Lisa Gansky co-developed the first commercial website (GNN), acquired one of the first search engines (Webcrawler), and then helped sell both to AOL back in that company’s heyday.

There’s more, but what is really impressive about Lisa, in Seth’s view, is that she so thoroughly “understands the power of connection and leadership and humanity.” During what was supposed to be a 30-minute meeting to discuss working together on a promotion, Seth and Lisa ended up spending four hours planning the first million-dollar promotion on the internet (this was in 1996 or 1997).  It was a huge success.

The takeaway: Instead of treating the meeting like one more sales call, Lisa used the meeting to produce something remarkable.

“What happens when you do that over and over again?” Seth asks.

“What will you do during your next sales call?”

Image Courtesy: Seth Godin

The Serial Entrepreneur: Benefits and Drawbacks of Changing Tracks

December 27th, 2010 ::

For some business owners, the thrill wears off after a business is established and going well. Once a new venture reaches that point, it’s tempting to hand it off to someone else and start a whole new project. That line of thought leads directly to the path of serial entrepreneurship.

The Benefits of Serial Entrepreneurship

For certain types of business owners, the enjoyment and fun of small business ownership isn’t necessarily the final product or business. Rather, it’s how you got there. It’s certainly not true of everyone, but for those people who feel that way, it’s far more fun to keep starting up new projects.

With that approach comes certain benefits. For one, if you do have the skillet necessary to be a good serial entrepreneur, you’ll probably have a business you can sell at the end of every new venture, making it much easier to fund the next project. You will likely also build up a network that supports new businesses very well, getting better connections for your efforts with each new business you start.

The Drawbacks of Serial Entrepreneurship

Creating one new business after another isn’t exactly a situation filled with sunshine and puppy dogs, however. A huge amount of work goes into creating a new business and you’ll constantly be in that stage of a business’ growth where you feel like you have to work every hour in the day to get it established. If your business isn’t your key priority, that approach may do more harm than good.

It’s not uncommon for a serial entrepreneur’s main focus in life to be building new projects, rather than family or other priorities. It’s a potential issue that is crucial to keep in mind.

The Balance of Serial Entrepreneurship

Like most paths, there are both benefits and drawbacks to becoming a serial entrepreneur. Even if you’re sure that you’ll enjoy the somewhat-hectic lifestyle that goes along with building multiple businesses, it’s important to dig deep and consider how it will impact other things you want to do. The drawbacks may not be enough to tip the scale against becoming a serial entrepreneur, but they do offer up considerations that you should look at before making a decision.

It’s also worth keeping in mind the fact that, though you’ve started one or two businesses, you don’t have to keep handing them over to someone and moving on. Perhaps you want to try out businesses until you find the right fit for the long haul. Or perhaps you find something that you aren’t looking for — a business worth holding on to for any number of reasons. No matter what else happens in an entrepreneur’s career, he has to be open to new opportunities and changing course. Find what works for you and go for it.

Image by Flickr user Rob (Creative Commons)

Make Your Business’s Downtime Pay Off

December 22nd, 2010 ::

By Rieva Lesonsky

Every business has downtime—that slow season when, for whatever reason, your company typically does less business than other times of the year. Maybe your key clients are closed for the holidays, you sell a seasonal product or service, or your company is just going through a lull.

Of course, if an unexpected downtime is a sign that your business is slumping, you need to take action. But downtime that recurs on a regular cycle occurence can actually be used to grow your business—if you take advantage of it. Here are some ideas for things you can do with your downtime:

Learn something. Get familiar with a business tool that will help you run your business more smoothly or market it better. That could be Quicken, Excel or a social networking site like Facebook. Depending on how much downtime you have, you could even sign up for a night or weekend class at a local community college or continuing education program. Most of them have plenty of courses that can help small business owners. There are also lots of online seminars and webinars; a quick search will uncover plenty.

 

Reconnect. Downtime is a great time to reconnect with business colleagues you’ve lost touch with, prospects you haven’t contacted for a while or potential business partners. Depending on how much time you have, you can touch base online, via email or with a friendly phone call. Got more time? Set up a lunch or breakfast meeting to see what’s new with the other person and how you can be of help to their business.

Network. Look into organized networking opportunities like trade associations, chambers of commerce or industry groups. Make time to do some type of in-person networking at least once a month. When you’ve got more time (during downtime), do more.

Cross things off your list. Handle those nagging business tasks on the to-do list that always get pushed aside. This could be scanning and digitally filing all your paper documents, looking for a new tax preparer or revamping your company’s website. Start with the smallest projects and you’ll gain a sense of satisfaction by crossing things off. Plus, you’ll create forward momentum that makes it easier to keep moving even when you start getting busy again.

The key to successfully using downtime is to plan ahead. Keep a list of things you can do when you hit downtime, and have your employees do so as well. Whether these tasks are longer-term projects or quick fixes, they’ll give you something to tackle when you’ve got time on your hands—and in the long run, they’ll boost your business success.

Image by Flickr user muffet (Creative Commons)

The New Business Plan

June 11th, 2010 ::

As I’ve mentioned in this space before, I did not write a business plan when I started my business.  One of my strengths is also one of my weaknesses: I am terribly impatient. I like to do; I do not hem, haw, and stall.  From my point of view, writing a traditional business plan is a total waste of time for small business people like me. I am a one-woman shop, registered as a sole proprietor, and happy to stay small for the time being.  Traditional business plans are for companies that need a lot of financing, are highly scalable, and entering a competitive—or soon to be competitive—marketplace.

(Before you start posting comments about the importance of having some kind of plan in place, keep reading.  I do agree that it is absolutely important to articulate your business goals, the competitive advantage of your product(s) or service(s), and your sales and marketing strategy.  I will even admit that I wish I had done two things when starting out: researched my competition so that I priced my services appropriately from the get-go, and really thought about which industries I’d prefer to work with and which projects I enjoyed writing and editing the most so that I could build up expertise faster in those areas.)

The always provocative Seth Godin recently wrote a great blog post on a modern business plan.  He argues that traditional business plans are boring and simply demonstrate the ability to do as expected.  His business plan would include only five sections: Truth, Assertions, Alternatives, People, and Money.   Based on his outline, I think his idea of what constitutes a good business plan would be much more useful for people starting and running small businesses.  Seth’s modern business plan really gets you thinking about how to be an entrepreneur and create something new and of great value, rather than just a small business owner who is doing something that’s already being done.

Truth: This part lays out the way your industry operates, for good and for bad, right now.  What needs are there, who are your competitors, how have they succeeded and failed?  Include short case studies or stories, spreadsheets, charts, graphs, whatever it takes to illustrate your point(s).

Assertions: As Seth describes it, this is the heart of all business plans, because this part describes what you’re going to do and how that is going to change things.

Alternatives: Because everything we hope to do doesn’t always work out, this section describes your back-up plans.

People:  No resumes here.  Write what characteristics you and your team possess to ensure things keep moving forward when things are going well and when things are not going well.

Money: This section is exactly what it sounds like.  It’s the part that puts me to sleep, but it is vitally important to know how much money you need to be viable and how you plan on spending it.

Are You an Entrepreneur, or a Small Business Owner?

April 7th, 2010 ::

Orange and gray gears

fpsurgeon/Flickr

Innovation is the wheel that keeps the business world turning.  Without it, we’d be living in energy inefficient homes, driving cars that run on leaded gasoline, and wearing parkas that don’t really block wind or keep us dry in a downpour.  Innovation is that little—and sometimes big—something that separates entrepreneurs from small business owners.

In this, the final of a three part series based on a conversation I had with CPA and small business consultant Jason Howell, I share with you Jason’s thoughts on entrepreneurship, which are in turn based on Peter Drucker’s writings and thoughts.    

For those of you who are only vaguely familiar with Peter Drucker’s name, he was a writer, management consultant, and self-described “social ecologist.” (He passed away in November 2005.)  I’ll let Wikipedia take over from here: “He…explored how humans are organized across the business, government, and the nonprofit sectors of society.  His writings have predicted many of the major developments of the late twentieth century, including privatization and decentralization; the rise of Japan to economic world power; the decisive importance of marketing, and the emergence of the information society with its necessity of lifelong learning.  In 1959, Drucker coined the term “knowledge worker” and later in his life considered knowledge work productivity to be the next frontier of management”.  (The hyperlinks were supplied by Wikipedia, too.)

Peter Drucker described an entrepreneur as someone who innovates.  He or she looks at a product or service in a different way and reinvents it to offer something new.  A small business owner, on the other hand, is simply someone who owns a business and replicates what others have done. 

As Jason pointed out, entrepreneurs make a difference in the community, the country, the industry, and/or the world.  There was already light, but Thomas Edison transformed our concept and use of light when he invented the light bulb.  There was already a process in place to build a car, but Henry Ford took it to a whole new level when he invented the assembly line.  Everyone who gets into business does so to make a difference on some level. Maybe that difference is not as life-changing as inventing, say, the microchip, but one that makes a difference nonetheless.

“If someone laughs at your idea, it’s probably a new one.”  Jason couldn’t remember who said it, but I think it’s a great quote.  Even though there’s a fear of innovation and the change it will bring, innovation attracts people.  Think about big, innovative companies who have truly changed the way we live or do things.  Microsoft, Google, and Apple immediately spring to mind, probably because I use their products/services on a daily basis.

But there are lots of smaller companies out there that have changed how things are traditionally done in their industry too.  Check out Wexley School for Girls, which is not a school, is not for girls, and was not founded by someone named Wexley.  It’s a very different kind of ad agency based in Seattle, WA that has one of the funniest, coolest, hippest, wow-est, and most irreverent websites I have ever visited.  I don’t even know them, but I love them.

If you’re company does things differently, find those first adopters, those people who will appreciate and embrace your different-ness, who will love your new product or service.   You never know how being innovative could change your life—or the world.

A Unique Proposition – Messages that chase buyers away

February 9th, 2010 ::

First let me kill something. Unique cannot be modified. Something is or is not unique – there is no such thing as more unique.

Anthropologists and Behavior Scientists know something. They know that only a very small part of the population likes something that is unique. The question is “Why”? Because we are a) creatures of habit and b) we learn by attaching new experiences to something we already understand. On any adoption curve the best customers are majority buyers. The myth of early adopters is a myth unless you are selling a pure tech play in which case your chances of courting the early majority hitch on building a product that the masses can comprehend and put to use solving a problem with little or no difficulty (see b), yet it appeals to the tech crowd. Now that we have a framework lets move on to messages.

What makes a message work – It connects to something the buyer understands and includes a call to action that can be acted on when read. Let’s say two very capable people open bike shops. Both of these people have solid business skills, understand their product and know how to handle customers. Let’s see which one gets your business…

You are walking down a street on a sunny afternoon. You are not on your cell phone and there are no distractions. Life is good and you are contemplating the purchase of a new bike. A moment later two vans drive by only a few seconds apart. Each has a name a logo and a tag line. The first van is from Marathon Cycle Store – Get out and ride 1-800-pedal now. The side of the van shows a couple riding mountain bikes. The second van is from Wheelmen – We Give You Wings 717-215-2572. The side of the second van has a logo that looks like it might be a modern stick figure on something the resembles a bike.

If you are like most of the buying public, you were drawn to the first van because it connected to something you already knew and didn’t make you think. The message was right there. For all the creative energy companies put into names, tag lines and logos, the mistake they make most often is go for the curious concept first (Curiosity is a tool of creation, desire and need are the tools of a sale). They strive to be unique in everything they do. Good for them. Are they unique to the point that a prospect ignores them – most likely. The problem is two fold – creative agencies don’t think like consumers or talk to prospects like sales people do. Companies often spend so much time concerned about a unique image that they forget why the prospect wants to buy in the first place.

Connect your name, tag line, logo, product name or pitch to your prospect’s burning desire and you will do better than your competitor. Why? Because while you are introducing the prospect to a great shopping experience, your competitor is still trying to explain what it is his company does.

To the point – At 360 Sales Focus we have an entire integrated sales and marketing company at your disposal. How can we help you generate more business? Let’s talk about making something happen for your company.

Out there raising captial? See how Mint CEO did it from seed round to acquisition

November 2nd, 2009 ::

Are you out there raising money? Have you raised money for your business in past? Well, it is hard to find good advice on how it is really done and even harder to get the details on how someone else did successfully and then sold the company.

This is why when I came across this post on TechCrunch about Mint CEO Aaron Patzer’s 45 minute presentation on building startups from the ground up I had to share. In the video below, Aaron shows how he raised and spent money, and generated revenue, throughout the lifecycle of Mint, from the very beginning to the $170 million acquisition. Michael Arrington points out that “if you are an aspiring startup entrepreneur, you’ll want to watch that more than a few times. The candid disclosures and advice he gives is rarely seen in Silicon Valley”. He is so right that I can’t even begin to tell you. The video is below and the presentation is farther down the post.

Mint CEO Aaron Patzer on Startups from Techcrunch on Vimeo.

In the presentation below Aaron shows historical slides from early presentations to investors and compares those to the actual results. Here is the presentation and it is truly revealing and from personal experience VERY accurate. This is an approach and model that every startup should study closely. Not only because they have a good model but because they built this and sold it which many are never able to accomplish.


Startup Building 101

Rules for Entrepreneurs #2: Pay Yourself First

June 9th, 2009 ::

This article was originally posted on Solutions Are Power, but the series is now residing on Grow Smart Business.

I originally wrote this on VentureFiles which is now part of the Technosailor Galaxy of Blogs but as Aaron Brazell, Editor and fearless leader of Technosailor.com said, this post is more relevant than ever when you are trying to keep your business running and growing (even in this economy). I originally wrote the post about a year ago so below is the original post and after that is an update that tries to do a little reflection on doing this during the current state of the economy.

Original Post:

Over the last 9 years and two startups I have learned many things and screwed up royally in some cases. This series is about providing you best practices of lessons learned and avoiding the mistakes I have already made.

In the past, I have had good years and bad years. When you have employees, they expect to be paid and when you mess with payroll (and payroll taxes, but that is a post for another time) you create such a negative culture that nothing will get done.

With that said, when you are starting your business regardless if it is a service or product company, you will have startup costs and probably forgo paying yourself for 6-12 months to keep growing the business. That is fine and to be expected. What you should not do (and what I did) is keep adding staff and sacrifice your own salary in the name of growth. If you keep going like that and have a bad quarter you will have nothing saved for a rainy day and if the business fails you will probably be in immense debt and get nothing out of the business.

Granted, the balance between growth and cash flow is a tenuous one but it is one thing you should never defer to someone else in beginning. Plus, there is a difference between creating a lifestyle business and an enterprise. A lifestyle business is really making enough money for yourself and having some contractors or 1-2 people that gives you a good salary but is more about freedom. An enterprise is a business that scales and gets big over time but you will be working intense amounts in the beginning but will need to hire those smarter than you with the intention that you are looking for an exit and will have time for freedom when you cash out.

So when you are growing the business you should work the first 6-12 months paying off the initial capital expenses and getting about 6 months of cash flow for yourself before you hire anyone else. Once you have that done, start paying yourself something, even if it is small and will ramp up over six months, pay yourself first. This will get you in the habit of being committed to making the business pay for itself and you so you are not worrying about living month to month and lets you find some resources to help you deliver while you continue to sell and grow the business.

Once you are looking at hiring someone use these two rules as a starting basis:

- Have six months of payroll for that person in the bank on top of your salary

- Have 90 days of projects or sales committed for that person to deliver so they not only have something to do but are earning their keep.

You may have to be conservative at first in your growth but in the end you will scale better and create a business that is focused on delivery and customer service without putting you and your employees on a cash flow roller coaster.

Update, One Year Later:

When I read that post I reflect on the mistakes of past and having had a business through the dot com bust and subsequent recession. Granted, it was not as deep or as long as this one, but the word that comes to mind is, balance. And while it holds true that you need to pay yourself first before you keep growing, the original post was written with the tone of growth and not reduction which may be more likely these days.

When you are growing you are tempted to throw caution to the wind and sacrifice your pay in order to hire that extra person that keeps the idea factory turning out wonderful widgets. When times are good and the sales are going upward, your risk threshold increases. When times are tight, you might feel like you are holding on with your fingertips to a 5,000 overhang below you and no way to see up over the ledge. In these cases, it is natural for people have a tendency to pull WAY back into their shells and not hire when they know they need to or lay people off in order to stay cash positive. In this case, you might sacrifice your entire salary to keep people on board. While this might sound noble, I have done this and it usually ends badly.

This is where the word “balance” comes in.

You can only go so far to reduce staff and pile tasks up on people that are probably already overworked, but cutting down too much can keep you from potentially delivering to clients in the end making things worse. Look to reduce costs in other ways, like office services you may not critically need, or ask if people would volunteer (including you) to take a 5% pay cut so we can keep everyone and deliver at the level of quality clients have come to expect so we can keep our clients happy and ride out this recession together.